McDonald's Missed Fortune: How Selling Chipotle Left Billions On The Table
McDonald's significant investment in Chipotle in the late 1990s has been widely reported, but the extent of its involvement and subsequent decision to sell shares is often overlooked. The fast food giant invested $50 million into Chipotle in 1998 and owned roughly 90% of the chain at one point. Over eight years, McDonald's spent an additional $340 million on the company.
Despite Chipotle's success under McDonald's guidance, with its store count growing from a dozen to over 500 locations, the two companies ultimately parted ways in 2006 when Chipotle went public. The initial public offering valued the company at over $700 million, but McDonald's had already begun selling its shares.
Today, Chipotle's market capitalization stands at over $47 billion, making it clear that McDonald's decision to sell its shares was a missed opportunity for the company. According to Chris Arnold, Chipotle's communications director, the split between the two companies was due in part to fundamental differences in their business philosophies.