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What changed in Chipotle Mexican Grill's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Chipotle Mexican Grill's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+234 added−255 removedSource: 10-K (2026-02-04) vs 10-K (2025-02-05)

Top changes in Chipotle Mexican Grill's 2025 10-K

234 paragraphs added · 255 removed · 184 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThere were no union petitions or campaigns in 2024, and we continue to bargain in good faith with the one restaurant that voted in 2022 to form a union. We also continue to focus on building a positive people culture where employees feel supported, heard, and are able to grow with Chipotle.
Biggest changeIn 2025, nearly all newly promoted General Managers completed training focused on fostering a positive people culture where employees feel supported, heard, and able to grow with Chipotle. There were no union petitions or campaigns in 2025, and we continue to bargain in good faith with the one restaurant that voted in 2022 to form a union.
See “Risk Factors” in Item 1A for discussion of risks relating to federal, state, local and international laws and regulations applicable to our business. Seasonality Seasonal factors influencing our business are described under the heading “Quarterly Financial Data/Seasonality” in Item 7.
See “Risk Factors” in Item 1A for a discussion of risks relating to federal, state, local and international laws and regulations applicable to our business. Seasonality Seasonal factors influencing our business are described under the heading “Quarterly Financial Data/Seasonality” in Item 7.
Our food safety programs are also intended to ensure we not only continue to comply with applicable food safety regulations, but also establish Chipotle as an industry leader in food safety. To help achieve this goal, we have a Food Safety Advisory Council comprised of some of the nation’s foremost food safety authorities.
Our food safety programs are also intended to ensure we not only continue to comply with applicable food safety regulations, but also establish Chipotle as an industry leader in food safety. To help achieve this goal, we have a Food Safety Advisory Council comprised of some of the nation’s foremost food safety authorities who are independent of Chipotle.
In addition, we closely monitor industry news, trade tariffs, weather, exchange rates, foreign demand, geopolitical crises and other world events that may affect our ingredient prices or available supply. Certain key ingredients are purchased from a small number of suppliers. Quality Assurance and Food Safety We are committed to serving only safe, high-quality food.
In addition, we closely monitor industry news, trade tariffs, weather, exchange rates, foreign demand, geopolitical crises and other world events that may affect our ingredient prices or available supply. Certain key ingredients are purchased from a small number of suppliers. 4 Table of Contents Quality Assurance and Food Safety We are committed to serving only safe, high-quality food.
We work with 26 independently owned and operated regional distribution centers that purchase from various suppliers we carefully select based on the suppliers' understanding of and adherence to our mission and Food with Integrity standards, quality and price availability.
We work with multiple independently owned and operated regional distribution centers that purchase from various suppliers we carefully select based on the suppliers' understanding of and adherence to our mission and Food with Integrity standards, quality and price availability.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 8 Table of Contents Competition The fast-casual, quick-service, and casual dining segments of the restaurant industry are highly competitive with respect to, among other things, taste, price, food quality and presentation, service, location, convenience, brand reputation, and cleanliness and ambience of each restaurant.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Competition The fast-casual, quick-service, and casual dining segments of the restaurant industry are highly competitive with respect to, among other things, taste, price, food quality and presentation, customer service, location, convenience, brand reputation, and cleanliness and ambience of each restaurant.
The references to the URLs for these websites are intended to be inactive textual references only. 9 Table of Contents
The references to the URLs for these websites are intended to be inactive textual references only. 8 Table of Contents
Human Capital At Chipotle, our vision is to cultivate an environment where our employees can thrive and grow into great leaders. We believe in investing and supporting our people because they are our most important asset. As of December 31, 2024, Chipotle employed 130,504 people worldwide and 1,328 contract workers.
Human Capital At Chipotle, our vision is to cultivate an environment where our employees can thrive and grow into great leaders. We believe in investing and supporting our people because they are our most important asset. As of December 31, 2025, Chipotle employed 130,301 people worldwide and 1,233 contract workers.
Other areas of Total Rewards that help support our employees include: • We have made substantial investments in our compensation packages, including competitive wages and industry leading incentive programs, such as our annual and quarterly bonus programs. • We offer a Debt-Free Degree program that provides Chipotle employees' access to nearly 100 degrees at 10 universities, completely tuition free. • We support Career Certificates, which further enhances our Tuition Assistance benefits by providing on-demand certificate programs to help Chipotle team members advance their careers in as little as eight weeks. • We offer a student loan payment matching programs via our 401(k) retirement program.
Other areas of Total Rewards that help support our employees include: • We offer competitive wages and industry leading incentive programs, such as our annual and quarterly bonus programs. • We offer a Debt-Free Degree program that provides Chipotle employees' access to nearly 100 degrees at over 20 universities and accredited institutions, completely tuition free. • We support Career Certificates, which further enhances our Tuition Assistance benefits by providing on-demand certificate programs to help Chipotle team members advance their careers in as little as eight weeks. • We offer student loan payment matching programs via our 401(k) retirement program.
Digital sales represent food and beverage revenue for company-owned restaurants generated through the Chipotle website, Chipotle app or third-party delivery aggregators and include revenue deferrals associated with Chipotle Rewards. Digital sales represented 35.1% of food and beverage revenue in 2024, compared to 37.4% in 2023.
Digital sales represent food and beverage revenue for company-owned restaurants generated through the Chipotle website, Chipotle app or third-party delivery aggregators and include revenue deferrals associated with Chipotle Rewards. Digital sales represented 36.7% of food and beverage revenue in 2025, compared to 35.1% in 2024.
Our food safety and quality assurance teams work to ensure compliance with our food safety programs and practices, components of which include: • naturally derived inhibitors to prevent microbial growth in ingredients; • advanced technologies and tools that reduce or eliminate pathogens while maintaining food quality; • enhanced restaurant procedures and protocols for handling ingredients and sanitizing surfaces in our restaurants; • food safety certifications; • internal and third-party restaurant inspections; • small grower support during on-site audits; • supplier interventions steps to mitigate food safety risks before ingredients reach Chipotle; and • ingredient traceability. 4 Table of Contents These and other food safety practices underscore our commitment to be a leader in food safety while continuing to serve high-quality food that our guests love.
Our food safety and quality assurance teams work to ensure compliance with our food safety programs and practices, components of which include: • naturally derived inhibitors to prevent microbial growth in ingredients; • advanced technologies and tools that reduce or eliminate pathogens while maintaining food quality; • enhanced restaurant procedures and protocols for handling ingredients and sanitizing surfaces in our restaurants; • food safety certifications; • internal and third-party restaurant inspections; • small grower support during on-site audits; • supplier intervention steps to mitigate food safety risks before ingredients reach Chipotle restaurants; and • ingredient traceability.
Talent Acquisition We remain committed to the growth, development, and advancement of our people. In 2024, over 85% of our in-restaurant leadership roles were filled through internal promotions, which remains a critical component to our staffing strategy.
Talent Acquisition We are committed to the growth, development, and advancement of our people. In 2025, nearly 90% of our in-restaurant leadership roles were filled through internal promotions, which remains a critical component of our staffing strategy.
In addition, we have a team approach where our training, operations, culinary, legal and restaurant food safety and quality assurance departments develop and implement operating standards for food quality, food preparation, restaurant cleanliness, employee health protocols, and safety in the restaurants.
We maintain a limited list of approved suppliers, many of whom are among the top suppliers in the industry. In addition, we have a team approach where our training, operations, culinary, legal and restaurant food safety and quality assurance departments develop and implement operating standards for food quality, food preparation, restaurant cleanliness, employee health protocols, and safety in the restaurants.
We believe we have compelling compensation packages and incentive programs, and a robust suite of benefit offerings that enable us to engage current team members and attract new team members.
We believe we have compelling compensation packages and incentive programs and a robust suite of benefit offerings that enable us to engage current team members and attract new team members. In 2025, we expanded access to mental health resources and added weight management support programs.
Of our employees, 127,820 worked in the United States, and 2,684 worked internationally across Canada, France, Germany, and the United Kingdom. Within the U.S., 126,233 employees worked in our restaurants, and 1,587 in our Restaurant Support Centers and Field Leadership.
Of our employees, 127,116 worked in the United States, and 3,185 worked internationally across Canada, France, Germany, and the United Kingdom. Within the U.S., 125,408 employees worked in our restaurants, and 1,708 in our Restaurant Support Centers and Field Leadership.
This, in addition to a credit optimization service, has helped to bolster our employees' financial well-being. • We also offer personalized mental health assistance to all Chipotle employees and their family members with support available 24/7 via in-person, phone, or virtual visits with a licensed counselor. • Starting in 2025, we are expanding our mental health benefits by offering free access to a mental health app to all U.S. employees.
This, in addition to a credit optimization service, has helped to bolster our employees' financial well-being. • We also offer personalized mental health assistance to all Chipotle employees and their family members with support available 24/7 via in-person, phone, or virtual visits with a licensed counselor. • We started new partnerships focused on helping our employees with sleep, meditation, mental fortitude, and cardiometabolic health.
In Chipotle-owned and operated restaurants, we strive to serve only animal products that are raised in accordance with criteria we have established in an effort to improve sustainability and promote animal welfare, and without the use of non-therapeutic antibiotics or added growth hormones.
Food with Integrity Serving high-quality food at reasonable prices is critical to ensuring guests enjoy wholesome food at a great value. In Chipotle-owned restaurants, we strive to serve only animal products that are raised in accordance with criteria we have established to improve sustainability and promote animal welfare, and without the use of non-therapeutic antibiotics or added growth hormones.
This gives us the opportunity to learn and share our knowledge and expertise with other food safety professionals and regulatory agencies. Digital Business and Innovation Our digital platform continues to be a strategic driver of our growth.
In addition, our food safety and quality assurance team members hold board seats and participate in technical working groups with several associations, which gives us the opportunity to learn and share our knowledge and expertise with other food safety professionals and regulatory agencies. Digital Business and Innovation Our digital platform continues to be a strategic driver of our growth.
The Food Safety Advisory Council is charged with evaluating our programs and advising us on ways to maintain and elevate our food safety program. Our food safety and quality assurance team members hold board seats and participate in technical working groups with several associations.
The Food Safety Advisory Council is charged with evaluating our programs and advising us on ways to maintain and elevate our food safety program.
We are eager to improve our employee engagement efforts and build even stronger feedback mechanisms to ensure our employees feel valued, heard and respected. Government Regulation and Environmental Matters We are subject to various federal, state and local laws and regulations that govern aspects of our business operations.
Government Regulation and Environmental Matters We are subject to various federal, state and local laws and regulations that govern aspects of our business operations.
Our food safety and quality assurance teams establish and monitor our quality and food safety programs and work closely with suppliers to ensure our high standards are met throughout the supply chain. We maintain a limited list of approved suppliers, many of whom are among the top suppliers in the industry.
These and other food safety practices underscore our commitment to being a leader in food safety while continuing to serve high-quality food that our guests love. Our food safety and quality assurance teams establish and monitor our quality and food safety programs and work closely with suppliers to ensure our high standards are met throughout the supply chain.
Our Intellectual Property and Trademarks “Chipotle,” “Chipotle Mexican Grill,” “Food with Integrity,” “Responsibly Raised,” “Chipotle Rewards,” and a number of other marks and related designs and logos are U.S. registered trademarks of Chipotle. We have filed trademark applications for a number of additional marks in the U.S. as well.
Among our main competitors are restaurant formats that claim to serve higher quality ingredients without artificial flavors, colors and preservatives, and that serve food quickly and at a reasonable price. 7 Table of Contents Our Intellectual Property and Trademarks “Chipotle,” “Chipotle Mexican Grill,” “Food with Integrity,” “Responsibly Raised,” “Chipotle Rewards,” and a number of other marks and related designs and logos are U.S. registered trademarks of Chipotle.
As of December 31, 2024, we owned and operated 3,644 Chipotle restaurants throughout the United States (“U.S.”) and 82 international Chipotle restaurants. Additionally, we had three international licensed restaurants. We manage our U.S. operations based on ten regions and aggregate our operations to one reportable segment.
As of December 31, 2025, we owned 3,938 Chipotle restaurants throughout the United States (“U.S.”) and 104 international Chipotle restaurants. Additionally, we had 14 international partner-operated restaurants. Partner-operated restaurants represent Chipotle restaurants over which Chipotle does not have a controlling financial interest and for which Chipotle does not directly manage day-to-day operations.
Many of our competitors also offer dine-in, carry-out, online, catering, and delivery services. Among our main competitors are restaurant formats that claim to serve higher quality ingredients without artificial flavors, colors and preservatives, and that serve food quickly and at a reasonable price.
Many of our competitors also offer dine-in, carry-out, online, catering, and delivery services.
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Our revenue is derived from sales by our restaurants. 3 Table of Contents Business Strategy We are a brand with a demonstrated purpose of Cultivating a Better World.
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This includes restaurants operated by third parties pursuant to license or franchise agreements and restaurants in which Chipotle holds a minority, non-controlling ownership interest. We manage our U.S. operations based on 11 regions and aggregate our operations to one reportable segment. Our revenue is derived from sales by our restaurants.
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Our mission is to win today while we grow our future by focusing on five key fundamental strategies: • Running successful restaurants with a people accountable culture that provides great Food with Integrity while delivering exceptional in-restaurant and digital experiences; • Amplifying technology and innovation to drive growth and productivity at our restaurants, support centers and in our supply chain; • Making the brand visible, relevant, and loved to acquire new guests and improve overall guest engagement; • Sustaining world class people leadership by developing and retaining top talent at every level; and • Expanding access and convenience by accelerating new restaurant openings in North America and internationally.
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Business Strategy Chipotle is a brand with a demonstrated purpose of Cultivating a Better World. Our Recipe for Growth strategy leans into what uniquely differentiates Chipotle, with a focus on accelerating growth and sharpening competitiveness.
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Food with Integrity Serving high-quality food at reasonable prices is critical to ensuring guests enjoy wholesome food at a great value.
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The strategy is grounded in five key areas: • Protect and strengthen the core by driving operational and culinary excellence to deliver exceptional value for our guests; • Evolve the brand messaging and accelerate menu innovation and new occasions that drive demand into our restaurants; • Modernize our business model with industry-leading technology, including leveraging AI and relaunching our Rewards Program, to elevate the experience for our guests and teams; • Expand our global reach by scaling with intention through proven, company-owned and partner operated markets, as well as strategic new regions; and • Cultivate the best talent in the industry that is energized and focused on speed and agility.
