Steve Ells never meant to build a burrito empire.
The CEO of Chipotle Mexican Grill was working as a chef in San Francisco and trying to find a way to fund his own fine-dining restaurant. So, he decided to open up a small burrito shop in Colorado, a low-risk investment, that could provide the capital for the restaurant he really wanted to run.
"This was going to be one restaurant," Ells said on NPR's "How I Built This" podcast in October. "And this was going to be a cash cow that could fund and help support a full-scale restaurant. You know, I knew that full-scale restaurants were a dicey proposition. I mean, they go out of business often. It's hard to make margins, very difficult to operate. And so I wanted Chipotle to be a backup."
Ells admits that he had never taken a business course before seeking to finance his new venture. At 28, he asked his father for a loan of more than $80,000.
"There was no business plan," he said on the podcast. "I was just making this up as I went along."
Chipotle's original concept was modeled on burrito shops and taquerias that Ells ate at while working at Stars restaurant in San Francisco.
While the Mission District in San Francisco was filled with these shops Colorado wasn't. Ells opened up his first location in Denver in July 1993 after remodeling an ice cream store near the University of Denver campus, Ells said in a promotional video.
"I think the sales the first day were probably $240 or something like that, and the next day, a little bit more, and the next day, a little bit more," Ells told NPR. "And we sort of, we got faster and more efficient. And word spread pretty quickly. And students got back to campus in September. And so that helped business a little bit."
Within the first few months of being open, Ells said that the restaurant was profitable and he was able to repay his father's loan. While Ells was still keen on opening his full-service restaurant, the demand at Chipotle continued to grow and a year and a half after opening his first restaurant, he opened a second one in Denver.
"Chipotle was wildly successful and I thought, 'well, let me open one more,'" Ells said in a video posted on Chipotle's YouTube page.
A third location, also in Denver, was opened in 1996. By 2017, Chipotle would have nearly 2,300 locations.
Ells continued to open new restaurants, using capital, at first, from his father and small business loans. In 1998, McDonald's became an investor in Chipotle. Over the course of about seven years, the Golden Arches poured more than $360 million into the company, allowing Ells to expand further.
By 2001, McDonald's was the majority shareholder. However, in 2006, when Chipotle geared up for its initial public offering, McDonald's divested. This move was part of the burger giant's larger effort to distance itself from all non-core business restaurants, including Boston Market. By that time, McDonald's investment had grown to $1.5 billion.
Chipotle went public in January 2006, opening at $45 and closing at $44 on its first day of trading, double its initial public offering price of $22 at the New York Stock Exchange.
Shares of the company, which rose to a high near $150 in mid-2007, slipped in 2008, to a low of $36.86, according to FactSet data. The fall was due, in part, to the 2008 recession, which slowed consumer spending at restaurants.
The following year, the company restructured its executive team, promoting Chief Operating Officer Monty Moran as co-CEO alongside Ells. Combining Moran's operational experience and Ells entrepreneurial spirit helped bolster Chipotle for nearly a decade.
Investor expectations soared, but sales began to slow, and the stock stumbled in 2012. In a bid to reinvigorate growth, Chipotle began ShopHouse, an Asian-inspired chain, which once again excited investors. (ShopHouse eventually would be scrapped but Chipotle also has tested the waters for a pizza business, Pizzeria Locale, and burgers, called Tasty Made.)
Shares of Ells' company skyrocketed to an all-time high of $758.61 in August 2015, but would be crippled in the months that followed. That October, officials linked Chipotle to an E. coli outbreak that sickened more than 52 people in multiple states.
Then, in December, the Boston Public Health Commission determined that at least 65 people, including Boston College students and basketball players, had symptoms consistent with norovirus, which they linked to a Boston-area Chipotle.
The fallout hammered Chipotle's comparable-restaurant sales and share price, and damaged its reputation.
Despite efforts by Chipotle and the Centers for Disease Control, it is unknown exactly what caused the E. coli outbreak, although some suspected it was either tainted beef or improperly handled vegetables. As for the norovirus outbreak, it was speculated that either an employee at Chipotle or a patron spread the sickness.
The Colorado-based restaurant chain began testing initiatives to lure customers back to its locations, including reformulating its food safety protocols, altering its employee sick leave policy and plying customers with free burritos.
Prior to these incidents, Ells and Moran were already under fire for their high compensation packages, with the pair making nearly $50 million combined in 2014. This scrutiny only continued in the wake of the outbreaks, as the stock plummeted.
In September 2016, Bill Ackman's Pershing Square took a 9.9 percent stake in the beleaguered burrito chain, instilling hope in investors that changes could be coming to the board and Chipotle's strategy.
And changes came in December 2016. Ells resumed full leadership of Chipotle, with Moran retiring from the company and vacating his board seat.
In addition, Chipotle named four new members to its board, including two aligned with Pershing Square. These newly minted board members brought decades of experience in the restaurant industry and acted as a balm for investors. At least, in the short term.
However, with its image tarnished, any new stumble, from another food safety incident to a payment system breach, become another reason for a selloff.
Meanwhile, Chipotle has tried to build back a loyal following. It refreshed its advertising and rolled out new items and promised more were on the way. But investors, clearly frustrated by the fits and starts of the plan's results, pressured for more change. On Wednesday, the burrito chain said that it's begun to search for a new chief executive, with Ells stepping down from the post.
Chipotle shares closed up nearly 6 percent on the news, just under $302.
And the entrepreneur, who never intended to build a nationwide chain of Mexican restaurants, will remain with the company as its executive chairman and plans to oversee innovation once a new CEO is selected.