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TABLE OF CONTENTS
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                to

Commission File Number: 1-32731

CHIPOTLE MEXICAN GRILL, INC.
(Exact name of registrant as specified in its charter)

Delaware	84-1219301
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
1543 Wazee Street, Suite 200 Denver, CO	80202
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (303) 595-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Class A common stock, par value $0.01 per share	New York Stock Exchange

Securities Registered pursuant to Section 12(g) of the Act: None

        Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

        Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

        Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o    No ý

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

        Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Act).

o Large accelerated filer o Accelerated filer ý Non-accelerated filer

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o    No ý

        The initial public offering of Chipotle Mexican Grill, Inc.'s Class A common stock, par value of $0.01 per share, commenced on January 26, 2006. There was no public market for the Company's common stock prior to that date.

        As of March 9, 2006 there were 9,103,605 shares of the registrant's Class A common stock, par value of $0.01 per share, and 23,433,999 shares of the registrant's Class B common stock, par value of $0.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

        Part III incorporates certain information by reference from the registrant's definitive proxy statement for the 2006 annual meeting of stockholders, which proxy statement will be filed no later than 120 days after the close of the registrant's fiscal year ended December 31, 2005.

TABLE OF CONTENTS

PART I
Item 1.	Business
Item 1A.	Risk Factors
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Submission of Matters to a Vote of Security Holders
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6.	Selected Consolidated Financial Data
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk
Item 8.	Financial Statements and Supplementary Data
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A.	Controls and Procedures
Item 9B.	Other Information
PART III
Item 10.	Directors and Executive Officers of the Registrant
Item 11.	Executive Compensation
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13.	Certain Relationships and Related Transactions
Item 14.	Principal Accounting Fees and Services
PART IV
Item 15.	Exhibits Financial Statement Schedules
Signatures

PART I

ITEM 1. BUSINESS

Who We Are and What We Do: General

        Chipotle Mexican Grill, Inc. ("Chipotle" or the "Company") develops and operates fast casual, fresh Mexican food restaurants in 21 states throughout the United States and in the District of Columbia. As of December 31, 2005, we operated 481 restaurants and had eight restaurants operated by franchisees. We completed our initial public offering of Class A common stock in January 2006. McDonald's Corporation ("McDonald's") is our majority owner (with beneficial ownership of approximately 87% of the combined voting power of our outstanding stock and 65% of our economic interest after the initial public offering). We manage our operations based on four regions and have aggregated our operations into one reportable segment. Financial information regarding our operations, assets and liabilities, including our revenues and net income (loss) for the fiscal years ended December 31, 2005, 2004 and 2003 and our total assets as of December 31, 2005 and 2004, is included in our consolidated financial statements and respective notes in Item 8 "Financial Statements and Supplementary Data". We became a subsidiary of McDonald's in September 1999 when McDonald's acquired a controlling stake in us at the same time that our predecessor, World Foods, Inc., a Colorado corporation formed in 1996, merged with Chipotle. Chipotle, a corporation formed under the laws of the State of Delaware on January 30, 1998, was the surviving entity in the merger.

        The Chipotle philosophy is simple: demonstrate that food served fast doesn't have to be a "fast-food" experience. We try to avoid using a formulaic approach when creating our experience and looked to fine-dining restaurants for inspiration. We use high-quality raw ingredients, classic cooking methods and a distinctive interior design, and have friendly people to take care of each customer—features that are more frequently found in the world of fine dining. We compete in a category of dining now called "fast-casual," the fastest growing segment of the restaurant industry, where customers expect food quality that's more in line with full-service restaurants, coupled with the speed and convenience of fast food.

        We do just a few things but try to do them really well, and we plan to keep this intentionally focused strategy as we grow. We elevate basic raw ingredients into food that's more sophisticated with layers of flavor through our recipes and cooking techniques. Our store design also transforms simple materials in distinctive ways, giving our stores an architectural style that is not commonly found in typical fast-food restarurants. We respect our employees and invite them to share their ideas on how to best serve our customers, which we think inspires them to take pride in their work and increases their dedication to our customers and our company. From our focused menu to the uncomplicated flow of our stores, our simple but thorough management and operations practices, and a comparatively small inventory, we emphasize keeping things simple so we can focus on serving great food.

"Hours To Prepare, Seconds to Serve": Menu and Food Preparation

        A Few Things, Thousands of Ways.    We serve only a few things: burritos, burrito bols (a burrito without the tortilla), tacos and salads. But because customers can choose from four different meats, two types of beans and a variety of extras such as salsas, guacamole, cheese and lettuce, there's enough variety to extend our menu to provide more than 65,000 choices. We plan to keep a simple menu, but we'll consider additions that we think make sense. For example, we introduced the burrito bol in 2003 and, in 2005, we rolled out a salad that uses the same ingredients as our burritos and tacos, with the addition of chipotle-honey vinaigrette that we make in-store daily.

        In preparing our food, we use gas stoves and grills, pots and pans, wire whisks and other kitchen utensils, walk-in refrigerators stocked with a variety of fresh ingredients, herbs and spices and dry goods such as rice. Ingredients we use include marinated chicken, carnitas (seasoned pork), barbacoa (spicy

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shredded beef), marinated steak and pinto and vegetarian black beans. We add our rice, which is flavored with cilantro and lime, as well as freshly shredded cheese, sour cream, lettuce, tomatoes, peppers and onions, depending on each customer's specifications. We use various herbs, spices and seasonings to prepare our meats and vegetables. We also provide a variety of extras such as guacamole and salsas. To complement our main menu items, we also serve tortilla chips seasoned with lime and salt. In addition to sodas and other soft drinks, most of our stores also offer a selection of beer and margaritas.

        We prepare most items from scratch in our stores, and we've developed a start-to-finish process of food preparation that drives our food ordering process. In all of our stores, we make our guacamole, tomato and corn salsa daily, using what we believe are the best available ingredients, including Hass avocados, herbs, spices and real citrus juice.

        Food Served Fast…So That Customers Can Enjoy It Slowly.    Our employees spend hours preparing our food on-site, but each customer order can be ready in seconds. Customers select exactly what they want and how they want it by speaking directly to the employees preparing the food. While we think that our customers return because of the great-tasting food, we also think that they like getting food served fast without having a "fast-food" experience, even when they're not in a hurry. And while our stores often have lines, we try to serve customers as quickly as possible; we've even been able to serve as many as 300 customers an hour at some locations. The natural flow of our store layout, including the floor plan and the design of our serving line, are designed to make the food ordering process intuitive and thus, we believe, more efficient. And we're focused on further improving the speed of service in all of our restaurants, so that we can accommodate more customers and larger orders without disrupting store traffic. By emphasizing speed of service without compromising the genuine interactions between our customers and our crews, and by continually making improvements to our stores to keep pace at even our highest-volume stores, we believe that we can provide the Chipotle experience to more and more customers.