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To continually attract and hire external talent, we remain focused on creating a best-in-class job seeker and General Manager hiring experience that prioritizes speed, but that also aims to create a transparent process; an experience that identifies shift-specific needs and elevates our talent bar for quality-of-hire.
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When hiring external talent, our focus is on building a scalable talent engine that powers growth and advances our vision to Cultivate a Better World. With Ava Cado, a virtual scheduling assistant, candidates can apply, complete applications, and schedule interviews in a few minutes.
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We have seen early success with our new virtual hiring assistant "Ava Cado", almost doubling our application flow. With Ava Cado, approximately 90% of applications are completed, and restaurants are leveraging automated interview rescheduling, freeing up managers to run great restaurants and serve our guests.
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This tool is intended to broaden access and streamline hiring, enabling managers to focus on operations and our guest experience. 5 Table of Contents We continue to provide targeted staffing support for new restaurant openings and restaurants with elevated staffing needs by deploying new marketing efforts to targeted audiences telling relevant stories.
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To expand our recruitment marketing efforts we continue developing both new and existing partnerships, such as Transition Overwatch and Recruit Military, which assist transitioning Veterans and their spouses.
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We are focused on quality of hire by reviewing our labor and shift models, enhancing Ava Cado and training General Managers on best-in-class hiring practices. By providing engaging workplaces, inclusive hiring practices, competitive pay and incentives, and comprehensive benefits, we position ourselves as an employer of choice.
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We also prioritize understanding the hiring needs of our international operations in Canada, the United Kingdom, France, and Germany. 5 Table of Contents Culture and Inclusivity ("C&I") Our purpose extends beyond serving nutritious food using real ingredients.
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Culture and Inclusivity ("C&I") In 2025, we broadened our C&I function with programs rooted in continuous listening, accountability, and engagement. The employee lifecycle at Chipotle represents every stage of an employee's journey, from attracting and hiring great people, to developing their skills, growing their careers, and celebrating their contributions – all in an inclusive environment.
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We are on a journey to create a global culture where everyone is welcome and feels a genuine sense of belonging, and we believe this is achieved through our daily interactions and commitment to model inclusive leadership. In 2024, Chipotle continued to invest in employee development and training.
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Our focus areas include: • Deepening empathy and field consideration by designing people practices that balance operational excellence with the employee experience, reflect the realities of restaurant teams, elevate field voices, and ensure leaders act with understanding, fairness, and care. • Delivering cultural experiences and expanded programs that promote inclusive competencies and leader accountability for sustainable progress. • Developing a consistent strategy for inclusive storytelling that promotes our values, celebrates our employees, engages our fans and increases employee generated content. • Creating and socializing a consistent, company-wide approach to celebrating and appreciating employees to reinforce values, behaviors, and our culture.
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Our learning programs include inclusive topics and skill-building to provide our leaders with the resources they need to succeed in their current roles and prepare for the future. Our training programs will continue to evolve to respond to a constantly changing world.
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Talent Management We are dedicated to building a high-performing organization through a comprehensive talent strategy focused on attracting, developing, and retaining top talent across all levels. In 2025, more than 23,000 employees earned promotions. Notably, internal advancement within our Field Leadership positions—including Field Leaders, Team Directors and Regional Vice Presidents—was above 82%.
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Devotion to our culture of inclusivity emanates from our values and the belief that our people make us what we are. We do not see inclusion as a moment, but a movement towards a future where all people can experience success as their best authentic selves.
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Our strong recruitment, onboarding, and training programs are designed to position new hires and recently promoted team members for success while reinforcing alignment with Chipotle’s mission and values. We continue to offer a range of targeted initiatives that strengthen leadership capabilities where they are most critical by: • Strengthening role readiness by introducing additional rigor into role preparation processes.
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That is why our efforts are not confined to certain roles, departments, identities, or geographies. Driven by a strategy spanning across culture, community, candidate, career, and commerce, we are making meaningful strides towards a future where diversity is understood, embraced, and is a source of our strength.
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This includes implementing e-learning modules for restaurant leadership, enhancing training content for our Certified Training Managers, elevating our cohort-based Field Leader in Training program, and enriching the Field Leader experience through upgraded content in our flagship program, Cultivate U. • Enhancing our onboarding experience through a redesigned new hire orientation for Restaurant Support Center employees and the introduction of a dedicated orientation program for Field Leaders.
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Maintaining a work environment where all people can succeed as their full authentic self is critical to our success as a business. To deliver meaningful programs that meet the needs of our employees, it is important we understand the dynamic composition of our workforce.
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Additionally, we have a People Leader Fundamentals program that ensures Restaurant Support Center leaders are well-versed in core People Processes, reinforcing consistency and effectiveness in leadership practices across the organization. • Supporting leadership growth through topic-rich Learning Labs intended for Field Leaders and above, and Restaurant Support Center team members.
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As of December 31, 2024, 48.9% of our workforce was male and 49.8% of our workforce was female.
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These 60-minute live sessions focus on developing leadership skills and knowledge essential for personal and professional advancement. • Leveraging our People Technology platforms by adding succession planning capabilities in Workday, including a dedicated process for Field Leader and above. These updates provide greater visibility into talent pipelines across regions and sub-regions.
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Our most recent Equal Employment Opportunity consolidated report is posted on the Investors page of our website at www.ir.chipotle.com under Corporate Governance – Human Capital Information and additional details about the demographics of our employee population is included in our biennial Sustainability Report and interim Update Report on our website www.chipotle.com/sustainability . 6 Table of Contents We have undertaken a range of activity to promote a culture of inclusion: • We continue to drive a consistent and structured candidate interview process with interview guides.
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Individual Development Plans and the 360 Feedback tool, which allows us to gather well-rounded feedback about leaders, are now fully integrated and live within Workday, supporting career development and performance feedback.
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This ensures top candidates are identified through equitable hiring practices in both internal and external candidate interviews.
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Collectively, these initiatives strengthen leadership capability, improve employee engagement, and position the organization for sustained operational excellence and long-term growth. 6 Table of Contents Total Rewards The financial, physical, and mental well-being of our employees remains a top priority.
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We also launched an internal job board across multiple communication channels to provide increased visibility and access to internal opportunities. • In 2024, Chipotle hired a Director of C&I to create and execute a strategy for inclusion, advise across Centers of Excellence, and enhance existing programs with C&I training.
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Employee Listening In 2025, we relaunched employee sentiment surveys to learn more about what we are doing well and where we have opportunities. Soliciting feedback using a confidential process helps us continue to foster an inclusive culture where everyone feels valued, heard, and respected.
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This specialized role is also responsible for the continued maturation of our Employee Resource Groups through a new strategy that improves the leader and member experience. • We have a holistic approach to pay equity to ensure consistent and equitable compensation among our employees.
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Our partnership with Perceptyx, an employee engagement platform, helps Chipotle unify insights and collect themes across locations, ensuring employee voices are heard, and that our culture efforts are supported. This year, we saw 84% participation from Restaurant Support Center employees and 74% participation from our field employees.
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We retain an independent third-party compensation consultant each year to conduct a pay equity analysis of our U.S. and Canadian workforce, including factors of pay (e.g., grade level, tenure in role, most recent promotion) and external market conditions (e.g., geographic location), to ensure equitable treatment among our employees.
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Of participants, 91% of Restaurant Support Center employees and 86% of field employees reported feeling engaged. We value employee feedback and are committed to translating it into real, visible improvements across our restaurants and Restaurant Support Centers. Following our engagement surveys, we launched organization-wide action plans to help our leaders convert survey results into change.
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In 2024, our review included 99% of our U.S. and Canadian employee population, excluding only approximately 50 of our most senior management employees. The analysis identified small, isolated pay gaps for certain segments of the population, and we subsequently made pay adjustments to close those gaps.
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We have filed trademark applications for a number of additional marks in the U.S. as well.
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Since there are not many common roles among our 50 most senior executives, we consider both internal equity by level, as well as individualized market data, to help ensure we maintain pay equity among this group.
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Talent Management We are committed to cultivating a high-performing workforce through a talent development strategy that prioritizes attracting, developing, and retaining exceptional talent at every level of the organization. In 2024, we promoted over 23,000 employees.
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Importantly, amongst our Field Leadership roles (Field Leaders, Team Directors, Regional Directors of Operations, and Regional Vice Presidents), the internal promotion rate was above 80%. Our robust hiring, onboarding, and training programs ensure our newly hired and recently promoted employees are set up for success and are aligned with Chipotle's values and goals.
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We deployed a variety of critical programming ensuring leadership development where most needed. Some notable highlights include: • Cultivate University is our leadership training program for new Field Leaders and Team Directors navigating multi-unit management for the first time.
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Leaders are brought together for a four-day immersive leadership experience designed to bolster leadership skills, while validating and grounding attendees in the operational skills necessary to succeed. In 2024, we had 129 leaders complete the program. • We introduced additional required restaurant leader training at all levels in 2024, building skills around accountability, coaching, feedback, delegation, and resolving conflict.
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The courses are designed to align with the leadership skills necessary to excel at each level of restaurant management. • We formalized our Field Leader in Training materials and have seen cohorts launch throughout the business, ensuring that Managers interested in promotion are getting the development they need to take on the next role. • Leadership Evolution and Development, our leadership development program, is designed to prepare a cross-functional cohort of mid-level managers for the future of work and leadership.
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During the 6-month program, participants focus on the capabilities of leading oneself, others, and the business with topics designed to stretch capabilities and improve decision-making skills. In addition, to ensure leadership continuity, we maintain a robust succession planning process, focusing on critical roles across the company.
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In 2024, we identified successors for 72% of key positions and continued to develop individualized development plans tailored to prepare successors for readiness.
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Due to Chipotle's growth, we are excited about two newly created regions and three promotions into Regional Director of Operations and Regional Vice President roles, highlighting additional growth and development for our field teams. 7 Table of Contents Total Rewards The financial, physical, and mental well being of our employees remains our top priority.
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In 2024, we conducted an Employee Value Proposition survey which was intended to help us understand what employees appreciate in Chipotle as an employer, what needs improvement and what drives value for our employees. We have gathered valuable insights that will help us continue to improve the employee experience and attract and retain the best talent in the industry.
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Employee Listening We value feedback; both positive sentiments and constructive comments help us improve our organization and culture. Many of our best ideas come from Chipotle employees and we use various communication channels to maintain awareness and responsiveness to questions, concerns, and ideas across our workforce.
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This includes direct daily engagement through meetings with General Managers, lunch and learns, and other one-on-one interactions. Employees are encouraged to ask questions, voice concerns directly or anonymously report potential violations of Chipotle's Code of Ethics through our Respectful Workplace hotline. Employees also can raise concerns using other mechanisms, including communication with their managers or human resources business partners.
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We actively encourage our employees to report any issues or concerns without fear of reprisal, intimidation, or harassment. We also respond to employee issues quickly via our Employee Service Center which is available seven days a week to resolve employee questions about things like restaurant health and safety, compliance, benefits, payroll, etc.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we fail or are perceived to have failed to comply with applicable privacy and data protection laws, or fail to properly respond to or honor consumer requests under any of the foregoing privacy laws, we could be subject to enforcement actions and regulatory investigations, or claims for damages by guests and other affected individuals or parties, or incur fines and damage to our brand reputation, any of which could have a material adverse effect on our operations, financial performance, and business.
Biggest changeComplying with these laws and regulations is costly and can delay or impede the development of new services or the continued use of existing services or data. 13 Table of Contents If we fail or are perceived to have failed to comply with applicable privacy, consumer protection, and data protection laws, or to properly respond to or honor individual requests under such laws, we may face enforcement actions, regulatory investigations, and oversight, consent orders limiting our ability to use data or requiring data or model disgorgement, or claims for damages by guests and other affected parties.
In addition, instances of food-borne illness or food safety issues that occur solely at competitors’ restaurants, suppliers or distributors (even if we do not work with them) could result in negative publicity about the restaurant industry and adversely impact our sales.
In addition, instances of food-borne illness or food safety issues that occur solely at competitors’ restaurants or at suppliers or distributors (even if we do not work with them) could result in negative publicity about the restaurant industry and adversely impact our sales.
The risk of illnesses associated with our food also may increase due to our delivery or catering businesses, in which our food is transported, stored and/or served in conditions that are not under our control.
The risk of illnesses associated with our food also may increase due to our delivery and catering businesses, in which our food is transported, stored and/or served in conditions that are not under our control.
In addition, failure to adequately monitor and proactively respond to employee dissatisfaction could lead to poor guest satisfaction, higher turnover, litigation and unionization efforts, which could negatively impact our financial results.
In addition, our failure to adequately monitor and proactively respond to employee dissatisfaction could lead to poor guest satisfaction, higher turnover, litigation and unionization efforts, which could negatively impact our financial results.
A failure to maintain appropriate organizational capability to support our strategic initiatives, a failure to implement appropriate development programs and build adequate bench strength with key skillsets, or a failure to effectively manage our leadership succession, could jeopardize our ability to meet our business performance expectations and growth targets.
A failure to maintain appropriate organizational capability to support our strategic initiatives, a failure to implement appropriate leadership development programs and build adequate bench strength with key skillsets, or a failure to effectively manage our leadership succession, could jeopardize our ability to meet our business performance expectations and growth targets.
The prices for some of our ingredients, such as beef, avocados and other produce fluctuate due to factors beyond our control, such as limited sources, seasonal shifts, climate conditions, inclement weather, natural disasters, inflation, military and geopolitical conflicts and industry demand, including as a result of animal disease outbreaks, international commodity markets, food safety concerns, product recalls and government regulation.
The prices for some of our ingredients, such as beef, avocados and other produce fluctuate due to factors beyond our control, such as limited sources, seasonal shifts, climate conditions or inclement weather, natural disasters, inflation, military and geopolitical conflicts and industry demand, including as a result of animal disease outbreaks, international commodity markets, food safety concerns, product recalls and government regulation.
An inability of our suppliers to accommodate our growth in a timely or cost-effective manner could impair our growth and have an adverse effect on our business, financial condition, results of operations, and prospects. Legal and Regulatory Risks We could be party to litigation or other legal proceedings that could adversely affect our business, results of operations and reputation.
The inability of our suppliers to accommodate our growth in a timely or cost-effective manner could impair our growth and have an adverse effect on our business, financial condition, results of operations, and prospects. Legal and Regulatory Risks We could be party to litigation or other legal proceedings that could adversely affect our business, results of operations and reputation.
