6-figure incomes at Chipotle

Joyzelle Davis, Rocky Mountain News

Published August 21, 2007 at midnight

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After college, Saul Muniz wanted a job that could help him pay down school debt while he figured out his next step.

He became an assistant supervisor at Chipotle Mexican Grill, entering a quick-service industry notorious for high turnover and low pay.

Nearly nine years later, the 32- year-old's one-time stopgap job has turned into a career with a potential six-figure paycheck.

As manager of the Chipotle restaurant at the Colorado Mills shopping center in Lakewood, Muniz still spends part of his days helping out on the grill and greeting customers. But as one of Chipotle's recently designated "restaurateurs," he's also eligible for substantial bonuses for turning crew members into managers and beating his store's annual sales goals.

"If you love to be in the stores, you can stay there and make good money," Muniz said.

Denver-based Chipotle is at the leading edge of an industrywide effort to hold on to top store talent in the face of a tight labor market.

The constant employee churn in the fast-food industry comes with a price: It costs $20,000 every time a restaurant loses a manager and $2,400 to replace hourly employees, according to People Report, a Dallas-based research firm that tracks restaurant employment trends.

Programs like Chipotle's have been around for years at such full-service restaurant chains as Outback Steakhouse, but they're rare in the quick-service industry, said Teresa Siriani, president of the People Report.

"Quite often, this industry has been regarded as where people go until they get a real job," she said. "But this can be a career. Where else are you going to find a 25-year-old running good businesses, sometimes multimillion- dollar businesses?"

Chipotle started its restaurateur program last year as a nod to the critical role restaurant managers play in the chain's success. Since then, 60 one-time general managers at the 640 company- owned stores have been tapped for the title, meaning they operate Chipotle's best-performing stores and have a track record of developing their crews into leadership positions.

A year into the program, Chipotle's first restaurateur topped the $100,000 mark on sales performance alone. Chipotle's management turnover is now below 30 percent, compared with 34 percent last year and well below the industry average of 39 percent.

Beyond the money, several restaurateurs say they appreciate the recognition that they can run the restaurant as if it's their own.

"I'm making business decisions. If I want to give someone a raise, I have to figure out how I am going to offset that in my budget," said Joel Rubenstein, a restaurateur at Chipotle's University Hills store. "I'm not always calling my immediate supervisor."

Chipotle and its fast-casual rival Qdoba have long had better than average benefits for the industry, including matching 401(k) plans and medical, dental and vision coverage.

Denver-based Qdoba for years has offered managers bonuses for exceeding sales targets and developing crew members into management, said Mike Speck, Qdoba's vice president of human resources and training. Top store managers are rewarded with promotions into the information technology help desk, quality control or training positions.

"We're constantly asking managers what they want to do next and what their goals are," said Kevin Browne, a Qdoba corporate regional manager who started as a store manager.

Chipotle's restaurateur program was created in part to keep top managers in their stores instead of moving to corporate posts. For the fast-growing restaurant chain, having experienced managers also lessens the burden on area managers who oversee as many as nine stores at a time.

Kay Geist, a Chipotle area manager who oversees the downtown Denver region, said she visits her one restaurateur's location once a month compared with as often as once a week for new managers.

"If I didn't go into her restaurant for two months, nothing would be different," Geist said.

Store managers can still move into an area manager position if they want, but the restaurateur program is designed to give managers additional bonuses for the job they're already doing well, she said.

"Becoming an area manager is a great goal," Muniz said, "but with this restaurateur program, there's no need to leave the restaurant."

Chipotle's restaurateur program

• $10,000 bonus for developing crew members into managers.

• Bonuses of 10 percent beyond a store sales plan (i.e., if a restaurant plan was to do $1.6 million for the year and it hit $1.9 million, the restaurateur would get 10 percent, or $30,000, of that $300,000 difference.)

• Restaurateurs are also eligible for the same bonuses general managers get, which are paid twice yearly based on personal performance and restaurant results.

• The program launched in 2006, and so far about 60 of Chipotle's 640 store managers have been designated as "restaurateurs." Since the program started, about 60 percent of managers are promoted from within, compared with 30 percent a year ago.

davisj@RockyMountainNews.com or 303-954-2514

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