        "Food with Integrity."    We focus on quality, service and the Chipotle experience. At the same time, however, we're committed to emphasizing "food with integrity," beginning with our suppliers and ending with the way we prepare food for customers. Because our menu is so focused, we can concentrate on where we obtain each ingredient, and this has become a cornerstone of our continuous effort to improve our food. All of our pork, for example, comes from pigs that are naturally raised in open pastures or deeply bedded barns, without being confined or subject to antibiotics. We also serve naturally raised chicken in about 45% of our stores and naturally raised beef in about 34% of our stores. For us, "naturally raised" means that our suppliers' pigs, chickens and cattle are raised in humane environments on vegetarian diets without the use of antibiotics. It also means that our suppliers don't use hormones, which are prohibited by federal regulations for pork and chicken, and which we explicitly prohibit for our beef. We're enthusiastically investigating the use of more sustainably grown produce, meaning produce grown by suppliers who we believe respect the environment, while still charging reasonable prices for our food. Today, about 20% of all of the beans we buy are organically grown, that is, they meet U.S. Food and Drug Administration standards for "organic." At each store, we mix those organically grown beans with other ingredients that are not organic. We even work with experts in the areas of animal ethics to try to support more humane farming environments, and we visit the farms and ranches from which we obtain our ingredients.

        We do, however, face challenges in pursuing this approach, including the length of time, costs and risks associated with purchasing naturally raised or sustainably grown ingredients. Naturally raised meat and sustainably grown vegetables are more costly and the growth process is longer. Herd losses can also be greater when animals aren't treated with antibiotics and hormones. Given the costs associated with natural and sustainable farming practices, many large suppliers have not found it economical to pursue business in this area. We believe that consumers' increasing concern about where and how food is raised, and in the environmental management and animal husbandry practices of food suppliers, will

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foster demand for these foods. We believe that increased demand for naturally raised meat and produce will in turn attract the interest and capital investment of larger farms and suppliers. That said, we understand that we'll continue to be at the forefront of this trend and must balance our interest in advancing "food with integrity" with our desire to provide great food at reasonable prices. If our focus resonates with consumers, it should improve our sourcing flexibility, although we would expect that these ingredients and other raw materials will remain more expensive than commodity-priced equivalents for some time to come.

Making and Selling "One Burrito At A Time": Store Management And Operations

        People With Passion.    We value the individuality of our company, our employees and our customers, which we believe results in a management, operations and training philosophy distinct from that of our competitors. We make an effort to hire employees who share a passion for food, and who will operate our stores in a way that is consistent with our high standards but that allows each of their unique personalities and strengths to contribute to our success. We also produce training materials that are thought provoking and which engage our employees, rather than providing rote, step-by-step scripts or rigid policy manuals. Through our culture, diversity and language programs that we provide in all of our markets, we teach English to Spanish-speaking workers and Spanish to English-speakers, which helps staff to better serve customers and makes for tighter crews. This program helps encourage our staff members to develop skills that will enhance their work experience and enrich their personal lives.

        Importance of Methods and Culture.    Although we have many stores, we believe that our departure from the automated cooking techniques used by many of our competitors sets our vision and our food apart. Our crews use classic professional cooking methods, including slicing, marinating and grilling our meats and hand-chopping many of our vegetables, in kitchens resembling those of high-end restaurants. Despite our more labor-intensive method of food preparation, we believe that we produce food with an efficiency that enables us to compete effectively.

        The Front Line is Key.    Our store and kitchen designs intentionally place crew members "up front" with customers to reinforce our focus on service. All our store employees are encouraged to have genuine interactions with customers no matter their specific job, whether preparing food or serving customers during our busiest period. We focus on attracting and keeping people who can replicate that experience for each customer "one burrito at a time." We provide each customer with individual attention and make every effort to respond to customer suggestions and concerns in a personal and hospitable way. We believe our focus on creating a positive and interactive experience helps build loyalty and enthusiasm for our brand among store managers, crew members and customers alike.

        The Basics.    Each store typically has a store manager, an assistant manager and an average of approximately 22 full and part-time crew members. We generally have two shifts at our stores, which helps us better predict our store payroll expenses and in return provides our employees with more stable and predictable work hours. We tend to have more employees in our busier stores. We cross-train our employees, with a view to creating depth of competency in our critical store functions. Consistent with our emphasis on customer contact, we encourage our store managers and crew members to welcome and interact with customers throughout the day. And although they may increase our labor costs, we believe that the benefits we provide to our employees, which include language training and our company car program for longer-term store managers, help us to attract and keep good store managers and crew members.

        In addition to the employees serving our customers at each store, we also have area managers (responsible on average for about six stores each) and operations directors (responsible on average for about 50 stores each). Our four regional directors (who report to our President and Chief Operating Officer) each supervise between one to four operations directors.

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Where We Get Our Ingredients: Provisions and Supplies

        Close Relationships With Vendors.    Maintaining the high-quality levels we expect in our stores depends in part on our ability to acquire fresh ingredients and other necessary supplies that meet our specifications from reliable suppliers. We purchase from various suppliers, carefully selected based on quality and their understanding of our brand, and we seek to develop mutually beneficial long-term relationships with them. We work closely with our suppliers and use a mix of forward, fixed and formula pricing protocols, although we do not have long-term supply contracts or guaranteed purchase amounts. We've tried to increase, where necessary, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, weather, crises and other world events that may affect supply prices.

        We do not purchase raw materials directly from farmers or other suppliers. Instead, we train suppliers to purchase ingredients and other supplies for us based upon our specifications and to negotiate the terms of purchase with raw materials suppliers on our behalf.

        Distribution Arrangements.    We deliver ingredients and other supplies to our stores from 16 regional distribution centers. Of our 16 distribution centers, 13 serve McDonald's, its subsidiaries and its franchisees exclusively, while the other three have customers other than McDonald's. Although this network is comprised of independent distribution centers, there is a possiblity that we may need to replace some of them as we become more independent from McDonald's.

        Relationship With McDonald's.    Our relationship with McDonald's gives us substantial credibility with our suppliers, and we have used McDonald's knowledge of purchasing and supply chain management to negotiate lower prices. For example, McDonald's relationship with Coca-Cola has helped us contain our beverage costs. We also use many of the same suppliers for our paper and packaging products. As we increase our independence from McDonald's, we may face difficulties replacing services it currently provides to us and entering into new or modified arrangements with existing or new suppliers or service providers.