In addition, we source some ingredients (including avocados, tomatoes, beef, pork, limes and peppers) restaurant equipment, packaging and paper products outside the U.S. (including from Mexico, Canada and China), which could subject them to increased tariffs, trade sanctions or taxes.
In addition, we source some ingredients (including avocados, tomatoes, beef, pork, limes, peppers and spices), restaurant equipment, packaging and paper products outside the U.S. (including from Mexico, Canada and China), which could subject them to increased tariffs, trade sanctions or taxes.
In addition, we incur substantial startup expenses each time we open a new restaurant, and it can take up to 36 months to ramp up the sales and profitability of a new restaurant, during which time costs may be higher as we train new employees and build up a guest base.
In addition, we incur substantial startup expenses each time we open a new restaurant, and it can take around 36 months to ramp up the sales and profitability of a new restaurant, during which time costs may be higher as we train new employees and build up a guest base.
We have experienced and may continue to experience challenges in hiring and retaining restaurant employees and in maintaining full restaurant staffing in various locations, which has resulted in longer wait times for guest orders, temporary closures of the digital make line and decreased employee and guest satisfaction.
We have experienced and may continue to experience challenges in hiring and retaining restaurant employees and in maintaining full restaurant staffing in various locations, which may have resulted in longer wait times for guest orders, temporary closures of the digital make line and decreased employee and guest satisfaction.
Although we have operational safeguards in place and we take efforts to ensure that our third-party providers have implemented proper standards and controls, we cannot guarantee that breaches or failures caused by these third-party systems or platforms will not occur.
Although we have operational safeguards in place and we take efforts to ensure that our third-party providers have implemented proper safeguards and controls, we cannot guarantee that breaches or failures caused by these third-party systems or platforms will not occur.
For example, measuring Scope 1, 2 and 3 greenhouse gas emissions relating to our business, developing reduction plans and initiatives, and creating and disclosing achievable reduction goals can be costly, difficult and time consuming and is subject to evolving reporting standards, including California’s Climate Corporate Data Accountability Act, California’s Greenhouse Gases: Climate-Related Financial Risk Bill and similar proposals by other national, local and international regulatory agencies.
For example, measuring Scope 1, 2 and 3 greenhouse gas emissions relating to our business, developing reduction plans and initiatives, and creating and disclosing achievable reduction goals can be costly, difficult and time consuming and is subject to evolving reporting standards, including California’s Climate Corporate Data Accountability Act and Climate-Related Financial Risk Act, and similar proposals by other national, local and international regulatory agencies.
These privacy and data protection laws and regulations are quickly evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations and enforcement.
These privacy, consumer protection, and data protection laws and regulations are quickly evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations and enforcement.
In addition, adverse publicity resulting from claims may damage our reputation. 16 Table of Contents We are subject to extensive laws, government regulation, and other legal requirements and our failure to comply with existing or new laws and regulations could adversely affect our operational efficiencies, ability to attract and retain talent and results of operations.
In addition, adverse publicity resulting from claims may damage our reputation. 15 Table of Contents We are subject to extensive laws, government regulation, and other legal requirements and our failure to comply with existing or new laws and regulations could adversely affect our operational efficiencies, ability to attract and retain talent and results of operations.
Shortages or interruptions in the supply of ingredients could adversely affect our operating results. Our business is dependent on frequent and consistent deliveries of ingredients that comply with our Food with Integrity specifications, such as dairy (for cheese, sour cream and queso) and chicken that meets our Responsibly Raised requirements.
Shortages or interruptions in the supply of ingredients could adversely affect our operating results. Our business is dependent on frequent and consistent deliveries of ingredients that comply with our Food with Integrity specifications, such as dairy (for cheese, sour cream and queso), and beef, pork and chicken that meets our Responsibly Raised requirements.
We also believe our culture is an important contributor to our success, and as we continue to grow it may be increasingly difficult to imbed and maintain our culture across the company. Our failure to sufficiently invest in our infrastructure and information systems and maintain our strong staffing and culture could harm our brand and operating results.
We also believe our culture is an important contributor to our success, and as we continue to grow it may be increasingly difficult to embed and maintain our culture across the company. Our failure to sufficiently invest in our infrastructure and information systems and maintain our strong staffing and culture could harm our brand and operating results.
In addition, the opening of new stores may negatively impact the profitability of existing stores that are located nearby. 17 Table of Contents Our ability to open and profitably operate new restaurants also is subject to various risks, such as the identification and availability of desirable locations; the negotiation of acceptable lease terms; the need to obtain all required governmental permits (including zoning approvals and liquor licenses) and comply with other regulatory requirements; the availability of capable contractors and subcontractors; increases in the cost and decreases in the availability of labor and building material; changes in weather, natural disasters, pandemics or other acts of God that could delay construction and adversely affect guest traffic; our ability to hire and train qualified management and restaurant employees; and general economic and business conditions.
In addition, the opening of new restaurants may negatively impact the profitability of existing restaurants that are located nearby. 16 Table of Contents Our ability to open and profitably operate new restaurants also is subject to risks, such as the identification and availability of desirable locations; the negotiation of acceptable lease terms; the need to obtain required governmental permits (including zoning approvals and liquor licenses) and comply with other regulatory requirements; the availability of capable contractors and subcontractors; increases in the cost and decreases in the availability of labor and building material; changes in weather, natural disasters, pandemics or other acts of God that could delay construction and adversely affect guest traffic; our ability to hire and train qualified management and restaurant employees; and general economic and business conditions.
Any increase in the prices of the ingredients most critical to our menu, such as chicken, beef, dairy (for cheese, sour cream and queso), avocados, tomatoes and pork, would have a particularly adverse effect on our operating results.
Any increase in the prices of the ingredients most critical to our menu, such as chicken, beef, dairy (for cheese, sour cream and queso), avocados, tortillas and pork, would have a particularly adverse effect on our operating results.
The adverse impact of such incidents may be compounded by negative publicity, including through social or digital media, or if they result in litigation. Social media, video-sharing, networking, and gaming and messaging platforms dramatically increase the speed with which negative publicity is disseminated, often before we have a meaningful opportunity to investigate, respond to and address an issue.
The adverse impact of such incidents may be compounded by negative publicity, including through social or digital media, or if they result in litigation. Social media, video-sharing, networking, and gaming and messaging platforms dramatically increase the speed and reach at which negative publicity is disseminated, often before we have a meaningful opportunity to investigate, respond to and address an issue.
The ordering and payment platforms used by these third parties, our mobile app or our online ordering site have been and could again be interrupted by technological failures, user errors, cyber-attacks or other factors, which could adversely impact sales through these channels and negatively impact our overall sales and reputation. 11 Table of Contents Risks Related to Human Capital If we are not able to hire, develop and retain qualified restaurant employees and/or appropriately plan our workforce, our growth plan and profitability could be adversely affected.
The ordering and payment platforms used by these third parties, our mobile app or our online ordering site have been and could again be interrupted by technological failures, user errors, cyber-attacks or other factors, which could adversely impact sales through these channels and negatively impact our overall sales and reputation. 10 Table of Contents Risks Related to Human Capital If we are not able to hire, train and retain qualified restaurant employees and/or appropriately plan our workforce, our growth plan and profitability could be adversely affected.
If the third-party delivery companies we utilize increase the fees they charge users or give greater priority or promotions on their platforms to other restaurants, our delivery business and our sales may be negatively impacted.
If the third-party delivery companies we use increase the fees they charge users or give greater priority or promotions on their platforms to other restaurants, our delivery business and our sales may be negatively impacted.
We could also be subjected to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or consumers (such as boycotts or negative publicity campaigns) that could adversely affect our reputation, business, financial performance and growth. 19 Table of Contents Climate change and volatile adverse weather conditions could adversely affect our restaurant sales or results of operations.
We could also be subjected to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or consumers (such as boycotts or negative publicity campaigns) that could adversely affect our reputation, business, financial performance and growth. Climate change and volatile adverse weather conditions could adversely affect our restaurant sales or results of operations.
In addition, state and local laws may require wage increases and standards on working hours and other factors that would restrict our flexibility to respond to market conditions and increase our costs without corresponding benefits.
In addition, state and local laws may require wage increases, restrictions on working hours and other factors that would restrict our flexibility to respond to market conditions and increase our costs without corresponding benefits.
Any report, legitimate or rumored, of food-borne illness caused by pathogens such as E. coli, hepatitis A, norovirus, listeria, Campylobacter, Clostridium perfringens or salmonella, or other food safety issues, such as food tampering or contamination, at one of our restaurants could adversely affect our reputation and have a negative impact on our sales.
Any report, legitimate or rumored, of food-borne illness caused by pathogens such as E. coli, hepatitis A, norovirus, listeria, Campylobacter, Clostridium perfringens or salmonella, or other food safety issues, such as food tampering, contamination or natural or foreign objects, at one of our restaurants could adversely affect our reputation and have a negative impact on our sales.
Our business is subject to extensive federal, state, local and international laws and regulations, including those relating to: • preparation, sale and labeling of food, including regulations of the Food and Drug Administration, which oversees the safety of the entire food system and covers inspections and mandatory food recalls, menu labeling and nutritional content; • employment practices and working conditions, including minimum wage rates, wage and hour practices, meal and rest breaks, fair workweek/secure scheduling and “just cause” legislation, employment of minors, discrimination, harassment, classification of employees, paid and family leave, workplace safety, immigration and overtime among others; • privacy and data security (including regulations governing the protection of personal information, advertising and marketing, access by children, biometrics, surveillance, artificial intelligence, health-related information and financial information), such as California Privacy Rights Act and CCPA in California and privacy-related legislation in a growing number of other states, and international laws such as GDPR in the European Union and Personal Information Protection and Electronic Documents Act in Canada; • health, sanitation, safety and fire standards and the sale of alcoholic beverages; • building and zoning requirements, including state and local licensing and regulation governing the design and operation of facilities and land use; • claims made in marketing and advertising, including regarding nutritional information and sustainability impacts; • public accommodations and safety conditions, including the Americans with Disabilities Act and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations, online resources and other areas; • environmental matters, such as emissions and air quality; water consumption; the discharge, storage, handling, release and disposal of hazardous or toxic substances; local ordinances restricting the types of packaging we can use in our restaurants; and claims we make about our sustainability practices and achievements; • new or increased tariffs, trade sanctions or taxes; and • public company compliance, disclosure and governance matters, including accounting and tax regulations, SEC and NYSE disclosure requirements.
Our business is subject to extensive federal, state, local and international laws and regulations, including those relating to: • preparation, sale and labeling of food, including regulations of the Food and Drug Administration, which oversees the safety of the entire food system and covers inspections and mandatory food recalls, menu labeling and nutritional content; • employment practices and working conditions, including minimum wage rates, wage and hour practices, meal and rest breaks, fair workweek/secure scheduling and “just cause” legislation, employment of minors, discrimination, harassment, classification of employees, paid and family leave, workplace safety, immigration and overtime among others; • privacy and data security (including regulations governing the protection of personal information, advertising and marketing, access by children, biometrics, surveillance, artificial intelligence, health-related information and financial information); • health, sanitation, safety and fire standards and the sale of alcoholic beverages; • building and zoning requirements, including state and local licensing and regulation governing the design and operation of facilities and land use; • claims made in marketing and advertising, including regarding nutritional information and sustainability impacts; • public accommodations and safety conditions, including the Americans with Disabilities Act and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations, online resources and other areas; • environmental matters, such as emissions and air quality; water consumption; the discharge, storage, handling, release and disposal of hazardous or toxic substances; local ordinances restricting the types of packaging we can use in our restaurants; and claims we make about our sustainability practices and achievements; • new or increased tariffs, trade sanctions or taxes; and • public company compliance, disclosure and governance matters, including accounting and tax regulations, SEC and NYSE disclosure requirements.
Depending on which ordering platform a guest uses – our platform or the third-party delivery service platform – the delivery fee we collect from the guest may be less than the actual delivery cost.
Depending on which ordering platform a guest uses – our brand platform or the third-party delivery platform – the delivery fee we collect from the guest may be less than the actual delivery cost.
Negative online postings or comments about us, including as a result of inaccurate, fictitious or malicious postings or media content, have in the past and could in the future magnify and prolong the adverse impact of any one incident and increase the damage to the value of our brand. 10 Table of Contents Additionally, consumer demand for our products and our brand value could diminish significantly if we, our employees or business partners fail to comply with applicable laws and regulations, take controversial positions or actions, fail to deliver a consistently positive guest experience or fail to foster an inclusive and welcoming environment.
Negative online postings or comments about us, including as a result of inaccurate, fictitious or malicious postings or media content, have in the past and could in the future magnify and prolong the adverse impact of any one incident and increase the damage to the value of our brand. 9 Table of Contents Additionally, consumer demand for our products and our brand value could diminish significantly if we, our employees or business partners fail to comply with applicable laws and regulations, take positions or actions that may be considered controversial, fail to deliver a consistently positive guest experience or fail to foster an inclusive and welcoming environment.
Adverse weather conditions have in the past and may again impact guest traffic at our restaurants and, in more severe cases such as hurricanes, tornadoes, wildfires or other natural disasters, cause temporary restaurant closures, all of which negatively impact our restaurant sales.
Adverse weather conditions have impacted and may again impact guest traffic at our restaurants and, in more severe cases such as hurricanes, tornadoes, wildfires or other natural disasters, cause temporary restaurant closures, all of which negatively impact our restaurant sales.
Increased competition could have an adverse effect on our sales, profitability and development plans. If guest tastes or dietary preferences change, if our marketing efforts are unsuccessful, or if our restaurants are unable to compete successfully with other restaurant outlets, our business could be adversely affected.
Increased competition could have an adverse effect on our sales, profitability and development plans. If guest tastes or dietary preferences change, if our marketing efforts are unsuccessful, or if we are unable to compete successfully with other restaurant concepts, our business could be adversely affected.
Failures may be caused by various factors, including power outages, natural disasters and other catastrophic events, physical theft, computer and network failures, inadequate or ineffective redundancy, problems with transitioning to upgraded or replacement systems or platforms, flaws in third-party software or services, errors or improper use by our employees or the third-party service providers.
Failures may be caused by factors such as power outages, natural disasters and other catastrophic events, physical theft, computer and network failures, inadequate or ineffective redundancy, problems with transitioning to upgraded or replacement systems or platforms, flaws in third-party software or services, or errors or improper use by our employees or our third-party service providers.
Failure of our business partners to adhere to our high food quality and operating standards, comply with applicable law, adhere to high ethical standards, and create a culture of respect in their restaurants could damage our brand reputation, domestically and internationally, and impair our international expansion plans.
