Chipotle Mexican Grill has signed its first ever franchise agreement with Kuwait-based Alshaya Group to open locations in the Middle East.
The Mexican-inspired concept currently owns and operates all of its stores, comprising 15 in the UK and more than 3,200 in the US, alongside other international markets.
The Alshaya agreement marks the first time Chipotle has enlisted a local franchise retail operator, with plans to initally open two locations each in Dubai and Kuwait.
Alshaya works with other brands including Starbucks and Shake Shack.
Speaking to CNBC, Chipotle CEO Brian Niccol said the brand had ruled out franchising in the US, adding: “As we look around the world, we’ll be evaluating all the elements of what makes Chipotle great and if there’s an area where we believe we need a partner, then we’ll consider a partner for it.
“Our return on invested capital in the U.S. is industry-leading. We’ve got the balance sheet and capital available where we can handle the growth with our own capital capability, and I think we’ve demonstrated the ability to operate restaurants effectively.”
In August 2022, chief development officer Tabassum Zalotrawala told MCA Chipotle is unlikely to begin franchising on a large scale, saying: “We don’t rely on franchisees and partners. We’ve got a pretty healthy balance sheet. And we’re bullish about the investments we’ve made in people, infrastructure, and particularly operations.”