Customers Who Sell For Us: Marketing

        We believe the best and most recognizable brands aren't built through advertising or promotional campaigns alone, but rather through deeply held beliefs evident in how a company runs its business. All of the ways that we project ourselves—beginning with each customer's experience in our stores, the look and feel of our stores, our advertising and promotional programs, and the design items that carry our name or logo—influence how people think about us. By adhering to this principle, we believe that Chipotle is well positioned to become a highly recognized brand.

        When we open a new store, we plan a range of activities to introduce our food to the local community to help create interest in the store from the start. And our advertising, which includes print, outdoor, transit and radio ads and most recently a sponsorship of a cooking show on the Public Broadcasting Service, has a low-key and irreverent tone that has been popular with customers. In addition, a number of publications have written favorably about our food and store concept, and our food and stores have been featured in television programs produced without our involvement.

        Although our marketing program has many components, we believe the single greatest contributor to our success has been word-of-mouth, with our customers learning about us and telling others. Some of our customers have gone so far as to develop websites about Chipotle, providing a way for Chipotle customers to share their stories. This kind of support helps us grow without requiring additional advertising expenditures.

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Competition

        The fast-casual segment of the restaurant industry is highly competitive and fragmented. In addition, fast-casual restaurants compete against other segments of the restaurant industry, including quick-service restaurants and casual dining restaurants. The number, size and strength of competitors vary by region. All of these restaurants compete based on a number of factors, including taste, quickness of service, value, name recognition, restaurant location and customer service. Competition within the fast-casual restaurant segment, however, focuses primarily on taste, quality and the freshness of the menu items and the ambience and condition of each restaurant.

        We compete with national and regional fast-casual, quick-service and casual dining restaurants. Our competition also includes a variety of locally owned restaurants and the deli sections and in-store cafés of several major grocery store chains. Many of our competitors have greater financial and other resources, have been in business longer, have greater name recognition and are better established in the markets where our stores are located or are planned to be located.

        We believe we're well-positioned to continue to grow our market position in existing and new markets given current favorable consumer trends, including the increasing impact of Hispanic culture on food and flavors, the growth of the Mexican food segment and increasing awareness and concern among consumers about what they eat. Some of our competitors have formats similar to ours. We believe, however, that Chipotle is rapidly becoming one of the most recognized fast-casual restaurants and is known for its focus on using a variety of fresh ingredients and commitment to "food with integrity," which we think represents a significant competitive advantage in the segment in which we operate.

Seasonality

        Seasonal factors cause our profitability to fluctuate from quarter to quarter. Historically, our average store sales, which we define as the average trailing 12-month sales for company-owned stores in operation for at least 12 full months, are lower in the first and fourth quarters due, in part, to the holiday season and because fewer people eat out during periods of inclement weather (the winter months) than during periods of mild or warm weather (the spring, summer and fall months). Other factors also have a seasonal effect on our results. For example, stores located near colleges and universities generally do more business during the academic year.

Our Intellectual Property and Trademarks

        "Chipotle," "Chipotle Mexican Grill," "Chipotle Mexican Grill (in stylized font)," "Unburritable," "Food With Integrity," "Fresh Is Not Enough Anymore," "The Gourmet Restaurant Where You Eat With Your Hands," the Chili Pepper Logo design, the Foil Burrito design and the Chipotle Medallion design are U.S. registered trademarks of Chipotle.

        In addition to these U.S. registrations, we own the trademarks for "Chipotle Mexican Grill" in Brazil and Mexico and for "Chipotle" in Australia and the European Union, among other countries. We have also filed trademark applications for "Chipotle" in a number of countries and for "Chipotle Mexican Grill" in two countries. We plan to assign and transfer our interest in our non-domestic trademarks to Chipotle International, Ltd., our wholly-owned Irish subsidiary. Although our policy is to protect and defend vigorously our rights to this intellectual property, we may not be able to adequately protect our intellectual property, which could harm the value of our brands and adversely affect our business.

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Information Systems

        Chipotle uses an integrated information system to manage the flow of information within each restaurant and between the restaurants and the corporate office. This system includes a point-of-sales local area network that helps facilitate the operations of the restaurant by recording sales transactions and printing orders in the appropriate locations within the restaurant. Additionally, the point-of-sales system is used to authorize, batch and transmit credit card transactions, to record employee time clock information, and to produce a variety of management reports. Select information that is captured from this system is transmitted to the corporate office on a daily basis, which enables management to continually monitor operating results. We believe that our current point-of-sales systems will be an adequate platform to support our continued expansion.

Employees

        As of December 31, 2005, we had about 13,000 employees, including 1,300 salaried employees and 11,700 hourly employees. None of our employees are unionized or covered by a collective bargaining agreement.

ITEM 1A. RISK FACTORS

Cautionary Note Regarding Forward-Looking Statements

        This report includes statements of our expectations, intentions plans and beliefs that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are intended to come within the safe harbor protection provided by those sections. These statements, which involve risks and uncertainties, relate to the discussion of our business strategies and our expectations concerning future operations, margins, profitability, liquidity and capital resources and to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. We have used words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "thinks," "estimates," "seeks," "expects," "predicts," "could," "projects," "potential" and other similar terms and phrases, including references to assumptions, in this report to identify forward-looking statements. These forward-looking statements are made based on expectations and beliefs concerning future events affecting us and are subject to uncertainties, risks and factors relating to our operations and business environments, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed or implied by these forward-looking statements. These risks and other factors include those listed under Item 1A "Risk Factors" and elsewhere in this report.

        When considering these forward-looking statements, you should keep in mind the cautionary statements in this report and the documents incorporated by reference. New risks and uncertainties arise from time to time, and we cannot predict those events or how they may affect us. We assume no obligation to update any forward-looking statements after the date of this report as a result of new information, future events or developments, except as required by the federal securities laws.

The planned rapid increase in the number of our stores may make our future results unpredictable.

        There were 489 Chipotle stores as of December 31, 2005, 260 of which have opened since January 1, 2003. We plan to increase the number of our stores significantly in the next three years. This growth strategy and the substantial investment associated with the development of each new store (as well as the impact of our new stores on the sales of existing stores) may cause our operating results to fluctuate and be unpredictable or adversely affect our profits. Our future results depend on various factors, including successful selection of new markets and store locations, market acceptance of the Chipotle experience, consumer recognition of the quality of our food and willingness to pay our prices

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(which reflect our often higher ingredient costs), the quality of our operations and general economic conditions. What's more, as has happened when other fast-casual restaurant concepts have tried to expand nationally, we may find that the Chipotle concept has limited or no appeal to customers in certain new markets or we may experience a decline in the popularity of the Chipotle experience. Newly opened stores may not succeed, future markets and stores may not be successful and, even if we're successful, our average store sales may not increase at historical rates.

As we increase our independence from McDonald's, we may face difficulties replacing services it currently provides to us and entering into new or modified arrangements with existing or new suppliers or service providers.