Failure of our business partners to adhere to our high food quality and operating standards, comply with applicable law, adhere to high ethical standards, and create a culture of respect in the partner-operated restaurants could damage our brand reputation, domestically and internationally, and impair our international expansion plans.
To the extent we, a third party or such an individual were to experience a breach of our or their information technology systems that results in the unauthorized access, theft, use, destruction or other compromises of guests’ or employees’ data or confidential information of Chipotle stored in or transmitted through such systems, including through cyber-attacks or other external or internal methods, it could result in a material loss of revenues from the potential adverse impact to our reputation and brand, a decrease in our ability to retain guests or attract new ones, the imposition of potentially significant costs (including loss of data or payment for recovery of data) and liabilities, loss of business, loss of business partners and licensees and the disruption to our supply chain, business and plans.
To the extent we, a third party or any such individual were to experience a breach of our or their information technology systems that results in the unauthorized access, theft, use, destruction or other compromises of guests’ or employees’ data or confidential information of Chipotle, including through cyber-attacks or other external or internal methods, it could have an adverse impact on our reputation and brand and we could experience a material loss of revenues, a decrease in our ability to retain guests or attract new ones, the imposition of potentially significant costs (including loss of data or payment for recovery of data) and liabilities, loss of business partners and the disruption to our supply chain and business plans.
Incidents that could erode trust in our brand include actual or perceived food safety or food-borne illnesses; allegations of unethical, racially-biased, inequitable, or socially irresponsible behavior by employees and/or guests; privacy breaches or violations of privacy laws; safety-related incidents occurring in or around our restaurants; guest perceptions regarding smaller entrée portion sizes; or other events or incidents described in this risk factors section.
Incidents that could erode trust in our brand include actual or perceived food safety or food-borne illnesses; allegations of unethical or unprofessional behavior by employees and/or guests; privacy breaches or violations of privacy laws; safety-related incidents occurring in or around our restaurants; guest perceptions regarding smaller entrée portion sizes; or other events or incidents described in this risk factors section.
Such security breaches also could result in a violation of applicable U.S. and international privacy, cyber and other laws or trigger data breach notification laws, including new disclosure rules promulgated by the SEC, and subject us to private third party or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability.
Such security breaches also could result in a violation of applicable U.S. and international privacy, cyber and other laws or trigger data breach notification laws, including under the SEC’s disclosure rules, and subject us to private third party or securities litigation and governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability.
Although we believe we have potential alternative suppliers and sufficient reserves of ingredients, shortages or interruptions in our supply of ingredients could adversely affect our financial results. If our supply chain capacity does not expand to match our new restaurant growth, our long-term growth goals could be impaired or delayed.
Although we believe we have potential alternative suppliers and sufficient reserves of ingredients, shortages or interruptions in our supply of ingredients could adversely affect our financial results. 14 Table of Contents If our supply chain capacity does not expand to support our new restaurant growth, our long-term growth goals could be impaired or delayed.
We provide extensive training to our business partners and we require compliance with specific food quality and safety standards and guest service levels in our agreements with business partners; however, we do not have direct control over the restaurants operated by third-party partners, and the quality and service in those restaurants may be less than the quality and service of Chipotle-operated restaurants.
We provide extensive training to our business partners and we require compliance with specific food quality and safety standards and guest service levels in our agreements with business partners; however, we do not have direct control over the partner-operated restaurants, and the quality and service in those restaurants may be less than the quality and service of Chipotle-owned restaurants.
Our use of third-party delivery services may not be profitable and substandard service may negatively impact our reputation. Over 15% of our 2024 food and beverage revenue consisted of delivery orders for which we are reliant on third-party delivery companies.
Our use of third-party delivery services may not be profitable and substandard service may negatively impact our reputation. Over 16% of our 2025 food and beverage revenue consisted of delivery orders for which we are reliant on third-party delivery companies.
These legal proceedings have involved, and in the future may involve, allegations of illegal, unfair or inconsistent employment practices, including those governing wage and hour, employment of minors, discrimination, harassment, wrongful termination, and vacation and family leave laws; food safety issues including food-borne illness, food contamination and adverse health effects from consumption of our food products; data security or privacy breaches; discrimination against guests or job applicants; personal injury in our restaurants; marketing and advertising claims, including claims that our Food with Integrity, marketing or sustainability claims are misleading or inaccurate; infringement of patent, copyright or other intellectual property rights; violation of the federal securities laws; workers’ compensation; or other concerns.
These legal proceedings have involved, and in the future may involve, allegations of illegal, unfair or inconsistent employment practices, including those governing wage and hour, employment of minors, discrimination, harassment, wrongful termination, fair scheduling, pay disclosure and vacation and family leave laws; food safety issues including food-borne illness, food contamination and adverse health effects from consumption of our food products; data security or privacy incidents or violations of related laws; discrimination against guests or job applicants; personal injury in our restaurants; marketing and advertising claims, including claims that our Food with Integrity, marketing, nutrition, or sustainability claims are misleading or inaccurate or that price-related disclosures are misleading; infringement of patent, copyright or other intellectual property rights; violation of the federal securities laws; workers’ compensation; or other concerns.
We are heavily dependent on information technology systems, including for administrative functions, point-of-sale and payment processing in our restaurants, digital ordering and delivery business, tracing ingredients back to suppliers and growers, digital Hazard Analysis and Critical Control Points monitoring, monitoring and managing our supply chain, our guest rewards program, marketing initiatives, employee engagement and payroll processing, and various other processes and transactions.
We are heavily dependent on information technology systems, including for point-of-sale and payment processing in our restaurants, digital ordering and order delivery, tracing ingredients back to suppliers and growers, digital Hazard Analysis and Critical Control Points monitoring, monitoring and managing our supply chain, our guest rewards program, payroll processing, sales forecasting, marketing initiatives, business analytics and various other processes and transactions.
We are party to a number of pending lawsuits and governmental audits alleging violations of federal and state employment laws, including wage and hour claims, and we could be involved in similar or even more significant litigation and legal proceedings in the future.
We are party to multiple lawsuits and governmental audits alleging violations of federal and state employment laws, including wage and hour and predictive scheduling claims, and we could be involved in similar or even more significant litigation and legal proceedings in the future.
A judgment significantly in excess of any applicable insurance coverage or third-party indemnity could materially adversely affect our financial condition or results of operations.
A judgment significantly greater than any applicable insurance coverage or third-party indemnity could materially adversely affect our financial condition or results of operations.
The increasing use of these claims by competitors, regardless of the accuracy of such claims, may lessen our differentiation and make it more difficult for us to compete. If we are unable to continue to maintain our distinctiveness and compete effectively, our business, financial condition and results of operations could be adversely affected.
The use of these claims by competitors, even if such claims are not accurate or comparable, may lessen our differentiation and make it more difficult for us to compete. If we are unable to continue to maintain our distinctiveness and compete effectively, our business, financial condition and results of operations could be adversely affected.
Our liability exposure for these employment laws and regulations may be higher than our restaurant peers because we have more employees, since we are one of the largest restaurant companies that owns and operates all our restaurants, while most of our restaurant peers franchise some or a significant portion of their operations. 12 Table of Contents Increases in the cost of labor, including mandated minimum wage increases and increases in the cost of health benefits, could adversely impact our business and profitability.
Our potential liability for these employment laws and regulations may be higher than our restaurant peers because, as one of the largest restaurant companies that owns and operates all our restaurants in the U.S. and Canada, we have more employees than most of our restaurant peers, which franchise some or a significant portion of their operations. 11 Table of Contents Increases in the cost of labor, including mandated minimum wage increases and increases in the cost of health benefits, could adversely impact our business and profitability.
Our quarterly financial results may fluctuate significantly and could fail to meet investors’ expectations for various reasons, including: • negative publicity about the safety of our food, employment-related issues, guest safety, litigation or other issues involving our restaurants; • fluctuations in supply costs, particularly for our most significant ingredients, and our inability to offset the higher cost with price increases, without adversely impacting guest traffic; • our inability to purchase sufficient quantities of our key ingredients and equipment as our restaurant count grows; • labor availability and wages of restaurant management and employees; • increases in marketing or promotional expenses; • the timing of new restaurant openings and related revenues and expenses, and the operating costs at newly opened restaurants; • the impact of inclement weather and natural disasters, such as freezes and droughts, which could decrease guest traffic and increase the costs of ingredients; • the amount and timing of stock-based compensation; • litigation, settlement costs and related legal expenses; • taxes, new or increased tariffs or trade sanctions, asset impairment charges and non-operating costs; and • variations in general economic conditions, including the impact of rising inflation and the impact of rising interest rates on consumer demand trends.
Our quarterly financial results may fluctuate significantly and could fail to meet investors’ expectations for various reasons, including: • negative publicity about the safety of our food, employment-related issues, guest safety, litigation or other issues involving our restaurants; • fluctuations in supply costs, particularly for our most significant ingredients, and our inability to offset the higher cost with price increases, without adversely impacting guest traffic; • our inability to purchase sufficient quantities of our key ingredients and equipment as our restaurant count grows; • labor availability and wages of restaurant management and employees; • increases in marketing or promotional expenses; • the timing of new restaurant openings and related revenues and expenses, and the operating costs at newly opened restaurants; • the impact of inclement weather and natural disasters, such as freezes and droughts, which could decrease guest traffic and increase the costs of ingredients; • the amount and timing of stock-based compensation; • litigation, settlement costs and related legal expenses; • taxes, new or increased tariffs or trade sanctions, asset impairment charges and non-operating costs; and • macroeconomic conditions described above. 19 Table of Contents For these reasons, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year.
Our profitability has been and could continue to be adversely impacted by increases in labor costs, including wages and health benefits, which are some of our most significant costs, including increases triggered by federal, state and local laws governing matters such as minimum wages, meal and rest breaks and changes to eligibility for overtime pay; regulations regarding scheduling and benefits; increased health care and workers’ compensation insurance costs; and higher wages and benefit costs necessary to attract, hire and retain high-quality employees with the right skill sets in a highly competitive job market.
Increases could be triggered by federal, state and local laws governing matters such as minimum wages, meal and rest breaks and changes to eligibility for overtime pay; regulations regarding scheduling and benefits; increased health care and workers’ compensation insurance costs; and higher wages and benefit costs necessary to attract, hire and retain high-quality employees with the right skill sets in a highly competitive job market.
We believe guests expect the same high quality food and excellent customer service at restaurants operated by licensees and joint venture partners as they receive in Chipotle-owned and operated restaurants.
We believe guests expect the same high quality food and excellent customer service at partner-operated restaurants as they receive in Chipotle-owned and operated restaurants.
Given the increasing complexity and sophistication of techniques used by bad actors to obtain unauthorized access to or disable information technology systems, and the fact that cyberattacks are being made by groups and individuals with a wide range of expertise and motives, it is increasingly difficult to anticipate and defend against cyberattacks, and a cyberattack could occur and persist for an extended period of time before being detected.
Given the increasing complexity and sophistication of techniques used by bad actors to obtain unauthorized access to or disable information technology systems, and the fact that cyberattacks are being made by groups and individuals with a wide range of expertise and motives, it is increasingly difficult to anticipate, defend against and detect cyberattacks.
Anticipated changes in immigration laws and regulations could decrease the pool of candidates with legal work authorization, cause disruption in the workforce for all companies that rely on hourly workers and increase the costs, time and requirements to hire new employees.
Changes in immigration laws could decrease the number of potential candidates with legal work authorization, disrupt the workforce for companies that rely on hourly workers and increase the costs, time and requirements to hire new employees.
The restaurant industry is highly competitive with respect to taste preferences, price, food quality and selection, customer service, brand reputation, digital engagement, advertising and promotional initiatives, and the location, attractiveness and maintenance of restaurants.
The restaurant industry is highly competitive on factors such as taste, price, food quality and selection, customer service, brand reputation, digital engagement, advertising and promotional initiatives, and the location, attractiveness and maintenance of restaurants.
For example, in 2022 we settled a complaint alleging that we violated New York City’s Fair Workweek law and Earned Safe and Sick Time Act, and we have undergone several audits of our compliance with employment law requirements, which could result in additional liabilities.
For example, in 2022 we settled a complaint alleging that we violated New York City’s Fair Workweek law and Earned Safe and Sick Time Act, and we currently are cooperating with a second audit by New York City of our compliance with employment law requirements, which could result in additional liabilities.
Climate change and government regulation relating to climate change mitigation also could result in construction delays for new restaurants and interruptions to the availability or increases in the cost of utilities.
These factors are beyond our control and may be unpredictable. Climate change and government regulation relating to climate change mitigation also could result in construction delays for new restaurants and interruptions to the availability or increases in the cost of utilities.
As of December 31, 2024, we owned and operated over 3,700 Chipotle restaurants and we plan to open a significant number of new restaurants in the next several years, working towards our long-term goal of 7,000 restaurants in North America.
As of December 31, 2025, we owned over 4,000 Chipotle restaurants and we plan to open a significant number of new restaurants in the next several years, working towards our long-term goal of 7,000 restaurants in the U.S. and Canada.
Incidents of food-borne illnesses continue to occur in the restaurant and retail food industries and incidents may result from the failure of restaurant employees to properly cook or maintain our ingredients, employees or guests entering our restaurant while infected with communicable diseases, or contaminated ingredients resulting from the failure of one of our suppliers to execute food safety preventive controls.
Incidents of food-borne illnesses have occurred and may continue to occur in our and other restaurants resulting from the failure of restaurant employees to properly cook or maintain ingredients; employees or guests entering a restaurant while infected with communicable diseases; or contaminated ingredients resulting from the failure of a supplier, distributor or employee to execute food safety preventive controls.
The ongoing and long-term costs of these impacts related to climate change and other sustainability-related issues could have a material adverse effect on our business and financial condition if we are not able to mitigate them. General Risk Factors Economic and business factors that are largely beyond our control may adversely affect consumer behavior and our financial results.
The ongoing and long-term costs of these impacts related to climate change and other sustainability-related issues could have a material adverse effect on our business and financial condition if we are not able to mitigate them.
Similar to many other restaurant companies, we have in the past experienced, and we expect to continue to experience, cyber-attacks, including phishing, and other attempts to breach, or gain unauthorized access to, our systems and databases.
Similar to many other restaurant companies, we have in the past experienced, and we expect to continue to experience, cyber-attacks, including phishing, and other attempts to breach, or gain unauthorized access to, our systems and databases and we expect the number and frequency of these attempts to increase as the scope and scale of our technology footprint and digital operations increases.
