Margin Outlook
Q: What margins can you expect at $4 million AUVs?
A: John Hartung expects margins to expand as average unit volumes (AUVs) grow to $4 million, reaching the high 20% to possibly 30% range, driven by about 40% flow-through on increased sales.

Unit Growth Potential
Q: Is there upside to the 7,000 restaurant target?
A: Brian Niccol believes the goal of 7,000 North American restaurants is practical and possibly conservative, as successful expansion in high-penetration areas suggests potential for even more growth. He hopes the target proves to be conservative.

Reaching 10% Unit Growth
Q: How will you achieve 10% unit growth next year?
A: John Hartung states they have strong visibility and robust inventory to approach 10% unit growth next year, despite extended timelines. Improved developer activity and permitting could help reach this growth rate sooner.

Throughput Driving Traffic Growth
Q: How does throughput impact 2024 traffic opportunity?
A: Brian Niccol attributes over 7% transaction growth in Q4 to better restaurant execution and throughput. By focusing on the four pillars of great throughput and increasing staffing on the front line, he sees significant upside for further transaction growth in 2024.

Impact of California FAST Act on Pricing
Q: How will California's FAST Act affect pricing?
A: John Hartung anticipates an additional 80 to over 100 basis points of menu price increases across all restaurants due to the FAST Act's impact on California wages, affecting about 15% of their locations. They are considering options to cover profitability or protect margins.

Chipotlane Impact on Margins
Q: How do Chipotlanes affect overall company margins?
A: John Hartung explains that Chipotlanes have margins hundreds of basis points higher than non-Chipotlanes, with slightly higher volumes and similar investment costs, leading to much higher returns and an accretive impact on overall margins as more Chipotlanes are opened.

Automation and Prep Efficiencies
Q: What opportunities exist to improve prep efficiency?
A: Brian Niccol sees significant potential in automation like Autocado and robotics to enhance morning prep, which is critical for lunch success. Efficient prep can lead to better throughput and overall operational performance without centralizing kitchens.

Value Perception Driving Traffic
Q: How does strong value perception impact traffic?
A: Brian Niccol notes that Chipotle's value scores are strong across all income cohorts, as they offer higher-quality food at a modest price increase over lower-value options and are 20–30% less expensive than similar fast-casual competitors, helping drive traffic even in a soft consumer environment.

Rewards Program Enhancing Frequency
Q: How does the rewards program affect customer frequency?
A: Brian Niccol states that customers in the nearly 40 million-member rewards program show higher frequency and higher check, leading to increased engagement and repeat business compared to pre-pandemic levels.

LTOs Attracting New Customers
Q: Do LTOs drive new customer acquisition?
A: Brian Niccol confirms that limited-time offers (LTOs), like carne asada, effectively attract new customers. They focus on LTOs that perform well in bringing in new patrons, contributing to customer growth.