        We've benefited from our relationship as a consolidated or majority-owned subsidiary of McDonald's. For example, McDonald's has provided us, directly or through its own vendor relationships, with accounting services, insurance policy coverage, banking services, health and other insurance benefits for our employees and employee benefit plans, as well as with its expertise in certain areas of our operations, such as real estate. We also benefit from our relationship with McDonald's when we buy supplies or distribution or other services. For example, McDonald's relationship with Coca-Cola has helped us contain our beverage costs, and we've relied on the McDonald's distribution network. As long as we are a consolidated or majority-owned subsidiary of McDonald's, we expect to continue to have some of these advantages, and in connection with our initial public offering we entered into a services agreement with McDonald's to clarify our relationship.

        Following our initial public offering, McDonald's now holds beneficial ownership of shares having about 87% of the combined voting power of our common stock. If McDonald's ownership interest declines significantly in the future, we'll lose an increasing amount of these benefits, many of which will not be covered by the services agreement. For example, we currently obtain beneficial pricing and/or service levels from certain suppliers and service providers, and pay McDonald's for the costs they incur in administering our 401(k) plan and providing certain health benefits, including workers compensation, for our employees. If McDonald's ceases to own more than 80% of the combined voting power of our outstanding stock, we'll need to administer our 401(k) plan and provide these health benefits on a stand-alone basis and could incur increased costs as a result. If McDonald's ceases to own more than 50% of the combined voting power of our outstanding stock, we may have to pay more for processing our credit and debit cards and our gift cards, our audit fees, our property insurance, our umbrella and excess liability premiums and our banking services. In some cases, current benefits, such as the use of McDonald's distribution network, are not contractually tied to the level of McDonald's ownership, and the relevant suppliers and service providers could decide to stop giving us beneficial pricing and/or service levels even if McDonald's still owns a substantial equity stake in us.

        As we begin to increase our independence from McDonald's, we may have to seek new suppliers and service providers or enter into new arrangements with our existing ones, and we may encounter difficulties or be unable to negotiate pricing or other terms as favorable as those we currently enjoy, which could harm our business and operating results. However, because we currently have not begun to negotiate new or amended contracts with suppliers and service providers, we cannot now quantify with any certainty potential increases in our expenses. Furthermore, as a public company, in each of 2006 and future years, we expect to incur a few million dollars of legal, accounting and other expenses that were not previously required to be incurred by us as a private company.

We have no independent operating history as a large company, which makes our future business prospects difficult to evaluate.

        We have been a subsidiary of McDonald's since 1998, which has affected the way we operate and manage our business. Because we have no independent operating history as a large company, our

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historical results may not be indicative of our future performance. Our future results depend on various factors, including those identified in these risk factors. We may not remain profitable.

Our sales growth rate depends primarily on our ability to open new stores and is subject to many unpredictable factors.

        We may not be able to open new stores as quickly as planned. We've experienced delays in opening some stores and that could happen again. Delays or failures in opening new stores could materially and adversely affect our growth strategy and our expected results. As we operate more stores, our rate of expansion relative to the size of our store base will decline. In addition, one of our biggest challenges is locating and securing an adequate supply of suitable new store sites. Competition for those sites in our target markets is intense, and lease costs are increasing (particularly for urban locations). Our ability to open new stores also depends on other factors, including:

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obtaining and negotiating leases with acceptable terms;



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hiring and training qualified operating personnel in the local market;



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managing construction and development costs of new stores at affordable levels, particularly in competitive markets;



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the availability of construction materials and labor;



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the availability of, and our ability to obtain, adequate supplies of ingredients that meet our quality standards;



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securing required governmental approvals (including construction, parking and other permits) in a timely manner; and



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the impact of inclement weather, natural disasters and other calamities, such as hurricanes Katrina and Rita in 2005.

        Although we plan to open between 80 and 90 stores in 2006, we may not be able to do so for the reasons described in this risk factor. In addition, our progress in opening new stores from quarter to quarter may occur at an uneven rate.

Our sales and profit growth could be adversely affected if comp store sales are less than we expect.

        While future sales growth will depend substantially on our plans for new store openings, the level of sales at stores open at least 13 full months, which we call comp store sales, will also affect our sales growth and will continue to be a critical factor affecting profit growth. This is because the profit margin on comp store sales is generally higher than the profit margin on new store sales, as comp store sales increases enable fixed costs to be spread over a higher sales base. While we don't expect comp store sales growth to continue at historical levels, our plans do incorporate positive comp store sales. Our ability to increase comp store sales depends in part on our ability to successfully implement our initiatives to increase the speed at which our crew serves each customer, and expanded use of fax service lines and online ordering, which we may not be able to do. It is possible that we will not achieve our targeted comp store sales growth or that the change in comp store sales could be negative. If this were to happen, sales and profit growth would be adversely affected.

Our failure to manage our growth effectively could harm our business and operating results.

        Our plans call for a significant number of new stores. Our existing store management systems, financial and management controls and information systems may be inadequate to support our expansion. Managing our growth effectively will require us to continue to enhance these systems, procedures and controls and to hire, train and retain store managers and crew. We may not respond quickly enough to the changing demands that our expansion will impose on our management, crew and

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existing infrastructure. We also place a lot of importance on our culture, which we believe has been an important contributor to our success. As we grow, however, we may have difficulty maintaining our culture or adapting it sufficiently to meet the needs of our operations. Our failure to manage our growth effectively could harm our business and operating results.

New stores, once opened, may not be profitable, and the increases in average store sales and comp store sales that we've experienced in the past may not be indicative of future results.

        Historically, our new stores have opened with an initial ramp-up period typically lasting 24 months or more, during which they generated sales and income below the levels at which we expect them to normalize. This is in part due to the time it takes to build a customer base in a new market, higher fixed costs relating to increased construction and occupancy costs and other start-up inefficiencies that are typical of new stores. New stores may neither be profitable nor have results comparable to our existing stores. In addition, our average store sales and comp store sales, which we define as the change in period-over-period sales for the comparable store base which includes company-operated stores opened for at least 13 months, likely will not continue to increase at the rates achieved over the past several years. Our ability to operate new stores profitably and increase average store sales and comp store sales will depend on many factors, some of which are beyond our control, including:

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executing our vision effectively;



•

initial sales performance of new stores;



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competition, either from our competitors in the restaurant industry or our own stores;



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changes in consumer preferences and discretionary spending;



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consumer understanding and acceptance of the Chipotle experience;



•

road construction and other factors limiting access to new stores;



•

general economic conditions, which can affect store traffic, local labor costs and prices we pay for the ingredients and other supplies we use; and



•

changes in government regulation.