We also compete with non-traditional market participants, such as “convenience meals” in the form of entrées, side dishes or meal preparation kits from grocery stores, meal kit delivery services, and “ghost” or “dark” kitchens, where meals are prepared at separate takeaway premises rather than a restaurant, and with delivery aggregators and food delivery services, which provide consumers with convenient access to a broad range of competing restaurant chains and food retailers, particularly in urbanized areas, and may form a closer relationship with our guests.
We also compete with non-traditional market participants, such as “convenience meals” in the form of entrées, side dishes or meal preparation kits from grocery stores, meal kit delivery services, and “ghost” or “dark” kitchens, where meals are prepared at separate takeaway premises rather than a restaurant.
In addition, we could be criticized by anti-ESG stakeholders for the scope or nature of our sustainability initiatives or goals or for any revisions to these goals.
Achievement of this goal may prove to be more difficult and costly than we anticipate. In addition, we could be criticized by anti-ESG stakeholders for the scope or nature of our sustainability initiatives or goals or for any revisions to these goals.
We may be at a higher risk for food safety incidents than some competitors due to our greater use of fresh, unprocessed produce, handling of raw chicken in our restaurants, our reliance on employees cooking with traditional methods and the lack of artificial preservatives and frozen ingredients in our menu items.
We may have higher risk for food safety incidents than some of our competitors because we use fresh, unprocessed produce, handle raw chicken in our restaurants, rely on employees cooking with traditional methods and don't use artificial preservatives or frozen ingredients in our menu items.
Individuals performing work for us and these third parties also may access some of this data, including on personally owned digital devices.
In addition, individuals performing work for us and our third-party business partners may access some of this data, including on personally owned digital devices.
We previously announced that we had set science-based targets validated by the Science Based Targets Initiative to reduce absolute Scope 1, 2 and 3 greenhouse gas emissions 50% by 2030 from a 2019 base year, and achievement of this goal is subject to risks and uncertainties, many of which are outside of our control.
We previously announced that we had set science-based targets validated by the Science Based Targets Initiative to reduce absolute Scope 1, 2 and 3 greenhouse gas emissions 50% by 2030 from a 2019 base year, and achievement of this goal is subject to risks and uncertainties, including the challenge of lowering emissions from a 2019 base year as the number of restaurants we operate has increased significantly since 2019 and continues to increase.
Risks Related to our Brand Reputation and Restaurant Operations Food safety and food-borne illness concerns may have an adverse effect on our business by negatively impacting our brand, decreasing sales and increasing costs. Food safety is our top priority, and we dedicate significant resources to ensuring that our guests enjoy safe, high-quality food products.
Risks Related to our Brand Reputation and Restaurant Operations Food safety and food-borne illness concerns may have an adverse effect on our business by negatively impacting our brand, decreasing sales and increasing costs.
The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks. Our logging capabilities, or the logging capabilities of third parties, are not always complete or sufficiently granular, affecting our ability to fully understand the scope of security breaches.
Our logging capabilities, or the logging capabilities of third parties, are not always complete or sufficiently granular, affecting our ability to fully understand the scope of security breaches.
Higher menu prices or the perceived value of our meals relative to competitors may lead consumers to reduce their spending in our restaurants or switch to competitors’ value or lower-priced meals.
Higher menu prices or the perceived value of our meals relative to competitors may lead consumers to reduce their spending in our restaurants or switch to competitors’ value or lower-priced meals. If competitive or other factors prevent us from offsetting these higher costs through menu price increases, our profitability may decline.
We try to mitigate future price risk through forward contracts, strong partnerships with key suppliers, directly managing key raw material procurement and diversifying our supply base and countries of origin; however, these activities may not fully insulate us from increases in costs, which could have an adverse impact on our profitability. 15 Table of Contents We also could be adversely impacted by price increases specific to meats raised in accordance with our Responsibly Raised animal welfare criteria, and ingredients grown in accordance with our Food with Integrity specifications, the markets for which are generally smaller and more concentrated than the markets for conventionally raised or grown ingredients.
We try to mitigate future price risk through forward contracts, strong partnerships with key suppliers, directly managing key raw material procurement and diversifying our supply base and countries of origin; however, these activities may not fully insulate us from increases in costs, which could have an adverse impact on our profitability.
The amount and scope of insurance we maintain may not cover all types of claims that may arise. We rely heavily on information technology systems and failures or interruptions in our IT systems could harm our ability to effectively operate our business and/or result in the loss of guests or employees.
Risks Related to Cybersecurity, Data Privacy and IT Systems We are heavily dependent on information technology systems and failures or interruptions in our IT systems could harm our ability to effectively operate our business and/or result in the loss of guests or employees.
Risks Related to Cybersecurity, Data Privacy and IT Systems Breaches or other unauthorized access, theft, modification or destruction of guest and/or employee personal, confidential or other material information that is stored in our systems or by third parties on our behalf could damage our reputation and expose us to potential liabilities.
These new technologies may not deliver the expected efficiencies and could expose us to new risks, including risks related to cybersecurity, data privacy, inaccuracies, hallucinations, bias or discrimination and claims of intellectual property infringement. 12 Table of Contents Breaches or other unauthorized access, theft, modification or destruction of guest and/or employee personal information, or Chipotle confidential or proprietary information that is stored in our information technology systems or by third parties could damage our reputation and expose us to potential liabilities and loss of revenue.
These disclosure obligations are complex and not always consistent, making compliance difficult and uncertain. In addition, investors, guests and other stakeholders increasingly are focusing on sustainability matters and related disclosures. We have incurred and expect to continue to incur increased expenses and management time and attention to comply with these disclosure obligations and stakeholder expectations.
We are subject to evolving disclosure obligations promulgated by governmental and regulatory organizations relating to sustainability factors that impact our business. These disclosure obligations are complex and not always consistent, making compliance difficult and uncertain. We have incurred and expect to continue to incur increased expenses and management time and attention to comply with these disclosure obligations and stakeholder expectations.
In addition, real or perceived concerns about emerging food safety issues, such as phthalates, per- and polyfluoroalkyl substances ("PFAS"), microplastics or heavy metals in the U.S. food supply chain, could impact consumers’ confidence in the restaurant industry and reduce restaurant sales. Failure to maintain the reputation and relevance of the Chipotle brand could negatively impact our financial results .
In addition, real or perceived concerns about pervasive chemicals and substances in the U.S. food supply chain, such as phthalates, per- and polyfluoroalkyl substances ("PFAS"), microplastics or heavy metals, have been the subject of increased regulatory scrutiny and lawsuits against us and other restaurant companies, which could impact consumers’ confidence in the restaurant industry and reduce restaurant sales.
All of these regulations impose additional obligations on us, which could increase our operating costs, and our failure to comply with any of these regulations could subject us to penalties and other legal liabilities, which could adversely affect our ability to attract and retain employees and our results of operations, and potentially cause us to close or reduce operating hours of some restaurants in these jurisdictions.
Additional jurisdictions are considering similar types of legislation. These regulations impose additional obligations on us, which could increase our operating costs, and our failure to comply with any of these regulations could subject us to penalties and other legal liabilities.
Risks Related to Sustainability Factors We are subject to evolving public disclosure requirements and expectations, including with respect to sustainability matters, that could expose us to numerous risks and could adversely affect our reputation and results of operations. We are subject to evolving disclosure obligations promulgated by governmental and regulatory organizations relating to sustainability factors that impact our business.
New partnerships and/or acquisitions also may divert management’s attention from other initiatives and/or day-to-day operations, which could adversely affect our business and results of operations. 17 Table of Contents Risks Related to Sustainability Factors We are subject to evolving public disclosure obligations, including with respect to sustainability matters, which could expose us to numerous risks and could adversely affect our reputation and results of operations.
Persistent inflation and concern about a prolonged economic downturn may lead consumers to decrease their discretionary spending. A significant decrease in guest traffic or average transaction size would negatively impact our financial performance.
A significant decrease in guest traffic or average transaction size would negatively impact our financial performance.
In addition, our supply chain is subject to increased costs caused by the effects of climate change and diminished energy and water resources. Increasing weather volatility and changes in global weather patterns could reduce crop size and crop quality, or destroy crops altogether, which could result in decreased availability or higher pricing for our produce and other ingredients.
Increasing weather volatility and changes in global weather patterns could reduce crop size and crop quality, or destroy crops altogether, which could result in decreased availability or higher pricing for our produce and other ingredients. We may be forced to source ingredients from new geographic regions, which could impact quality and taste, and increase our costs.
We built strong value in the Chipotle brand by serving delicious, high quality food, made fresh every day using responsibly sourced ingredients served in generous portions. Our continued success depends on maintaining this compelling brand value, which may be eroded by numerous factors, some of which are outside of our control.
Failure to maintain the value and reputation of the Chipotle brand could negatively impact our financial results . We built strong value in the Chipotle brand by serving delicious, high quality food, made fresh every day using responsibly sourced ingredients served in generous portions.
Ongoing global conflicts have disrupted and could continue to disrupt some shipping routes, which could result in shortages or delays of certain ingredients and packaging. In addition, we have a single or a limited number of suppliers for some of our ingredients, including lemon and lime juice, tomatoes and adobo.
We could incur shortages of or increased costs for certain food packaging we use due to changes made by our suppliers to comply with these EPR laws. In addition, we have a limited number of suppliers for some of our ingredients, including lemon and lime juice, tomatoes and adobo.
However, even with strong preventative controls and interventions from farm to restaurant, food safety risks cannot be completely eliminated.
Food safety is our top priority, and we dedicate significant resources to ensuring that our food products are safe; however, even strong preventative controls and interventions from farm to restaurant cannot completely eliminate food safety risks.
Many of our information technology systems also contain confidential information about our business, such as business strategies, development initiatives and designs, and confidential information about third parties, such as suppliers.
Many of our information technology systems an d the systems of our third-party business partners (whether cloud-based or hosted in proprietary servers) contain personal, financial or other information of our guests, employees, and business partners, and confidential information about our business, such as business strategies, financial results, development initiatives, and confidential information about third parties, such as suppliers.
As our reliance on technology has grown, the scope and severity of potential risks from cyber threats has increased.
As our dependence on technology has grown, the scope and severity of potential risks from cyber-attacks and security threats have increased. We expect that the rapid evolution and increased adoption of artificial intelligence have heightened and will continue to heighten those risks.
Restaurant dining generally is dependent upon consumer discretionary spending, which may be affected by general economic conditions that are beyond our control.
Risks Related to Macroeconomic Conditions O u r financial condition and results of operations have been, and may continue to be, adversely affected by a number of macroeconomic and other factors, many of which are largely outside our control. Restaurant dining generally is dependent upon consumer discretionary spending, which may be affected by macroeconomic conditions that are beyond our control.
In 2024, the first licensed Chipotle restaurants opened in Kuwait and Dubai in partnership with international franchise retail operator Alshaya Group, and there are plans to open more licensed restaurants in other areas in the Middle East.
As of December 31, 2025, we had 14 international partner-operated Chipotle restaurants in the Middle East in partnership with the Alshaya Group, and we have plans to open more partner-operated Chipotle restaurants in the Middle East, Mexico and Asia.
As a result, if we fail to meet market expectations for our operating results in the future, any resulting decline in the price of our common stock could be significant.
We have in the past failed, and may in the future fail, to meet our forecasted guidance or market expectations, which has adversely affected, and could in the future adversely affect, the market price of our stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe provide prompt feedback (and, if necessary, additional training or remedial action) based on the results of such exercises. 21 Table of Contents Our processes also address cybersecurity risks associated with our use of third-party service providers including suppliers, software and cloud-based service providers, as well as third-party security firms used in different capacities to provide or operate some of our cybersecurity controls and technology systems.
Biggest changeOur processes also address cybersecurity risks associated with our use of third-party service providers including suppliers, software and cloud-based service providers, as well as third-party security firms used in different capacities to provide or operate some of our cybersecurity controls and technology systems.
We also are a member of an industry cybersecurity intelligence and risk sharing organization to stay abreast of changes in the cybersecurity environment. We assess Chipotle’s Information Security program using an industry cybersecurity framework from the National Institute of Standards and Technology.
We also are a member of an industry cybersecurity intelligence and risk sharing organization to stay abreast of changes in the cybersecurity environment. We assess Chipotle’s Information Security program using an industry cybersecurity framework from the National Institute of Standards and Technology (NIST).
We proactively evaluate the cybersecurity risk of a third party by utilizing a repository of risk assessments, external monitoring sources, threat intelligence and predictive analytics to better inform Chipotle during contracting and vendor selection processes. Additionally, when third party risks are identified, we require those third parties to agree by contract to implement appropriate security controls.
We proactively evaluate the cybersecurity risk of a third party by utilizing a repository of risk assessments, external monitoring sources, threat intelligence and predictive analytics to better inform Chipotle during contracting and vendor selection processes. Additionally, when third party risks are identified, we require those third parties to contractually agree to implement appropriate security controls.
The Committee regularly reviews with and discusses cybersecurity, privacy and data security programs, the status of projects to strengthen internal cybersecurity, results from third-party assessments, and any significant cybersecurity incidents, including recent incidents at other companies and the emerging threat landscape with our CISO and CCTO.
The Committee regularly reviews with and discusses cybersecurity, privacy and data security programs, the status of projects to strengthen internal cybersecurity, results from third-party assessments, and any significant cybersecurity incidents, including recent incidents at other companies and the emerging threat landscape with our CISO and CSTO.
For additional information, see “Risks Related to Cybersecurity, Data Privacy and IT Systems,” in Item 1A, “Risk Factors” in this Annual Report. Cybersecurity Governance Our cybersecurity risk management and strategy processes are led by our CISO and our CCTO.
For additional information, see “Risks Related to Cybersecurity, Data Privacy and IT Systems,” in Item 1A, “Risk Factors” in this Annual Report. Cybersecurity Governance Our cybersecurity risk management and strategy processes are led by our CISO and our CSTO.
The plan sets forth the steps for coordination among various corporate functions and governance groups and serves as a framework for the execution of responsibilities across businesses and operational roles.
The plan sets forth the steps for coordination among various corporate functions and serves as a framework for the execution of responsibilities across businesses and operational roles.
The Committee also reviews with management the implementation and effectiveness of the Company’s controls to monitor and mitigate cybersecurity risks. In addition, our Board receives an annual report and quarterly written updates regarding our cybersecurity program. 22 Table of Contents
The Committee also reviews with management the implementation and effectiveness of the Company’s controls to monitor and mitigate cybersecurity risks. In addition, our Board receives an annual report and quarterly written updates regarding our cybersecurity program.
