For a business that is often seen as the gold standard of fast food, McDonald’s sees a surprisingly small success, creating other popular chains. It was a big news when the Burger restaurant launched its brand on its new COSMC in 2023, because despite the huge success of the chain, it did not own other restaurants at the time. Less than two years later, McDonald’s has already closed its several COSMC stores. In this modern chain, people are accustomed to the idea that chains like Taco Bell and KFC are part of a greater group, but McDonald’s stands on its own. However, this was not always that way. For a short running in the late 1990s and early 2000s, McDonald’s strived to expand its portfolio beyond the burgers and started with two already popular chains: Chipotle Mexican Grill and Donatos Pizza.
At the end of the 1990s, McDonald’s acquired the two chains, buying Donatos in 1999 and investing in Chipotle in 1998. It was part of a bigger strategy for expanding other markets, which included the purchase of the Boston market and a share in the popular sandwiches chain, chairman. Although it may seem strange now, in the 90’s McDonald’s was actually something like blurry. The growth of the chain was funny by the fact that there were just not many places to open new McDonald’s, which would be profitable. So, the distribution of a purchase, including Chipotle and Donatos, was a way to convince investors that the company could continue to increase its revenue in other ways.
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Chipotle and Donatos were actually in completely different places when everyone was acquired by McDonald’s. Donatos Pizzeria was founded in Columbus, Ohio, in 1963 and slowly grew into a big place for the Midwest. When McDonald’s bought the brand in 1998, it already had 143 seats. Chipotle, on the other hand, was more on top. Founder Steve Els started Chipotle in Denver in 1991, and by ’98 he increased, but only to 16 seats. It was a much less tested brand and was the first McDonald purchase of an external concept. It was certainly gambling.
In the end, both chains proved to be discrepancies for the Burgeh giant. The founder of Chipotle Ells was quite protected from the brand and its emphasis on fresh ingredients, rejecting many of the traditional ways that McDonald’s offered to expand. Chipotle did not want to franchise while McDonald’s executives wanted Chipotle to add breakfast and driving, which Ells was also fighting.