Chipotle Mexican Grill (CMG) risk factors, FY2024 10-K

Risks Related to our Brand Reputation and Restaurant Operations

1. 01Food safety and food-borne illness concerns may have an adverse effect on our business by negatively impacting our brand, decreasing sales and increasing costs
2. 02Failure to maintain the reputation and relevance of the Chipotle brand could negatively impact our financial results
3. 03The restaurant industry is highly competitive. If we are not able to compete successfully, our business, financial condition and results of operations would be adversely affected
4. 04Our investments in technology and automation to transform and enhance the experience of our employees and guests may not generate the expected results
5. 05Our use of third-party delivery services may not be profitable and substandard service may negatively impact our reputation

Risks Related to Human Capital

1. 06If we are not able to hire, develop and retain qualified restaurant employees and/or appropriately plan our workforce, our growth plan and profitability could be adversely affected
2. 07If we fail to comply with applicable employment and labor laws and regulations, it could have a material, adverse impact on our business
3. 08Increases in the cost of labor, including mandated minimum wage increases and increases in the cost of health benefits, could adversely impact our business and profitability
4. 09A failure to recruit, develop and retain effective leaders or the loss or shortage of management personnel with key capacities and skills could impact our strategic growth plans and jeopardize our ability to meet our business performance expectations and growth targets

Risks Related to Cybersecurity, Data Privacy and IT Systems

1. 10Breaches or other unauthorized access, theft, modification or destruction of guest and/or employee personal, confidential or other material information that is stored in our systems or by third parties on our behalf could damage our reputation and expose us to potential liabilities
2. 11If we fail to fully comply with privacy and data protection laws and regulations, we could incur significant civil and criminal penalties and liabilities, suffer reputational damage, and adverse publicity
3. 12We rely heavily on information technology systems and failures or interruptions in our IT systems could harm our ability to effectively operate our business and/or result in the loss of guests or employees

Risks Related to Our Supply Chain

1. 13Increases in the costs of ingredients, restaurant equipment and other materials could adversely affect our financial results
2. 14Shortages or interruptions in the supply of ingredients could adversely affect our operating results
3. 15If our supply chain capacity does not expand to match our new restaurant growth, our long-term growth goals could be impaired or delayed

Legal and Regulatory Risks

1. 16We could be party to litigation or other legal proceedings that could adversely affect our business, results of operations and reputation
2. 17We are subject to extensive laws, government regulation, and other legal requirements and our failure to comply with existing or new laws and regulations could adversely affect our operational efficiencies, ability to attract and retain talent and results of operations

Risks Related to Our Growth and Business Strategy

1. 18If we are unable to meet our new restaurant opening goals, or maintain the attractiveness of our existing restaurants, our profitability could suffer
2. 19Our failure to effectively manage and support our growth could have a negative adverse effect on our business and financial results
3. 20If we partner with third parties or acquire new businesses that do not align with our core values or that do not fulfill their contractual responsibilities and commitments, our brand reputation and international growth plans could suffer
4. 21The market price of our common stock may be more volatile than the market price of our peers

Risks Related to Sustainability Factors

1. 22We are subject to evolving public disclosure requirements and expectations, including with respect to sustainability matters, that could expose us to numerous risks and could adversely affect our reputation and results of operations
2. 23Climate change and volatile adverse weather conditions could adversely affect our restaurant sales or results of operations
3. 24Economic and business factors that are largely beyond our control may adversely affect consumer behavior and our financial results
4. 25Our quarterly financial results may fluctuate significantly, including due to factors that are not in our control