We also maintain insurance coverage that, subject to its terms and conditions, is intended to help us cover certain costs associated with cybersecurity incidents and information system failures. In addition to our cybersecurity incident response plan, we conduct tabletop exercises to enhance our incident response preparedness.
We also maintain insurance coverage that, subject to its terms and conditions, is intended to help us cover certain costs associated with cybersecurity incidents and information system failures. 20 Table of Contents In addition to our cybersecurity incident response plan, we conduct tabletop exercises to enhance our incident response preparedness.
This program includes policies, processes and procedures that help assess and identify our cybersecurity risks and inform how security measures and controls are developed, implemented and maintained. The risk assessment along with risk-based analysis and judgment are used to select security controls to address risks.
This program includes policies, processes and procedures that help us assess and identify our cybersecurity risks and inform how our security measures and controls are developed, implemented and maintained. We use the risk assessment along with risk-based analysis and judgment to select security controls to address risks.
During this process, the following factors, among others, are considered: likelihood and severity of risk, impact on the Company and others if a risk materializes, feasibility and cost of controls and impact of controls on operations.
During this process, the following factors, among others, are considered: likelihood and severity of risk, impact on the Company and third parties we work with if a risk materializes, feasibility and cost of controls and impact of controls on operations.
Our enterprise risk management team collaborates with our Information Security function, led by our Chief Information Security Officer (“CISO”) and our Chief Customer and Technology Officer (“CCTO”), to gather insights for assessing, identifying and managing cybersecurity threat risks, their severity, and potential mitigations.
Our enterprise risk management team collaborates with our Information Security function, led by our Chief Information Security Officer (“CISO”) and our President, Chief Strategy and Technology Officer (“CSTO”), to gather insights for assessing, identifying and managing cybersecurity threat risks, the severity of the risks, and potential mitigations.
Our enterprise risk management framework considers cybersecurity risk alongside other company risks as part of our overall risk assessment process.
As part of our enterprise risk management program, we consider cybersecurity risk alongside other company risks as part of our overall risk assessment process.
Our employees undergo cybersecurity awareness training and regular phishing awareness campaigns that are based upon and designed to emulate real-world contemporary threats.
Our employees undergo cybersecurity awareness training and regular phishing awareness campaigns that are based upon and designed to emulate real-world contemporary threats. We provide prompt feedback (and, if necessary, additional training or remedial action) based on the results of such exercises.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2024, Chipotle and our consolidated subsidiaries owned and operated 3,726 restaurants. Our main office is located at 610 Newport Center Drive, Suite 1100, Newport Beach, CA 92660 and our telephone number is (949) 524-4000. We lease our main office and substantially all of the properties on which we operate restaurants.
Biggest changeITEM 2. PROPERTIES As of December 31, 2025, Chipotle and our consolidated subsidiaries owned and operated 4,042 restaurants. Our main office is located at 610 Newport Center Drive, Suite 1100, Newport Beach, CA 92660 and our telephone number is (949) 524-4000. We lease our main office and substantially all of the properties on which we operate restaurants.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS For information regarding legal proceedings, see Note 11. “Commitments and Contingencies” in our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 Table of Contents PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS For information regarding legal proceedings, see Note 11. “Commitments and Contingencies” in our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 21 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) Purchased 10/1 through 10/31 1,474,582 $ 58.05 1,474,582 $ 973,992,478 Purchased 11/1 through 11/30 2,348,512 $ 59.14 2,348,512 $ 835,097,636 Purchased 12/1 through 12/31 1,713,277 $ 62.31 1,713,277 $ 1,028,341,738 Total 5,536,371 $ 59.83 5,536,371 (1) Shares were repurchased pursuant to repurchase programs announced on July 24, 2024 and October 29, 2024.
Biggest changePeriod Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) Purchased 10/1 through 10/31 5,104,055 $ 38.89 5,104,055 $ 453,758,675 Purchased 11/1 through 11/30 10,929,053 $ 31.30 10,929,053 $ 111,656,732 Purchased 12/1 through 12/31 5,688,884 $ 35.33 5,688,884 $ 1,710,669,225 Total 21,721,992 $ 34.14 21,721,992 (1) Shares were repurchased pursuant to repurchase authorizations announced on July 23, 2025, September 15, 2025, and December 8, 2025.
We intend to continue to retain earnings for use in the operation and expansion of our business and to repurchase shares of common stock (subject to market conditions), and therefore do not anticipate paying any cash dividends on our common stock in the foreseeable future. 24 Table of Contents COMPARISON OF CUMULATIVE TOTAL RETURN The following graph compares the cumulative annual stockholders return on our common stock from December 31, 2019, through December 31, 2024, to that of the total return index for the S&P 500 and the S&P 500 Restaurants Index assuming an investment of $100 on December 31, 2019.
We intend to continue to retain earnings for use in the operation and expansion of our business and to repurchase shares of common stock (subject to market conditions), and therefore do not anticipate paying any cash dividends on our common stock in the foreseeable future. 22 Table of Contents COMPARISON OF CUMULATIVE TOTAL RETURN The following graph compares the cumulative annual stockholders return on our common stock from December 31, 2020, through December 31, 2025, to that of the total return index for the S&P 500 and the S&P 500 Restaurants Index assuming an investment of $100 on December 31, 2020.
Purchases of Equity Securities by the Issuer The table below reflects shares of common stock we repurchased during the fourth quarter of 2024.
Purchases of Equity Securities by the Issuer The table below reflects shares of common stock we repurchased during the fourth quarter of 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the symbol “CMG.” As of January 31, 2025, there were approximately 2,394 shareholders of record. This does not include persons whose stock is in nominee or “street name” accounts through brokers.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the symbol “CMG.” As of January 30, 2026, there were approximately 2,652 shareholders of record. This does not include persons whose stock is in nominee or “street name” accounts through brokers.
Source data: Bloomberg ITEM 6. RESERVED 25 Table of Contents
Source data: Bloomberg ITEM 6. RESERVED 23 Table of Contents
(2) The December total includes an additional $300 million in authorized repurchases approved on December 17, 2024 and announced February 4, 2025. There is no expiration date for this program. The authorization to repurchase shares will end when we have repurchased the maximum amount of shares authorized, or we have determined to discontinue such repurchases.
(2) The December total includes $1.8 billion in additional authorizations approved by our Board of Directors on December 4, 2025 and announced on December 8, 2025. There is no expiration date for this program. The authorization to repurchase shares will end when we have repurchased the maximum amount of shares authorized, or we have determined to discontinue such repurchases.
Company/Index 2019 2020 2021 2022 2023 2024 Chipotle Mexican Grill, Inc. $ 100 $ 166 $ 209 $ 166 $ 273 $ 360 S&P 500 100 116 148 119 148 182 S&P 500 Restaurants 100 116 140 126 142 146 *$100 invested on December 31, 2019, in stock or index, including reinvestment of dividends. Fiscal year ending December 31, 2024.
Company/Index 2020 2021 2022 2023 2024 2025 Chipotle Mexican Grill, Inc. $ 100 $ 126 $ 100 $ 165 $ 217 $ 134 S&P 500 100 129 106 133 167 196 S&P 500 Restaurants 100 123 113 129 136 136 *$100 invested on December 31, 2020, in stock or index, including reinvestment of dividends. Fiscal year ended December 31, 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFinancial Statements and Supplementary Data 35 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 35 Consolidated Balance Sheets 37 Consolidated Statements of Income and Comprehensive Income 38 Consolidated Statements of Shareholders’ Equity 39 Consolidated Statements of Cash Flows 40 Notes to Consolidated Financial Statements 41 Note 1 – Description of Business and Summary of Significant Accounting Policies 41 Note 2 – Supplemental Balance Sheet Information 48 Note 3 – Revenue Recognition 49 Note 4 – Fair Value Measurements 50 Note 5 – Equity Investments 51 Note 6 – Income Taxes 52 Note 7 – Shareholders’ Equity 55 Note 8 – Stock-Based Compensation and Employee Benefit Plans 55 Note 9 – Leases 59 Note 10 – Earnings Per Share 60 Note 11 – Commitments and Contingencies 60 Note 12 – Debt 61 Note 13 – Related Party Transactions 61 Note 14 – Segment Reporting 61
Biggest changeFinancial Statements and Supplementary Data 34 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 34 Consolidated Balance Sheets 36 Consolidated Statements of Income and Comprehensive Income 37 Consolidated Statements of Shareholders’ Equity 38 Consolidated Statements of Cash Flows 39 Notes to Consolidated Financial Statements 40 Note 1 – Description of Business and Summary of Significant Accounting Policies 40 Note 2 – Supplemental Balance Sheet Information 47 Note 3 – Revenue Recognition 48 Note 4 – Fair Value Measurements 49 Note 5 – Equity Investments 50 Note 6 – Income Taxes 51 Note 7 – Shareholders’ Equity 55 Note 8 – Stock-Based Compensation and Employee Benefit Plans 55 Note 9 – Leases 58 Note 10 – Earnings Per Share 60 Note 11 – Commitments and Contingencies 60 Note 12 – Debt 61 Note 13 – Related Party Transactions 61 Note 14 – Segment Reporting 61
Item 6. Reserved 25 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 26 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 34 Item 8.
Item 6. Reserved 23 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 32 Item 8.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeGeneral and Administrative Expenses Year ended December 31, Percentage 2024 2023 change (dollars in millions) General and administrative expenses $ 697.5 $ 633.6 10.1% As a percentage of total revenue 6.2% 6.4% (0.2 %) The following is a summary of the change in general and administrative expenses for the period indicated: Year ended (dollars in millions) For the period ended December 31, 2023 $ 633.6 Change from: Wages 20.5 Conferences, primarily the biennial All Managers’ Conference 17.7 Legal contingencies 16.6 Outside services related to corporate initiatives 8.1 Stock-based compensation 5.3 Restructuring costs (6.5) Other 2.2 For the period ended December 31, 2024 $ 697.5 Impairment, Closure Costs, and Asset Disposals Year ended December 31, Percentage 2024 2023 change (dollars in millions) Impairment, closure costs, and asset disposals $ 26.9 $ 38.4 (29.8%) As a percentage of total revenue 0.2% 0.4% (0.2%) Impairment, closure costs, and asset disposals decreased in dollar terms for the year ended December 31, 2024 compared to the year ended December 31, 2023 , primarily due to a gain on the sale of corporate equipment and higher charges related to the replacement of certain leasehold improvements in the comparable period. 29 Table of Contents Interest and Other Income, Net Year ended December 31, Percentage 2024 2023 change (dollars in millions) Interest and other income, net $ 93.9 $ 62.7 49.8% As a percentage of total revenue 0.8% 0.6% 0.2% Interest and other income, net increased in dollar terms for the year ended December 31, 2024 compared to the year ended December 31, 2023 , primarily due to increased interest income from higher investment balances in U.S.
Biggest changeGeneral and Administrative Expenses Year ended December 31, Percentage 2025 2024 change (dollars in millions) General and administrative expenses $ 652.0 $ 697.5 (6.5%) As a percentage of total revenue 5.5% 6.2% (0.7 %) 27 Table of Contents The following is a summary of the change in general and administrative expenses for the period indicated: Year ended (dollars in millions) For the period ended December 31, 2024 $ 697.5 Change from: Stock-based compensation, excluding August 2024 retention awards (31.8) Performance bonuses (28.0) Legal contingencies (22.5) Conferences, primarily biennial All Managers’ Conference (16.2) Legal services 4.3 Outside services related to corporate initiatives 11.1 Wages 17.6 Stock-based compensation, August 2024 retention awards 17.7 Other 2.4 For the period ended December 31, 2025 $ 652.0 Depreciation and Amortization Year ended December 31, Percentage 2025 2024 change (dollars in millions) Depreciation and amortization $ 361.4 $ 335.0 7.9% As a percentage of total revenue 3.0% 3.0% - % Depreciation and amortization remained flat as a percentage of total revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” we commonly discuss the following key operating metrics which we believe will drive our financial results and long-term growth model.
Throughout “Management’s Discussion and Analysis of Financial Condition and Results of Operations” we discuss the following key operating metrics which we believe will drive our financial results and long-term growth model.
Seasonal factors, however, might be moderated or outweighed by other factors that may influence our quarterly results, such as unexpected publicity impacting our business in a positive or negative way, disease outbreak, epidemic or endemic, the impact of inflation on consumer spending, fluctuations in food or packaging costs, or the timing of menu price increases or promotional activities and other marketing initiatives.
Seasonal factors, however, might be moderated or outweighed by other factors that may influence our quarterly results, such as unexpected publicity impacting our business in a positive or negative way, disease outbreak, epidemic or endemic, the impact of inflation and consumer sentiment on consumer spending, fluctuations in food or packaging costs, the timing of holidays, or the timing of menu price increases or promotional activities and other marketing initiatives.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion together with our consolidated financial statements and related notes included in Item 8. “Financial Statements and Supplementary Data.” This section of the Form 10-K generally discusses 2024 items and year-to-year comparisons of 2024 to 2023.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion together with our consolidated financial statements and related notes included in Item 8. “Financial Statements and Supplementary Data.” This section of the Form 10-K generally discusses 2025 items and year-to-year comparisons of 2025 to 2024.
Discussions of 2022 items and year-to-year comparisons of 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 on our Annual Report on Form 10-K for the year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons of 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 on our Annual Report on Form 10-K for the year ended December 31, 2024.
“Commitments and Contingencies” of our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” Cash Flows Cash provided by operating activities was $2.1 billion for the year ended December 31, 2024, compared to $1.8 billion for the year ended December 31, 2023.
“Commitments and Contingencies” of our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” Cash Flows Cash provided by operating activities was $2.1 billion for the year ended December 31, 2025, compared to $2.1 billion for the year ended December 31, 2024.
These decreases were partially offset by a 0.6% reduction in tax benefits related to option exercise and equity vesting. Quarterly Financial Data/Seasonality Seasonal factors cause our profitability to fluctuate from quarter to quarter.
These decreases were partially offset by a 0.4% reduction in tax benefits related to option exercises and equity vesting. Quarterly Financial Data/Seasonality Seasonal factors cause our profitability to fluctuate from quarter to quarter.
In 2024, we spent on average about $1.5 million in development and construction costs per new restaurant, or about $1.3 million net of landlord reimbursements of $0.2 million. In 2025, we expect to incur about $683.7 million in total capital expenditures.