        If we fail to open stores as quickly as planned, or if new stores don't perform as planned, our business and future prospects could be harmed. In addition, changes in our average store sales or comp store sales could cause our operating results to vary adversely from expectations, which could cause the price of our common stock to fluctuate substantially.

Our expansion into new markets may present increased risks due to our unfamiliarity with those areas.

        Some of our new stores are planned for markets where we have little or no operating experience. Those markets may have different competitive conditions, consumer tastes and discretionary spending patterns than our existing markets. As a result, those new stores may be less successful than stores in our existing markets. Consumers in a new market may not be familiar with the Chipotle brand, and we may need to build brand awareness in that market through greater investments in advertising and promotional activity than we originally planned. We may find it more difficult in new markets to hire, motivate and keep qualified employees who can project our vision, passion and culture. Stores opened in new markets may also have lower average store sales than stores opened in existing markets, and may have higher construction, occupancy or operating costs than stores in existing markets. What's more, we may have difficulty in finding reliable suppliers or distributors or ones that can provide us, either initially or over time, with adequate supplies of ingredients meeting our quality standards. Sales at stores opened in new markets may take longer to ramp up and reach expected sales and profit levels, and may never do so, thereby affecting our overall profitability.

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We may not persuade customers of the benefits of paying our prices for higher-quality food.

        Our success depends in large part on our ability to persuade customers that food made with higher-quality ingredients is worth the prices they will pay at our stores relative to prices offered by some of our competitors, particularly those in the quick-service segment. We may not successfully educate customers about the quality of our food, and they may not care even if they do understand our approach. That could require us to change our pricing, advertising or promotional strategies, which could materially and adversely affect our results or the brand identity that we've tried to create.

Changes in customer tastes and preferences, spending patterns and demographic trends could cause sales to decline.

        Changes in customer preferences, general economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing restaurants affect the restaurant industry. Our success depends to a significant extent on consumer confidence, which is influenced by general economic conditions and discretionary income levels. Our sales may decline during economic downturns, which can be caused by various economic factors such as high gasoline prices, or during periods of uncertainty, such as those that followed the terrorist attacks on the United States in 2001. Similarly, hurricanes Katrina and Rita are affecting consumer confidence and are likely to affect our supply costs, near-term construction costs for our new stores and may affect our sales going forward. Any material decline in consumer confidence or a decline in family "food away from home" spending could cause our sales, operating results, profits, business or financial condition to decline. If we fail to adapt to changes in customer preferences and trends, we may lose customers and our sales may deteriorate.

Competition from other restaurant companies could adversely affect us.

        We operate in the fast-casual segment of the restaurant industry. This segment is highly competitive with respect to, among other things, taste, price, food quality and presentation, service, location and the ambiance and condition of each restaurant. We also compete with restaurants in the quick-service and casual dining segments. Our competition includes a variety of locally owned restaurants and national and regional chains. Our competitors offer dine-in, carry-out and delivery services. Many of our competitors have existed longer and often have a more established market presence with substantially greater financial, marketing, personnel and other resources than Chipotle. Our parent, McDonald's, operates in the quick-service segment of the restaurant industry. Among our main competitors are a number of multi-unit, multi-market Mexican food or burrito restaurant concepts, some of which are expanding nationally. As we expand further in existing markets, our existing stores may face competition from our new stores that begin operating in those markets.

        Several of our competitors compete by offering menu items that are specifically identified as low in carbohydrates, better for customers or otherwise targeted at particular consumer preferences. Many of our competitors in the fast-casual and quick-service segments of the restaurant industry also emphasize lower-cost, "value meal" menu options, a strategy we don't pursue. Our sales may be adversely affected by these products and price competition.

        Moreover, new companies may enter our markets and target our customers. For example, additional competitive pressures have come more recently from the deli sections and in-store cafés of several major grocery store chains, including those targeted at customers who want higher-quality food, as well as from convenience stores and casual dining outlets. These competitors may have, among other things, lower operating costs, better locations, better facilities, better management, more effective marketing and more efficient operations.

        All of these competitive factors may adversely affect us and reduce our sales and profits.

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Additional instances of avian flu or of "mad cow" disease or other food-borne illnesses could adversely affect the price and availability of chicken, beef or other meat, cause the temporary closure of some stores and result in negative publicity, thereby resulting in a decline in our sales.

        Asian and European countries have experienced and continue to experience, outbreaks of avian flu. Incidents of "mad cow" disease have occurred in Canadian and U.S. cattle herds. These problems, food-borne illnesses (such as e. coli, hepatitis A, trichinosis or salmonella) and injuries caused by food tampering have in the past, and could in the future, adversely affect the price and availability of affected ingredients and cause customers to shift their preferences, particularly if we choose to pass any higher ingredient costs along to consumers. As a result, our sales may decline.

        Instances of food-borne illnesses, real or perceived, whether at our stores or those of our competitors, could also result in negative publicity about us or the restaurant industry, which could adversely affect sales. If we react to negative publicity by changing our menu or other key aspects of the Chipotle experience, we may lose customers who do not accept those changes, and may not be able to attract enough new customers to produce the revenue needed to make our stores profitable. In addition, we may have different or additional competitors for our intended customers as a result of making these changes and may not be able to compete successfully against those competitors. If our customers become ill from food-borne illnesses, we could be forced to temporarily close some stores. For example, in June 2004, Texas health officials investigated reports that customers and employees had become ill with flu-like symptoms after spending time in one of our stores, and we closed that store for less than a week. A decrease in customer traffic as a result of these health concerns or negative publicity, or as a result of a change in our menu or dining experience or a temporary closure of any of our stores, could materially harm our business.

Changes in food and supply costs could adversely affect our results of operations.

        Our profitability depends in part on our ability to anticipate and react to changes in food and supply costs. Any increase in the prices of the ingredients most critical to our menu, such as beef, chicken, cheese, avocados, beans, tomatoes and pork, could adversely affect our operating results. Although we try to manage the impact that these fluctuations have on our operating results, we remain susceptible to increases in food costs as a result of factors beyond our control, such as general economic conditions, seasonal fluctuations, weather conditions, demand, food safety concerns, generalized infectious diseases, product recalls and government regulations. For example, higher diesel prices have in some cases resulted in the imposition of surcharges on the delivery of commodities to our distributors, which they have generally passed on to us to the extent permitted under our arrangements with them. In 2004, hurricanes in some parts of the United States damaged tomato crops and drove prices higher. Similarly, in 2005, hurricane Katrina destroyed a number of chickens raised by one of our chicken suppliers and increased our short-term chicken prices. Both hurricanes Katrina and Rita have resulted in higher diesel and gasoline prices, are affecting consumer confidence and are likely to affect our supply costs and near-term construction costs for our new stores. In addition, in 2004, prices for chicken rose significantly due to a ban by Asian countries on their chicken exports following outbreaks of avian flu. Avian flu continues to spread and could potentially impact our cost for chicken in the future. We do not have long-term supply contracts or guaranteed purchase amounts. As a result, we may not be able to anticipate or react to changing food costs by adjusting our purchasing practices or menu prices, which could cause our operating results to deteriorate. In addition, because we provide moderately priced food, we may choose not to, or be unable to, pass along commodity price increases to our customers.

