A:

Chipotle Mexican Grill Inc. (CMG), is a market leader in the fast-casual dining sector, faces direct competition from four other companies. These include Qdoba Restaurant Corporation, MTY Food Group Inc., Mswg LLC, and Rubio's Coastal Grill. Chipotle also competes on a less head-to-head basis against Taco Bell Corporation (YUM), the market leader in the Mexican-style fast-food sector.

Companies in the restaurant chain business compete on a number of different levels, including menu, ambiance, innovation, and price as well as size, geographic reach, established reputation, and attractiveness to investors. Like other restaurant chains that adhere to the "fast casual" concept, Chipotle tries to combine the convenience and affordability of a counter-service, fast food eatery (McDonald's, Burger King) with higher-quality dishes and a more appealing environment. Meals are typically somewhat pricier than at a fast food restaurant, but the food is prepared on the spot using healthier ingredients such as fresh vegetables, poultry, and meat products.

As of June 2018, the publicly traded Chipotle owns and operates over 2,450 restaurants. Mswg, which is owned by Focus Brands, operates more than 680 Moe's Southwest Grill eateries in 40 states, most located east of the Mississippi River. Meanwhile, under the ownership of fast food giant Jack in the Box (JACK), Qdoba operates and franchises eateries in over 718 locations. MTY Food Group Inc., a Montreal-based restaurant company, operates or franchises Baja Fresh Mexican Grills at over 162 sites, while also overseeing Salsa Fresh Mexican Grill and Canyons Burger Company. Privately owned, West Coast-based Rubio's runs establishments in about 200 locations.

Chipotle is still dwarfed in size by fast-food giant Taco Bell, the operator of some 6,200 sites throughout the U.S. Taco Bell is owned by Yum! Brands, the worldwide leader in fast food chains, which owns Pizza Hut and KFC, as well. However, while sales of fast-casual food outlets in general, not just those with Mexican-style menus, have been slowing for the past two years, Chipotle's have climbed, bouncing back several food-safety crises in the past few years.

Chipotle, founded in 1993 by a cook named Steve Ells, is not even the oldest Mexican-style fast-casual dining chain. Rubio's started 10 years earlier. Rubio's, however, has not attained the same geographic footprint as Chipotle. All Rubio's restaurants are located in five western states.

As of 1998, five years after its establishment, Chipotle only ran 16 restaurants, all situated in Colorado. That same year, though, fast food behemoth McDonald's Corporation (MCD) became a major investor. By 2006, when McDonald's completed a divestiture from Chipotle, the Mexican-style dining chain had mushroomed to 500 locations.

Chipotle's direct rivals use various approaches to pursue their own growth. Moe's Southwest Grill restaurants attempt to differentiate themselves with a fun and offbeat environment featuring menu items named after TV and movie stars. Baja Fresh Mexican Grills introduced a new restaurant design in 2013, along with a revamped menu that places a bigger emphasis on food flavor and freshness. In 2010, Rubio's went private through a merger with a subsidiary of Mill Road Capital. Rubio's is now trying to set itself apart from Chipotle and other competitors by unveiling new fresh fish items and giving some of its California restaurants a beach-like look.

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