In 2025, we spent on average about $1.5 million in development and construction costs per new restaurant, or about $1.3 million net of landlord reimbursements of $0.2 million. In 2026, we expect to incur about $834.1 million in total capital expenditures.
In addition, we generally have the right to pay for the purchase of food, beverages and supplies sometime after the receipt of those items, generally within ten days, thereby reducing the need for incremental working capital to support our growth. Our total capital expenditures for 2024 were $593.6 million.
In addition, we generally have the right to pay for the purchase of food, beverages and supplies sometime after the receipt of those items, generally within ten days, thereby reducing the need for incremental working capital to support our growth. Our total capital expenditures for 2025 were $666.3 million.
We expect approximately $502.7 million in capital expenditures related to our construction of new restaurants, before any reductions for landlord reimbursements. We expect the average investment cost for new restaurants opening in 2025 will be slightly higher than the average investment costs for those opened in 2024.
We expect approximately $531.8 million in capital expenditures related to our construction of new restaurants, before any reductions for landlord reimbursements. We expect the average investment cost for new restaurants opening in 2026 will be slightly higher than the average investment costs for those opened in 2025.
The estimated fair value of the asset is generally determined using the income approach to measure the fair value, which is based on the present value of estimated future cash flows. Key inputs to the income approach for restaurant assets include the discount rate, projected revenue and expenses, and sublease income if we are closing the restaurant.
The estimated fair value of the asset is generally determined using the income approach to measure the fair value, which is based on the present value of estimated future cash flows. Key inputs to the income approach for restaurant assets include the discount rate, projected revenue and expenses, and sublease income to the extent applicable.
W e believe these metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies: • Comparable restaurant sales • Food, beverage, and packaging as a percentage of total revenue • Labor as a percentage of total revenue • Occupancy as a percentage of total revenue • Other operating costs as a percentage of total revenue • New restaurant openings 2024 Financial Highlights, year-over-year: • Total revenue increased 14.6% to $11.3 billion • Comparable restaurant sales increased 7.4% • Diluted earnings per share was $1.11, a 24.7% increase from $0.89 Sales Trends.
W e believe these metrics are useful to investors because management uses these metrics to assess the growth of our business and the effectiveness of our marketing and operational strategies: • Comparable restaurant sales • Food, beverage, and packaging as a percentage of total revenue • Labor as a percentage of total revenue • Occupancy as a percentage of total revenue • Other operating costs as a percentage of total revenue • New restaurant openings 2025 Financial Highlights, year-over-year: • Total revenue increased 5.4% to $11.9 billion • Comparable restaurant sales decreased 1.7% • Diluted earnings per share was $1.14, a 2.7% increase from $1.11 Sales Trends.
Year ended December 31, 2024 2023 Beginning of period - - Licensed restaurant openings 3 - Total at end of period 3 - Results of Operations Our results of operations as a percentage of total revenue and period-over-period change are discussed in the following section.
Year ended December 31, 2025 2024 Beginning of period 3 - Openings 11 3 Total at end of period 14 3 Results of Operations Our results of operations as a percentage of total revenue and period-over-period change are discussed in the following section.
In addition to continuing to invest in our restaurant expansion, we expect to utilize cash flow from operations to: repurchase additional shares of our common stock subject to market conditions; invest in, maintain, and refurbish our existing restaurants; and for general corporate purposes.
In addition to continuing to invest in our restaurant expansion, we expect to utilize cash flow from operations to: repurchase additional shares of our common stock subject to market conditions; invest in, maintain, and refurbish our existing restaurants; and for general corporate purposes. As of December 31, 2025, $1.7 billion remained available for repurchases of shares of our common stock.
“Description of Business and Summary of Significant Accounting Policies” of our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data.” Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters.
“Financial Statements and Supplementary Data.” Critical accounting estimates are those that we believe are both significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters.
The majority of our income tax liability is incurred in the U.S. We establish reserves for uncertain tax positions for material, known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the measurement and recognition of the item.
We establish reserves for uncertain tax positions for material, known tax exposures relating to deductions, transactions and other matters involving some uncertainty as to the measurement and recognition of the item.
Overview As of December 31, 2024, we owned 3,644 Chipotle restaurants throughout the United States, and 82 international Chipotle restaurants. Additionally, we had three international licensed restaurants. We manage our U.S. operations based on ten regions and aggregate our operations to one reportable segment.
Overview As of December 31, 2025, we owned 3,938 Chipotle restaurants throughout the United States, and 104 international Chipotle restaurants. Additionally, we had 14 international partner-operated restaurants. We manage our U.S. operations based on 11 regions and aggregate our operations to one reportable segment.
Labor Costs Year ended December 31, Percentage 2024 2023 change (dollars in millions) Labor costs $ 2,789.8 $ 2,441.0 14.3% As a percentage of total revenue 24.7% 24.7% - % Labor costs remained flat as a percentage of total revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Labor Costs Year ended December 31, Percentage 2025 2024 change (dollars in millions) Labor costs $ 2,991.7 $ 2,789.8 7.2% As a percentage of total revenue 25.1% 24.7% 0.4 % Labor costs increased 0.4% as a percentage of total revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024.
We first compare the carrying value of the asset (or asset group, referred interchangeably throughout as asset) to the asset’s estimated future undiscounted cash flows.
The fair value measurement for asset impairment is generally based on Level 3 inputs. We first compare the carrying value of the asset (or asset group, referred interchangeably throughout as asset) to the asset’s estimated future undiscounted cash flows.
Borrowing Capacity As of December 31, 2024, we had $500.0 million of undrawn borrowing capacity under a line of credit facility. Use of Cash We believe that cash from operations, together with our cash and investment balances, will be sufficient to meet ongoing capital expenditures, working capital requirements and other cash needs for the foreseeable future.
Use of Cash We believe that cash from operations, together with our cash and investment balances, will be sufficient to meet ongoing capital expenditures, working capital requirements and other cash needs for the foreseeable future.
Year ended December 31, 2024 2023 Beginning of period 3,437 3,187 Chipotle openings 304 270 Non-Chipotle openings - 1 Chipotle permanent closures (7) (3) Chipotle relocations (8) (12) Non-Chipotle permanent closures - (6) Total at end of period 3,726 3,437 The following table details licensed restaurant unit data for the years indicated.
Year ended December 31, 2025 2024 Beginning of period 3,726 3,437 Openings 334 304 Permanent closures (13) (7) Relocations (5) (8) Total at end of period 4,042 3,726 The following table details partner-operated restaurant unit data for the years indicated.
Revenue Year ended December 31, Percentage 2024 2023 change (dollars in millions) Food and beverage revenue $ 11,247.4 $ 9,804.1 14.7% Delivery service revenue 66.5 67.5 (1.6 %) Total revenue $ 11,313.9 $ 9,871.6 14.6% Average restaurant sales (1) $ 3.213 $ 3.018 6.5% Comparable restaurant sales increase 7.4% 7.9% Transactions 5.3% 5.0% Average check 2.1% 2.9% Menu price increase 2.9% 5.2% Check mix (0.8 %) (2.3 %) (1) Average restaurant sales refers to the average trailing 12-month food and beverage revenue for restaurants in operation for at least 12 full calendar months. 27 Table of Contents The following is a summary of the change in restaurant sales for the period indicated: Year ended (dollars in millions) For the period ended December 31, 2023 $ 9,871.6 Change from: Comparable restaurant sales 695.4 Restaurants not yet in comparable base opened in 2024 290.4 Restaurants not yet in comparable base opened in 2023 453.7 Other 2.8 For the period ended December 31, 2024 $ 11,313.9 Food, Beverage and Packaging Costs Year ended December 31, Percentage 2024 2023 change (dollars in millions) Food, beverage and packaging $ 3,374.5 $ 2,912.6 15.9% As a percentage of total revenue 29.8% 29.5% 0.3 % Food, beverage and packaging costs increased 0.3% as a percentage of total revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Revenue Year ended December 31, Percentage 2025 2024 change (dollars in millions) Food and beverage revenue $ 11,866.1 $ 11,247.4 5.5% Delivery service revenue 59.6 66.5 (10.4 %) Total revenue $ 11,925.6 $ 11,313.9 5.4% Average restaurant sales (1) $ 3.104 $ 3.213 (3.4%) Comparable restaurant sales increase/(decrease) (1.7%) 7.4% Transactions (2.9%) 5.3% Average check 1.2% 2.1% Menu price increase 2.1% 2.9% Check mix (0.9 %) (0.8 %) (1) Average restaurant sales refers to the average trailing 12-month food and beverage revenue for company-owned restaurants in operation for at least 12 full calendar months. 25 Table of Contents The following is a summary of the change in restaurant sales for the period indicated: Year ended (dollars in millions) For the period ended December 31, 2024 $ 11,313.9 Change from: Comparable restaurant sales (191.3) Restaurants not yet in comparable base opened in 2025 327.0 Restaurants not yet in comparable base opened in 2024 481.8 Closures (31.6) Other (1) 25.8 For the period ended December 31, 2025 $ 11,925.6 (1) Other includes the impact of gift card breakage adjustments, as $20.1 million of additional gift card breakage revenue was recorded during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 years.
Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods up to a term of 20 years. If the estimate of our reasonably certain lease term was changed, our depreciation and rent expense could differ materially.
Comparable restaurant sales increased 7.4% for the year ended December 31, 2024. The increase is attributable to higher transactions of 5.3% and a 2.1% increase in average check. Comparable restaurant sales represent the change in period-over-period total revenue for restaurants in operation for at least 13 full calendar months. Digital sales represented 35.1% of total food and beverage revenue.
Comparable restaurant sales decreased 1.7% for the year ended December 31, 2025. The decrease is attributable to lower transactions of 2.9%, partially offset by a 1.2% increase in average check. Comparable restaurant sales represent the change in period-over-period total revenue for company-owned restaurants in operation for at least 13 full calendar months.
Provision for Income Taxes Year ended December 31, Percentage 2024 2023 change (dollars in millions) Provision for income taxes $ 476.1 $ 391.8 21.5% Effective income tax rate 23.7% 24.2% (0.5%) The effective income tax rate decreased 0.5% for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to lower nondeductible expenses of 0.6% and income tax reserves of 0.4%.
Treasury securities and money market funds and decreased interest income due to lower interest rates in the current year. 28 Table of Contents Provision for Income Taxes Year ended December 31, Percentage 2025 2024 change (dollars in millions) Provision for income taxes $ 473.8 $ 476.1 (0.5%) Effective income tax rate 23.6% 23.7% (0.1%) The effective income tax rate decreased 0.1% for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily due to increases in U.S. federal income tax credits of 0.3% and lower nondeductible expenses of 0.2%.
We have not required significant working capital because guests generally pay using cash or credit and debit cards and because our operations do not require significant receivables, nor do they require significant inventories due, in part, to our use of various fresh ingredients.
Assuming no significant declines in comparable restaurant sales, we expect we will generate positive cash flow for the foreseeable future. 29 Table of Contents We have not required significant working capital because guests generally pay using cash or credit and debit cards and because our operations do not require significant receivables or significant inventories, partly due to our use of various fresh ingredients.
The determination of asset fair value is also subject to significant judgment and utilizes valuation techniques including discounting estimated future cash flows and market-based analyses to determine fair value. If our estimates or underlying assumptions, including discount rate and sublease income change in the future, our operating results may be materially impacted.
The determination of asset fair value is also subject to significant judgment and utilizes valuation techniques including discounting estimated future cash flows and market-based analyses to determine fair value.
New restaurants typically have higher operating costs following opening because of the expenses associated with their opening and operating inefficiencies in the months immediately following opening.
New restaurants typically have higher operating costs following opening because of the expenses associated with their opening and operating inefficiencies in the months immediately following opening. Accordingly, results for a particular quarter are not necessarily indicative of results to be expected for any other quarter or for any year.
If we change our estimates of stock price volatility or expected lives of our SOSARs, or if we change our assumptions regarding the probability of achieving future levels of performance with respect to performance share awards, our stock-based compensation expense and results of operations may be materially impacted. 33 Table of Contents Income Taxes Our provision for income taxes, deferred tax assets and liabilities and any related valuation allowance requires the use of estimates based on our management’s interpretation and application of complex tax laws and accounting guidance.
If we change our estimates of stock price volatility or expected lives of our SOSARs, or if we change our assumptions regarding the probability of achieving future levels of performance with respect to PSUs, our stock-based compensation expense and results of operations may be materially impacted.
We determine the probability of achievement of future levels of performance by comparing the relevant performance level with our internal estimates of future performance.
Similarly, the compensation expense of PSUs is based in part on the estimated probability of achieving levels of performance associated with particular levels of payout for PSUs. We determine the probability of achievement of future levels of performance by comparing the relevant performance level with our internal estimates of future performance.
Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.
If the estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
If the estimate of our reasonably certain lease term was changed, our depreciation and rent expense could differ materially. 32 Table of Contents Operating lease assets and liabilities are recognized at the lease commencement date, which is the date we control the use of the property. Operating lease liabilities represent the present value of lease payments not yet paid.
Operating lease assets and liabilities are recognized at the lease commencement date, which is the date we control the use of the property. Operating lease liabilities represent the present value of lease payments not yet paid. We made the policy election to combine lease and non-lease components.
We expect approximately $149.0 million in capital expenditures related to investments in existing restaurants including remodeling and similar improvements, new equipment and hardware, and technology to optimize efficiencies.
We expect approximately $266.9 million in capital expenditures related to investments in existing restaurants including remodeling and similar improvements, new equipment and hardware, and technology to optimize efficiencies. Finally, we expect a portion of our incurred capital expenditures to be for additional corporate initiatives including investments in technology to boost innovation, enhance the guest experience, and improve operations.
We made the policy election to combine lease and non-lease components. We consider fixed common area maintenance (“CAM”) part of our fixed future lease payments; therefore, fixed CAM is also included in our operating lease liability.
We consider fixed common area maintenance (“CAM”) part of our fixed future lease payments; therefore, fixed CAM is also included in our operating lease liability. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for initial direct costs, lease incentives, and impairment of operating lease assets.
Occupancy Costs Year ended December 31, Percentage 2024 2023 change (dollars in millions) Occupancy costs $ 563.4 $ 503.3 11.9% As a percentage of total revenue 5.0% 5.1% (0.1 %) Occupancy costs decreased 0.1% as a percentage of total revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to 0.3% of sales leverage partially offset by 0.2% of increased occupancy expense, of which 0.1% was associated with existing restaurants and 0.1% was associated with new restaurants. 28 Table of Contents Other Operating Costs Year ended December 31, Percentage 2024 2023 change (dollars in millions) Other operating costs $ 1,568.5 $ 1,428.7 9.8% As a percentage of total revenue 13.9% 14.5% (0.6 %) Other operating costs decreased 0.6% as a percentage of total revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to 0.5% of sales leverage and 0.2% of lower delivery expenses.