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We may have experienced a security breach with respect to certain customer credit and debit card data, and we have incurred and may continue to incur substantial costs as a result of this matter. We may also incur costs resulting from other security risks we may face in connection with our electronic processing and transmission of confidential customer information.

        In August 2004, the merchant bank that processes our credit and debit card transactions (the "acquiring bank") informed us that we may have been the victim of a possible theft of credit and debit card data. Together with two forensic auditing firms, we investigated the alleged theft and reviewed our information systems and information security procedures. We also reported the problem to federal law enforcement authorities and have cooperated in their investigation. While to date we have not discovered conclusive evidence that a theft occurred, we identified some store practices that may have made information systems at our stores vulnerable during periods before August 2004. Notably, without our knowledge, the card processing software we used inadvertently retained credit and debit card "Track 2" data, consisting of, among other items, the customer's name, card number, card expiration date and card verification number. In addition, the internet gateways on our computers in some stores may not have been fully secure at all times. As a result, outside parties may have gained access to stored information. It is possible that all of the cards we processed since we began accepting them may have been vulnerable. In the three months prior to being notified of the problem, we processed between 1.3 million and 1.5 million credit and debit card charges each month.

        Through the end of February 2006, we have received claims through the acquiring bank with respect to fewer than 2,000 purportedly fraudulent credit and debit card charges allegedly arising out of this matter in an aggregate amount of about $1.3 million. We've also incurred $1.3 million of expense in connection with fines imposed by the Visa and MasterCard card associations on the acquiring bank. In 2004, we recorded charges of $4.0 million to establish a reserve for claims seeking reimbursement for purportedly fraudulent credit and debit card charges, the cost of replacing cards, monitoring expenses and fees, and fines imposed by Visa and MasterCard. All of the reimbursement claims are being disputed, although we've not formally protested all of the charges. As of December 31, 2005, after charging these expenses against the reserve, the remaining reserve was $1.8 million, which does not take into account an unpaid fine of $0.4 million assessed by MasterCard in December 2005 that we expect to apply against the reserve in 2006. In addition to the reserve, we've also incurred about $1.5 million of additional expenses in this matter, including $1.3 million for legal fees, bringing our total expense relating to this matter to $5.5 million. We have not reserved any additional amounts to date in 2006.

        We may in the future become subject to additional claims for purportedly fraudulent transactions arising out of this matter. As long as a credit or debit card is active, fraudulent charges may be made using that card until the card's expiration date. We may also be subject to lawsuits or other proceedings by various interested parties, including banks and credit unions that issue cards, cardholders (either individually or as part of a class action lawsuit) and federal and state regulators. The statutes of limitation for pursuing some of these potential claims may extend for six years or more in some cases, depending on the circumstances. Moreover, the application of the law and the rules and procedures of the major card associations in these circumstances is generally untested. Any lawsuit or other proceeding will likely be complex, costly and protracted, which could in turn divert financial and management resources from execution of our business plan. We have no way to predict the level of claims or the number or nature of proceedings that may be asserted against us, nor can we quantify the costs that we may incur in connection with investigating, responding to and defending any of them. If we litigate these matters, we may not be able to defend against penalties successfully. The ultimate outcome of this matter could differ materially from the amounts we've recorded in our reserve and could have a material adverse effect on our financial results and condition. Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects.

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        Despite the changes we've made to our information systems as a result of this matter, we still need to periodically upgrade our software. We rely on commercially available software and other technologies to provide security for processing and transmission of customer credit card data. During 2005, a significant portion of our sales were attributable to credit card transactions, and we expect credit card usage to increase. Our systems could be compromised in the future, which could result in the misappropriation of customer information or the disruption of our systems. Either of those consequences could have a material adverse effect on our reputation and business or subject us to additional liabilities. We engaged Internet Security Systems ("ISS") to perform our Visa Payment Card Industry audit. ISS submitted our full Report on Compliance ("ROC") on December 30, 2005. The ROC stated that ISS felt Chipotle had controls that were either "in place" or "in place with compensating controls" for every section of the ROC. We are awaiting a response from Visa either accepting our ROC or requesting further clarification.

Failure to receive frequent deliveries of higher-quality food ingredients and other supplies could harm our operations.

        Our ability to maintain our menu depends in part on our ability to acquire ingredients that meet our specifications from reliable suppliers. Shortages or interruptions in the supply of ingredients caused by unanticipated demand, problems in production or distribution, food contamination, inclement weather or other conditions could adversely affect the availability, quality and cost of our ingredients, which could harm our operations. If any of our distributors or suppliers performs inadequately, or our distribution or supply relationships are disrupted for any reason, our business, financial condition, results of operations or cash flows could be adversely affected. We currently depend on three or four suppliers for our pork, chicken and beef supplies. It could be more difficult to replace our pork suppliers if we were no longer able to rely on them due to the unique nature of the products we receive from them. We do not have long-term contracts with any of our suppliers. In addition, we've relied on the McDonald's distribution network. As we begin to increase our independence from McDonald's, we may have to seek new suppliers and service providers. If we cannot replace or engage distributors or suppliers who meet our specifications in a short period of time, that could increase our expenses and cause shortages of food and other items at our stores, which could cause a store to remove items from its menu. If that were to happen, affected stores could experience significant reductions in sales during the shortage or thereafter, if our customers change their dining habits as a result. Our focus on a limited menu would make the consequences of a shortage of a key ingredient more severe.

        In addition, our approach to competing in the restaurant industry depends in large part on our continued ability to adhere to the principle of "food with integrity." We use a substantial amount of naturally raised and sustainably grown ingredients, and try to make our food as fresh as we can, in light of pricing considerations. As we increase our use of these ingredients, the ability of our suppliers to expand output or otherwise increase their supplies to meet our needs may be constrained. Our inability to obtain a sufficient and consistent supply of these ingredients on a cost-effective basis, or at all, could cause us difficulties in aligning our brand with the principle of "food with integrity." That could make us less popular among our customers and cause sales to decline.

Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to various factors.

