It Turns Out McDonald's Used To Own Most Of Chipotle

If you're reading this, you've likely eaten at Chipotle at least once. A choose-your-own burrito place with a standardized, mass-produced (yet still extremely tasty) menu, it's both the cheapest and most convenient place for people to get quality burritos in much of the country. More than anything else, Chipotle is just reliable; you never really get a bad meal there (although you might be more bloated than a hot air balloon afterwards).

But did you know that the first name in fast-food burritos was once owned by another, much larger corporation? Incredibly, Chipotle was once an almost-total subsidiary of the single biggest name in fast food: McDonald's. The home of the Grimace shake largely took over Chipotle, made it huge, and then dumped it at the worst (or best, if you're Chipotle) possible time. 

The story of why Mickey D's is no longer in the burrito game is a baffling example of corporate miscalculation, and it's safe to say it's a move McDonald's regrets.

Chipotle didn't start out as a subsidiary of McDonald's, but the larger company got into the game early. The first Chipotle Mexican Grill was opened in 1993 by Steve Ells in Denver, Colorado. Five years later, with the burgeoning company at 14 locations, McDonald's got in on the game, investing heavily enough to boost the chain to 500 total locations across the country by 2005. With the Golden Arches holding a 90% stake in the company, it seemed like McDonald's was in it for the long haul.

Then just a year later, the company divested from Chipotle completely. Was this the result of declining sales, a clear bubble that indicated Chipotle's time had come? Nope; the brand was doing just fine. McDonald's simply decided it wanted to focus more on its core brand — you know, the one that wasn't doing nearly as well as Chipotle.

This wasn't the only brand from which McDonald's divested — they also got out on Donato's Pizza and Boston Market — but it Chipotle was by far the biggest and most regrettable for the company. In 2014, shareholders grilled McDonald's executives on why they'd gotten out just as Chipotle was on the rise, and they were told that Chipotle had grabbed attention from McDonald's itself. Because sure, it makes a ton of sense for a company to cost itself hundreds millions of dollars just because their main identity wasn't getting enough attention.

Only eight years after the divestment, Chipotle was growing by 16%, while McDonald's was declining by 1%. It's safe to say it worked out well for Chipotle, though, and not just from a monetary perspective. McDonald's also wanted its subsidiary to add breakfast items and drive-thrus, concepts which were anathema to Chipotle. 

For all Chipotle has to be happy about the move, it's safe to say, in retrospect, that this was a horrible decision on McDonald's part.