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Thursday, July 20, 2017

Chipotle: Point of No Return

Let's face it. Bad things happen. When it comes to companies, sometimes they have the ability to clear their name, and sometimes it just ain't happenin'. I am reminded of Sizzler back in the day which all but collapsed after an e. coli outbreak in a restaurant. And there was Jack in the Box which had to change its name for a while to Monterey Jacks because of a similar incident. Sizzler really never recovered. Jack in the Box however, is still operating today and eventually did lose the Monterey Jack moniker.

BP suffered blows after a major oil rig disaster. United has had its fair share of incidents. Volkswagon got itself into some trouble, and back some time ago Toyota lost some faith of its customers due to its acceleration problem.

All of them have, or will recover.

Chipotle, however, I do not believe will not have this opportunity. For the first thing, Chipotle sold itself on fresh, organic and quality which was really its brand. It is exactly what was supposed to separate its brand of quick serve from the rest of the guys. When your brand is healthy and fresh, and people get sick, not once, but twice...

That is not going to leave customers feeling too great about entering your store anytime soon. When is the last time someone got sick after eating a grease laden burger at McDonald's? Although, while Taco Bell will not make you sick, it certainly could be advertised as a quick serve laxative to be sure.

But that is an entirely different thing.

You have two incidents whereas customers have gotten sick eating at Chipotle restaurants. You have admissions from the CEO after the first string of incidents that the company was lax in its quality standards and monitoring, and was going to revamp its business by retraining employees on quality standards and good manufacturing and sanitation practices.

But now that seems to be for naught because people got sick again. And now you have reports of rodents dropping from the ceilings which in and of itself will cause more than one potential Chipotle customer to squirm.

What exactly made me sick? Could it be rodents urinating and defecating into my food? What exactly is going on behind the scenes at my Chipotle restuarant? What are the employees missing?

Truth is, being a former pest control technician, rodents and other insects like roaches are actually commonplace in food establishments. But, that's what the pest control specialists are there for. To educate staff and to control the population of pests in the establishment.

More often than not, when pest control technicians had difficulty controlling rodent and insect populations in restaurants, it was primarily due to a lack of willingness on the part of management and other staff to do their due dilligence when it came to good manufacturing practices, and especially when it came to sanitation practices.

So if rodents are falling out of the ceilings or even running rampant in the store, something is seriously wrong with everything going on in the back while your food is being prepared, and God knows what is exactly going into your burrito.

For me there is only one outcome here. The company will be filing for bankruptcy sometime in the near future. The trouble is this is two and three incidents, and customers will be weary about entering their stores anytime soon.

The stock is dropping. Customer traffic will fall dramatically. The coupled effect of this will be a downward spiral too quick and too steep for the company to be able to effectively manage.

Will Chipotle be a name that gets tossed into the garbage can? In this particular instance I think so. I think Chipotle is dead as a company.


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