        Our quarterly operating results may fluctuate significantly because of various factors, including:

•

the impact of inclement weather, natural disasters and other calamities, such as hurricanes Katrina and Rita in 2005;



•

the timing of new store openings and related revenues and expenses;

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•

operating costs at our newly opened stores, which are often materially greater during the first several months of operation;



•

labor availability and wages of store management and crew;



•

profitability of our stores, especially in new markets;



•

changes in comp store sales and customer visits, including as a result of the introduction of new menu items;



•

variations in general economic conditions, including those relating to changes in gasoline prices;



•

negative publicity about the ingredients we use or the occurrence of food-borne illnesses or other problems at our stores;



•

changes in consumer preferences and discretionary spending;



•

increases in infrastructure costs; and



•

fluctuations in supply prices.

        Seasonal factors also cause our profitability to fluctuate from quarter to quarter. Our average store sales are typically lower during the winter months and the holiday season and during periods of inclement weather (because fewer people are eating out) and higher during the spring, summer and fall months (for the opposite reason). Our revenue will also vary as a result of the number of trading days, that is, the number of days in a quarter when a store is open.

        As a result of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year. Average store sales or comp store sales in any particular future period may decrease. In the future, operating results may fall below the expectations of securities analysts and investors. In that event, the price of our common stock would likely decrease.

Our success depends substantially upon the continued retention of certain key personnel.

        We believe that our success has depended and continues to depend to a significant extent on the efforts and abilities of our senior management team. The members of our management team currently are employed by us on an "at-will" basis and may resign from our employment at any time, subject in certain cases to the forfeiture of options or unvested shares they may hold. Our failure to retain members of that team could materially adversely affect our ability to build on the efforts they've undertaken with respect to our business. In particular, the loss of Steve Ells, our founder and Chief Executive Officer, Monty Moran, our President and Chief Operating Officer, Jack Hartung, our Chief Finance and Development Officer, or Bob Wilner, our Chief Administrative Officer, could materially adversely affect us.

Our business could be adversely affected by increased labor costs or difficulties in finding the right teams for our stores.

        Labor is a primary component of our operating costs, and we believe good managers and crew are a key part of our success. We devote significant resources to recruiting and training our store managers and crew. Increased labor costs due to factors like competition, increased minimum wage requirements and employee benefits would adversely impact our operating costs. Our success also depends in part on the energy and skills of our employees and our ability to hire, motivate and keep qualified employees, including especially store managers and crew members. Our failure to find and keep enough employees who are a good fit with our culture could delay planned store openings, result in higher employee turnover or require us to change our culture, any of which could have a material adverse effect on our business and results of operations. Restaurant operators have traditionally experienced relatively high employee turnover rates. Any increase in our turnover rates for managers or crew could be costly.

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Our franchisees could take actions that harm our reputation and reduce our royalty revenues.

        We do not exercise control over the day-to-day operations of our franchised stores. While we try to ensure that franchised stores meet the same operating standards that we demand of company-operated stores, one or more franchised stores may not do so. Any operational shortcomings of our franchised stores are likely to be attributed to our system-wide operations and could adversely affect our reputation and have a direct negative impact on the royalty revenues we receive from those stores.

We expect to need capital in the future, and we may not be able to raise that capital on acceptable terms.

        Developing our business will require significant capital in the future. Prior to our initial public offering, we funded our operations and growth primarily through capital investments by McDonald's and, to a lesser degree, our minority shareholders, and in some cases short-term borrowings from McDonald's that we repaid through private placements of our equity securities. However, McDonald's has no obligation to continue providing us with capital in the future. To meet our capital needs, we expect to rely on our cash flow from operations and the proceeds from our initial public offering. Should we need additional funding, third party financing may not be available on terms favorable to us, or at all. Our ability to obtain additional funding will be subject to various factors, including market conditions, our operating performance, lender sentiment and our ability to incur debt in compliance with then-existing contractual restrictions. These factors may make the timing, amount, terms and conditions of additional financings unattractive. Our inability to raise capital could impede our growth.

We're subject to all of the risks associated with leasing space subject to long-term non-cancelable leases and, with respect to the real property that we own, owning real estate.

        Our leases generally have initial terms of between five and 20 years, and generally can be extended only in five-year increments (at increased rates) if at all. All of our leases require a fixed annual rent, although some require the payment of additional rent if store sales exceed a negotiated amount. Generally, our leases are "net" leases, which require us to pay all of the cost of insurance, taxes, maintenance and utilities. We generally cannot cancel these leases. Additional sites that we lease are likely to be subject to similar long-term non-cancelable leases. If an existing or future store is not profitable, and we decide to close it, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term. In addition, as each of our leases expires, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could cause us to close stores in desirable locations. Also, because we purchase real property for various store locations from time to time, we're subject to all of the risks generally associated with owning real estate, including changes in the investment climate for real estate, demographic trends and supply or demand for the use of the stores, which may result from competition from similar restaurants in the area as well as strict, joint and several liability for environmental contamination at or from the property, regardless of fault.

Governmental regulation may adversely affect our ability to open new stores or otherwise adversely affect our existing and future operations and results.

        We are subject to various federal, state and local regulations. Each of our stores is subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food and workplace safety and other agencies. We may experience material difficulties or failures in obtaining the necessary licenses or approvals for new stores, which could delay planned store openings. In addition, stringent and varied requirements of local regulators with respect to zoning, land use and environmental factors could delay or prevent development of new stores in particular locations.

        We are subject to the U.S. Americans with Disabilities Act and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations

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and other areas. We may in the future have to modify stores, for example by adding access ramps or redesigning certain architectural fixtures, to provide service to or make reasonable accommodations for disabled persons. The expenses associated with these modifications could be material.

        Our operations are also subject to the U.S. Fair Labor Standards Act, which governs such matters as minimum wages, overtime and other working conditions, along with the U.S. Americans with Disabilities Act, family leave mandates and a variety of similar laws enacted by the states that govern these and other employment law matters. In addition, federal proposals to introduce a system of mandated health insurance and flexible work time and other similar initiatives could, if implemented, adversely affect our operations.

        In recent years, there has been an increased legislative, regulatory and consumer focus on nutrition and advertising practices in the food industry. Restaurants operating in the quick-service and fast-casual segments have been a particular focus. As a result, we may in the future become subject to initiatives in the area of nutrition disclosure or advertising, such as requirements to provide information about the nutritional content of our food, that could increase our expenses.

        We are subject to federal, state and local environmental laws and regulations concerning the discharge, storage, handling, release and disposal of hazardous or toxic substances ("environmental laws"). These environmental laws provide for significant fines, penalties and liabilities, sometimes without regard to whether the owner or operator of the property knew of, or was responsible for, the release or presence of the hazardous or toxic substances. Third parties may also make claims against owners or operators of properties for personal injuries and property damage associated with releases of, or actual or alleged exposure to, such substances. We cannot predict what environmental laws will be enacted in the future, how existing or future environmental laws will be administered or interpreted, or the amount of future expenditures that we may need to make to comply with, or to satisfy claims relating to, environmental laws. We have not conducted a comprehensive environmental review of our properties or operations. We have, however, conducted investigations of some of our properties and identified contamination caused by third-party operations which we believe have or should be addressed by the third party. If the relevant third party does not or has not addressed the identified contamination properly or completely, then under certain environmental laws, we could be held liable as an owner and operator to address any remaining contamination. Any such liability could be material. Further, we may not have identified all of the potential environmental liabilities at our properties, and any such liabilities could have a material adverse effect on our operations or results of operations.

