Success Story: Chipotle Mexican Grill
Even A Gourmet Burrito Joint Can Use Great Legal Advice.
One day, back in the early 90’s, Steve Ells invited a friend to come over to his home to sample a new burrito recipe. After tasting the creation his friend immediately said, “You ought to sell these things.”
Well, in 1993, Steve Ells took his innovative recipes and opened what he referred to as his “tiny burrito joint” in Denver. He served a simple menu of great food prepared fresh each day, using many of the same cooking techniques as gourmet restaurants, and in a cool atmosphere. He named his little establishment Chipotle Mexican Grill.
Soon, customers were forming lines out the door for burritos advertised as “the size of speed bumps,”and were demanding more Chipotle locations.
By 1997, Steve was once again asking for help, but this time it wasn’t to test the food. With five stores up and running, Chipotle found itself poised for expansion and its leader needed sound business and legal advice to help him do it right. Ells turned to the team at Messner Reeves in downtown Denver. Very quickly, the entrepreneurial law firm recognized an opportunity – a unique restaurant model, serving great food that everyone seems to want to eat. They said, “Hey, let’s see what we can do for Chipotle.”
Turned out, there was quite a lot to do. There were real estate purchases and leases to negotiate, management contracts and compensation packages to create, corporate governance and employee standards to write, and, of course,lots of burrito dinners.
That’s right, Messner Reeves realized that a company the small size of Chipotle needed high quality legal services, but couldn’t afford to pay a retainer the size of one of their blimp-sized burritos. With a little creative fee structuring, aimed at establishing a long-term affiliation between burrito king and legal counsel, Messner Reeves earned its way to become Chipotle’s law firm of record, handling everything from general counsel duties to individual transactions.
It was the start of a very profitable relationship. Today, hungry customers can sit down in one of over 2000 locations both in the United States and internationally and enjoy the unique cuisine.
In 1998, Chipotle Mexican Grill was majority purchased by McDonald’s. The new owners considered bringing the job of handling the company’s increasing legal responsibilities into McDonald’s sizable in-house department. But it became obvious, even to one of the world’s largest corporations, that Messner Reeves had a relationship with Chipotle that was too valuable to break up. “We won because we give great service at great rates and produce great value,” said founding partner Bryant “Corky” Messner.
On January 26, 2006, when the bell to open trading at the New York Stock Exchange, Chipotle Mexican Grill was now a publicly traded entity. Messner Reeves had invested an estimated 6,000 hours managing the complex legal strategies surrounding the Initial Public Offering, all the while administering the company’s day-to-day law responsibilities.
“We’re in a unique position with Chipotle for two reasons,” said Messner. “On the one hand, we have this history with them - we’re very close to everything they’re doing. But on the other hand, we’re outside. That is to say, we have an objective perspective on their business needs, their priorities and their business goals. It’s easy for us to be impartial and honest but highly effective with the advice we give.
“We’re good to them and they’re good to us. We have an open book with them. They know they’re getting a lot of value from our work. Plus, I know they value our judgment.” And, that’s the kind of efficient, tailor-made service that Messner Reeves brings to its clients of all sizes.
Even if you don’t make burritos the size of speed bumps.