Other Operating Costs Year ended December 31, Percentage 2025 2024 change (dollars in millions) Other operating costs $ 1,755.8 $ 1,568.5 11.9% As a percentage of total revenue 14.7% 13.9% 0.8 % Other operating costs increased 0.8% as a percentage of total revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024.
For restaurant assets, we test impairment at the individual restaurant asset group level, which includes leasehold improvements, property and equipment and operating lease assets. The fair value measurement for asset impairment is generally based on Level 3 inputs.
Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. For restaurant assets, we test impairment at the individual restaurant asset group level, which includes leasehold improvements, property and equipment and operating lease assets.
For 2025, management is anticipating comparable restaurant sales growth in the low to mid-single digit range. Restaurant Development. During the year ended December 31, 2024, we opened 304 restaurants, which included 257 restaurants with a Chipotlane. We expect to open approximately 315 to 345 company-owned restaurants in 2025.
Digital sales represented 36.7% of total food and beverage revenue. For 2026, management is anticipating comparable restaurant sales to be about flat. Restaurant Development. During the year ended December 31, 2025, we opened 334 company-owned restaurants, which included 257 restaurants with a Chipotlane.
As we have no outstanding debt nor committed credit facilities, secured or otherwise, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. If the estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially.
To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. As we have no outstanding debt, we estimate this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment.
We use the Black-Scholes valuation model to determine the fair value of our SOSARs, and we use the Monte Carlo simulation model to determine the fair value of PSUs that contain market conditions. Both of these models require assumptions to be made regarding our stock price volatility, the expected life of the award and expected dividend rates.
Both of these models require assumptions to be made regarding our stock price volatility, the expected life of the award and expected dividend rates. The volatility and the expected life assumptions are based on our historical data.
The change was primarily associated with a $121.2 million decrease in investment purchases net of investment maturities. This was partially offset by increased capital expenditures of $32.9 million primarily related to costs associated with new restaurant development.
This was partially offset by increased capital expenditures of $72.7 million primarily related to costs associated with new restaurant development. Cash used in financing activities was $2.5 billion for the year ended December 31, 2025, compared to $1.1 billion for the year ended December 31, 2024.
Finally, we expect a portion of our incurred capital expenditures to be for additional corporate initiatives including investments in technology to boost innovation, enhance the guest experience, and improve operations. 31 Table of Contents The following table summarizes current and long-term material cash requirements as of December 31, 2024, which we expect to fund primarily with operating cash flows: Payments Due by Fiscal Year Total 2025 2026-2027 2028-2029 Thereafter (dollars in millions) Operating leases (1) $ 7,204 $ 502 $ 1,089 $ 1,036 $ 4,577 Purchase obligations (2) 2,289 1,161 766 362 - Total $ 9,493 $ 1,663 $ 1,855 $ 1,398 $ 4,577 (1) See Note 9.
The following table summarizes current and long-term material cash requirements as of December 31, 2025, which we expect to fund primarily with operating cash flows: Payments Due by Fiscal Year Total 2026 2027-2028 2029-2030 Thereafter (dollars in millions) Operating leases (1) $ 8,309 $ 569 $ 1,228 $ 1,157 $ 5,355 Purchase obligations (2) 1,887 1,135 701 34 17 Total $ 10,196 $ 1,704 $ 1,929 $ 1,191 $ 5,372 (1) See Note 9.
As of December 31, 2024, $1.0 billion remained available for repurchases of shares of our common stock, which includes the $300.0 million additional authorization approved by our Board of Directors on December 17, 2024. Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions.
Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions. Borrowing Capacity As of December 31, 2025, we had $500.0 million of undrawn borrowing capacity under a revolving credit facility.
Cash used in financing activities was $1.1 billion for the year ended December 31, 2024, compared to $660.7 million for the year ended December 31, 2023. The change was primarily due to increased repurchases of common stock of $409.2 million. Critical Accounting Estimates We describe our significant accounting policies in Note 1.
The change was primarily due to increased repurchases of common stock of $1.4 billion. 30 Table of Contents Critical Accounting Estimates We describe our significant accounting policies in Note 1. “Description of Business and Summary of Significant Accounting Policies” of our consolidated financial statements included in Item 8.
As of December 31, 2024, we have made $63.0 million in investments through this Fund. 26 Table of Contents Restaurant Activity The following table details company-owned restaurant unit data for the years indicated.
During the year ended December 31, 2025, 11 partner-operated restaurants were opened in the Middle East. 24 Table of Contents Restaurant Activity The following table details company-owned restaurant unit data for the years indicated.
The increase was primarily due to higher net earnings and, to a lesser extent, net cash changes in operating assets and liabilities. Cash used in investing activities was $837.5 million for the year ended December 31, 2024, compared to $946.0 million for the year ended December 31, 2023.
Cash used in investing activities was $35.1 million for the year ended December 31, 2025, compared to $837.5 million for the year ended December 31, 2024. The change was primarily associated with an $895.3 million decrease in investment purchases net of investment maturities.
Stock-based Compensation We recognize compensation expense for equity awards over the requisite service period based on the award’s fair value. Under our stock incentive plans, we issue stock-only stock appreciation rights ("SOSARs"), restricted stock units ("RSUs"), and performance stock units ("PSUs").
Under our stock incentive plans, we issue stock-only stock appreciation rights ("SOSARs"), restricted stock units ("RSUs"), and performance stock units ("PSUs"). We use the Black-Scholes valuation model to determine the fair value of our SOSARs, and we use a Monte Carlo simulation model to determine the fair value of PSUs that contain market conditions.
Accordingly, results for a particular quarter are not necessarily indicative of results to be expected for any other quarter or for any year. 30 Table of Contents Liquidity and Capital Resources Cash and Investments As of December 31, 2024, we had a cash and marketable investments balance of $2.2 billion, non-marketable investments of $85.2 million, and $29.8 million of restricted cash.
Liquidity and Capital Resources Cash and Investments As of December 31, 2025, we had a cash and marketable investments balance of $1.1 billion, non-marketable investments of $106.0 million, and $35.4 million of restricted cash.
The increase was due to higher usage of ingredients as we focused on ensuring consistent and generous portions, inflation across several ingredient costs, primarily avocados, and a protein mix shift from the Smoked Brisket limited time offering and a Braised Beef Barbacoa marketing initiative. This increase was partially offset by a 1.0% benefit from menu price increases.
The increase was due to the impact from several items, primarily 0.5% of higher marketing and promotional activities, 0.2% of lower sales volumes, and 0.2% of inflation in natural gas and electricity. This increase was partially offset by a 0.2% benefit from menu price increases.
Removed
We expect that at least 80% of our new company-owned restaurants will include a Chipotlane. Licensing . During the year ended December 31, 2024, three licensed restaurants were opened in the Middle East. Cultivate Next Fund .
Added
We expect to open approximately 350 to 370 restaurants in 2026, which includes 10 to 15 international partner-operated restaurants. We expect around 80% of our new company-owned restaurants will include a Chipotlane. Partner-Operated Restaurants .
Removed
Our Cultivate Next Fund is a venture formed to make early-stage investments into strategically aligned companies that further our purpose to Cultivate a Better World. The Fund is authorized to invest up to $100.0 million, which is financed almost entirely by Chipotle.
Added
Food, Beverage and Packaging Costs Year ended December 31, Percentage 2025 2024 change (dollars in millions) Food, beverage and packaging $ 3,527.0 $ 3,374.5 4.5% As a percentage of total revenue 29.6% 29.8% (0.2 %) Food, beverage and packaging costs decreased 0.2% as a percentage of total revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Removed
The 1.1% benefit from sales leverage was mostly offset by 0.9% due to restaurant wage inflation, of which 0.4% was due to minimum wage increases for our restaurants in California.
Added
The decrease was primarily due to a 0.6% benefit from menu price increases and, to a lesser extent, cost of sales efficiencies. These decreases were partially offset by 0.4% of inflation, primarily beef and chicken, and a 0.2% impact from tariffs enacted in 2025.
Removed
Treasury securities, money market funds and time deposits.
Added
We estimate that the tariffs enacted in 2025 will impact food, beverage and packaging costs by about 15 basis points on an ongoing basis. These estimates could vary based on future tariff policy changes.
Removed
Assuming no significant declines in comparable restaurant sales, we expect we will generate positive cash flow for the foreseeable future.
Added
The increase was primarily due to a 0.7% impact from lower sales volumes and 0.4% from restaurant wage inflation.
Removed
Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term.
Added
This increase is partially offset by a 0.5% benefit from menu price increases. 26 Table of Contents Occupancy Costs Year ended December 31, Percentage 2025 2024 change (dollars in millions) Occupancy costs $ 624.9 $ 563.4 10.9% As a percentage of total revenue 5.2% 5.0% 0.2 % Occupancy costs increased 0.2% as a percentage of total revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Removed
The volatility and the expected life assumptions are based on our historical data. Similarly, the compensation expense of performance share awards is based in part on the estimated probability of achieving levels of performance associated with particular levels of payout for performance shares.
Added
The increase was due to the impact from lower sales volumes, as a 0.1% benefit from menu price increases was offset by expenses associated with new restaurants.
Added
Increased depreciation expense associated with existing restaurants and the impact from lower sales volumes was offset by the benefit of menu price increases.
Added
Interest and Other Income, Net Year ended December 31, Percentage 2025 2024 change (dollars in millions) Interest and other income, net $ 73.7 $ 93.9 (21.5%) As a percentage of total revenue 0.6% 0.8% (0.2%) Interest and other income, net decreased in dollar terms for the year ended December 31, 2025 compared to the year ended December 31, 2024 , primarily due to lower investment balances in U.S.
Added
The balance was flat as an increase in operating cash flows due to the timing of tax-related payments, including the impacts of H.R.1 - One Big Beautiful Bill Act, was offset by other changes in non-tax operating assets and liabilities.
Added
If our estimates or underlying assumptions, including discount rate and sublease income change in the future, our operating results may be materially impacted. 31 Table of Contents Stock-based Compensation We recognize compensation expense for equity awards over the requisite service period based on the award’s fair value.
Added
Income Taxes Our provision for income taxes, deferred tax assets and liabilities and any related valuation allowance requires the use of estimates based on our management’s interpretation and application of complex tax laws and accounting guidance. The majority of our income tax liability is incurred in the U.S.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−0 removed2 unchanged
Biggest changeAs of December 31, 2024, we had $2.3 billion in cash and cash equivalents, current and long-term investments, and restricted cash, of which the substantial majority are interest bearing. Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations.
Biggest changeChanging Interest Rates We are exposed to interest rate risk through interest rate fluctuations on our investments. As of December 31, 2025, we had $1.3 billion in cash and cash equivalents, current and long-term investments, and restricted cash, of which the substantial majority are interest bearing.
We work closely with our suppliers and use a mix of forward pricing protocols under which we agree with our supplier on fixed prices for deliveries at some time in the future, fixed pricing protocols under which we agree on a fixed price with our supplier for the duration of that protocol, formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices or based on changes in industry indices, and range forward protocols under which we agree on a price range for the duration of that protocol.
We work closely with our suppliers and use a mix of forward pricing protocols under which we agree with our supplier on fixed prices for deliveries at some time in the future, fixed pricing protocols under which we agree on a fixed price with our supplier for the duration of that protocol, formula pricing protocols under which the prices we pay are based on a specified formula related to the prices of the goods, such as spot prices in industry indices, and range forward protocols under which we agree on a price range for the duration of that protocol.
Generally, our pricing protocols with suppliers can remain in effect for periods ranging from one to 24 months, depending on the outlook for prices of the particular ingredient. In some cases, we have minimum purchase obligations.
Generally, our pricing protocols with suppliers can remain in effect for periods ranging from one to 24 months, depending on the outlook for prices of the particular ingredient. In some cases, we agree to minimum purchase obligations.
However, a substantial majority of our operations and investment activities are transacted in the U.S., and therefore our foreign currency risk is not material at this date. 34 Table of Contents
However, a substantial majority of our operations and investment activities are transacted in the U.S., and therefore our foreign currency risk is not material at this date. 33 Table of Contents
We have tried to increase the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility and supply continuity risks, and we follow industry news, trade tariffs, exchange rates, foreign demand, weather, geopolitical crises and other world events that may affect our ingredient prices.
We work to diversify the number of suppliers and geographic locations for our ingredients, packaging, equipment, construction and utilities, which we believe can help mitigate pricing volatility and supply continuity risks, and we monitor industry news, trade tariffs, exchange rates, foreign demand, weather, geopolitical crises and other world events that may affect our ingredient prices.
Foreign Currency Exchange Risk A portion of our operations consist of activities outside of the U.S. and we have currency risk on the transactions in other currencies and translation adjustments resulting from the conversion of our international financial results into the U.S. dollar.
Changes in interest rates affect the interest income we earn, and therefore impact our cash flows and results of operations. 32 Table of Contents Foreign Currency Exchange Risk A portion of our operations consist of activities outside of the U.S. and we have currency risk on the transactions in other currencies and translation adjustments resulting from the conversion of our international financial results into the U.S. dollar.
We also could experience shortages of key ingredients for many unforeseen reasons, such as crop damage due to inclement weather, if our suppliers need to close or restrict operations, or due to industry-wide shipping and freight delays. Changing Interest Rates We are exposed to interest rate risk through fluctuations of interest rates on our investments.
We also could experience shortages of key ingredients for many unforeseen reasons, such as crop damage due to natural disasters or inclement weather, if our suppliers decide to close, restrict operations or divert supply to other sales channels, or due to industry-wide shipping and freight delays.
Many of the ingredients we use to prepare our food, as well as our packaging materials and utilities to run our restaurants, are ingredients or commodities that are affected by the price of other commodities, exchange rates, foreign demand, weather, seasonality, production, availability and other factors outside our control.
The prices of many of the ingredients we use to prepare our food, as well as our packaging materials, kitchen equipment, construction material and utilities to run our restaurants, are affected by the price of other commodities, exchange rates, trade tariffs, limited sources, geopolitical conflict, animal disease outbreaks, weather, natural disaster, seasonality, availability, and other factors outside our control.

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