CHIPOTLE MEXICAN GRILL INC (CMG) Business

ITEM 1. BUSINESS

General

Chipotle Mexican Grill, Inc., a Delaware corporation, together with its subsidiaries (“Chipotle,” “we,” “us,” or “our”) owns and operates Chipotle Mexican Grill restaurants, which feature a relevant menu of burritos, burrito bowls (a burrito without the tortilla), quesadillas, tacos, and salads. We strive to cultivate a better world by serving responsibly sourced, classically cooked, real food with wholesome ingredients and without artificial colors, flavors or preservatives. We are passionate about providing a great guest experience and making our food more accessible to everyone while continuing to be a brand with a demonstrated purpose. Our first Chipotle restaurant opened in Denver, Colorado in 1993. Over 30 years later, our devotion to seeking out high-quality ingredients, raised with respect for animals, farmers, and the environment, remains at the core of our commitment to Food with Integrity.

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. 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.

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. 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.

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. We brand our meats as “Responsibly Raised®.” We also seek to use responsibly grown produce, by which we mean produce grown by suppliers whose practices conform to our Food with Integrity standards and our priorities with respect to environmental considerations and employee welfare. For more information about our sustainability and animal welfare initiatives, see our biennial Sustainability Report and interim Update Report on our website www.chipotle.com/sustainability.

Purchasing

Maintaining the high levels of quality and safety we demand in our restaurants depends in part on our ability to acquire high-quality, fresh ingredients and other necessary supplies that meet our specifications from reliable suppliers. 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. We have also sought to increase the number of suppliers for our ingredients to help mitigate pricing volatility and reduce our reliance on one or several suppliers, which could create supply shortages. 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.

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Quality Assurance and Food Safety

We are committed to serving only safe, high-quality food. 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.

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. 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. 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. The Food Safety Advisory Council is charged with evaluating our programs and advising us on ways to maintain and elevate our food safety program. 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. 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. We have made digital ordering convenient with continued enhancements to our app and by building more Chipotlanes, which is our drive through format for guest pick-up of digital orders. We are also investing in technology and tools to modernize the back of house of our restaurants and to improve the team member experience.

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. 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. In 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.

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. 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. This tool is intended to broaden access and streamline hiring, enabling managers to focus on operations and our guest experience.

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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. 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.

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.

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.

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%. 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. 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. 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. 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. 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.

Collectively, these initiatives strengthen leadership capability, improve employee engagement, and position the organization for sustained operational excellence and long-term growth.

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Total Rewards

The financial, physical, and mental well-being of our employees remains a top priority. 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. 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. 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.

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. 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. 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.

Government Regulation and Environmental Matters

We are subject to various federal, state and local laws and regulations that govern aspects of our business operations. While costs associated with compliance with laws and regulations have increased as the number and scope of regulations have increased, the total costs incurred have not had, and are not expected to have, a material effect on our capital expenditures, results of operations or competitive position. 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. “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. Our competition includes a variety of restaurants in each of these segments, including locally-owned restaurants, as well as national and regional chains. Competition from food delivery services, which offer meals from a wide variety of restaurants, also has increased in recent years and is expected to continue to increase. 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.

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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. In addition to our U.S. registrations, we have registered trademarks for “Chipotle” and a number of other marks in Canada, the European Union, the Middle East and various other countries, and have filed trademark applications for “Chipotle Mexican Grill,” “Chipotle” and a number of other marks in additional countries. We also believe that the design of our restaurants is our proprietary trade dress and have registered elements of our restaurant design for trade dress protection in the U.S. as well.

From time to time, we have taken action against other restaurants that we believe are misappropriating our trademarks, restaurant designs or advertising. Although our policy is to protect and defend vigorously our rights to our intellectual property, we may not be able to adequately protect our intellectual property, which could harm the value of our brand and adversely affect our business.

Available Information

We maintain a website at www.chipotle.com, including an investor relations section at ir.chipotle.com, on which we routinely post important information, such as webcasts of quarterly earnings calls and other investor events in which we participate or host, and any related materials. Our Code of Ethics and our Supplier Code of Conduct also are available in this section of our website. You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as well as other reports relating to us that are filed with or furnished to the SEC, free of charge in the investor relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The contents of the websites mentioned above and elsewhere in this report are not incorporated into and should not be considered a part of this report. The references to the URLs for these websites are intended to be inactive textual references only.