Although, the business concept of Chipotle is valuable and transferable, also may generate a large pool of potential franchisees, Chipotle did not ever consider franchising. The reasons are that Chipotle has enough money to operate the company-owned restaurants, it does not want to loss control over its restaurant operations, and it wants to keep the promise to offer organic food resources. Most companies who choose to franchise is because that they would like to grow their business quickly without financial and human resource constraints. Chipotle believes that they do not need to franchise because they have plenty of money to grow and operation the business. According to an article on Business Insider, Chipotle spokesperson Chris Arnold said …show more content…
As Peterson mentions on Business Insider, Chipotle always watch closely to the assembly line and queues in their restaurants in order to make sure the employees are doing their assigned jobs. Chipotle believes that it can generate a great profit from its strong business model. However, if franchisees bought the model from Chipotle and run the business without the total control of Chipotle, they may not generate as much profit as Chipotle itself does. Lastly, the most significant thing that Chipotle promised to the public is that it will always offer organic meat and fresh vegetables to the customers. In order to maintain an excellent food sourcing, Chipotle spends a larger amount of money on food intergradient than any other restaurants in the same industry. If Chipotle do franchise, the franchisees may tend to reduce the cost in order to maximize the profit. So that, the threat of free riding on food quality is high in this situation of Chipotle. Unlike Chipotle, which gives public a first impression of healthy, Taco Bell is just a regular Mexican-style fast food brand. Since Taco Bell does not have as much concerns as Chipotle does, so Taco Bell follows the rule that other popular fast-food restaurant did to franchise its