We may not be able to adequately protect our intellectual property, which could harm the value of our brands and adversely affect our business.

        Our intellectual property is material to the conduct of our business. Our ability to implement our business plan successfully depends in part on our ability to further build brand recognition using our trademarks, service marks, trade dress and other proprietary intellectual property, including our name and logos and the unique ambience of our stores. If our efforts to protect our intellectual property are inadequate, or if any third party misappropriates or infringes on our intellectual property, either in print or on the internet, the value of our brands may be harmed, which could have a material adverse effect on our business and might prevent our brands from achieving or maintaining market acceptance. We may also encounter claims from prior users of similar intellectual property in areas where we operate or intend to conduct operations. This could harm our image, brand or competitive position and cause us to incur significant penalties and costs.

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We could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us to material money damages and other remedies.

        Our customers occasionally file complaints or lawsuits against us alleging that we're responsible for some illness or injury they suffered at or after a visit to our stores, or that we have problems with food quality or operations. We're also subject to a variety of other claims arising in the ordinary course of our business, including personal injury claims, contract claims and claims alleging violations of federal and state law regarding workplace and employment matters, discrimination and similar matters, and we could become subject to class action or other lawsuits related to these or different matters in the future. For example, we're currently investigating issues that may arise in connection with the possible theft of certain credit and debit card data. We're also subject to "dram shop" statutes, which generally allow persons injured by intoxicated people to recover damages from the place that wrongfully served those people alcohol. Regardless of whether any claims against us are valid, or whether we're ultimately held liable, claims may be expensive to defend and may divert time and money away from our operations and hurt our performance. A judgment significantly in excess of our insurance coverage for any claims could materially and adversely affect our financial condition or results of operations. Any adverse publicity resulting from these allegations may also materially and adversely affect our reputation or prospects, which in turn could adversely affect our results.

        In addition, the restaurant industry has been subject to a growing number of claims based on the nutritional content of food products they sell and disclosure and advertising practices. We may also be subject to this type of proceeding in the future and, even if not, publicity about these matters (particularly directed at the quick-service and fast-casual segments of the industry) may harm our reputation or prospects and adversely affect our results.

We will incur increased costs as a result of being a public company.

        As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. The U.S. Sarbanes-Oxley Act of 2002 and related rules of the U.S. Securities and Exchange Commission, or SEC, and the New York Stock Exchange regulate corporate governance practices of public companies. Compliance with the requirements applicable to a public company will increase our costs and make some activities more time-consuming. For example, we have created new board committees and adopted new internal controls and disclosure controls and procedures. In addition, we will incur additional expenses associated with our SEC reporting requirements. A number of those requirements will require us to carry out activities we have not done previously. For example, under Section 404 of the Sarbanes-Oxley Act, for our annual report on Form 10-K for the year ending December 31, 2007, we'll need to document and test our internal control procedures, our management will need to assess and report on our internal control over financial reporting and our independent accountants will need to issue an opinion on that assessment and the effectiveness of those controls. Furthermore, if we identify any issues in complying with those requirements (for example, if we or our accountants identified a material weakness or significant deficiency in our internal control over financial reporting), we could incur additional costs rectifying those issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us. Costs to obtain director and officer liability insurance are generally greater for public companies, and we will incur substantially higher costs to obtain coverage. As a result of the associated liability, it may be more difficult for us to attract and retain qualified persons to serve on our board of directors or as executive officers. Advocacy efforts by shareholders and third parties may also prompt even more changes in governance and reporting requirements. We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

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We're controlled by McDonald's, whose interests may conflict with those of our investors.

        Currently, McDonald's beneficially owns no shares of our class A common stock, but owns about 90% of our outstanding class B common stock, representing 87% of the combined voting power of our outstanding stock and 65% of the economic interest in our outstanding common stock. Accordingly, as it has since 1998 when we became its subsidiary, McDonald's continues to exercise significant influence over our business policies and affairs, including the composition of our board of directors and any action requiring the approval of our shareholders, including the adoption of amendments to our certificate of incorporation, the issuance of additional shares of equity securities, the payment of dividends and the approval of mergers or a sale of substantially all of our assets. The concentration of ownership may also make some transactions, including mergers or other changes in control, more difficult or impossible without the support of McDonald's. McDonald's interests may conflict with your interests as a shareholder.

Conflicts of interest between McDonald's and us could be resolved in a manner unfavorable to us.

        Various conflicts of interest between McDonald's and us could arise. Many of our officers own stock in McDonald's, in some cases it could be more than the amount of Chipotle common stock they own. In addition, one of our directors, Mats Lederhausen, is Managing Director of our controlling shareholder, McDonald's Ventures, LLC. Ownership interests of directors or officers of McDonald's in the common stock of Chipotle, or a person's service as either a director or officer of both companies, could create or appear to create potential conflicts of interest when those directors and officers are faced with decisions that could have different implications for McDonald's and Chipotle. These decisions could, for example, relate to:

•

disagreement over corporate opportunities;



•

competition between us and McDonald's;



•

management stock ownership;



•

employee retention or recruiting;



•

our dividend policy; and



•

the services and arrangements from which Chipotle benefits as a result of its relationship with McDonald's.

        Potential conflicts of interest could also arise if we enter into any new commercial arrangements with McDonald's in the future. Our directors and officers who have interests in both McDonald's and us may also face conflicts of interest with regard to the allocation of their time between McDonald's and Chipotle. Our restated certificate of incorporation includes the following provisions relating to corporate opportunities of us and McDonald's, which provisions will remain in effect for so long as McDonald's owns at least 5% of our outstanding common stock or at least one person who is a director or officer of us is also a director or officer of McDonald's:

•

McDonald's will not have a duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us, and neither McDonald's nor any of its officers or directors will be liable to us or our shareholders for breach of any duty by reason of any such activities.



•

If McDonald's acquires knowledge of a potential transaction or matter that may be a corporate opportunity for McDonald's and us, McDonald's will have no duty to communicate or offer such corporate opportunity to us and will not be liable to us or our shareholders for breach of any duty as our shareholder if McDonald's pursues or acquires such corporate opportunity for itself,

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directs such corporate opportunity to another person or entity, or does not communicate information about, or offer, such corporate opportunity to us.

•

if a corporate opportunity is offered to:



•

one of our officers or employees who is also a director (but not an officer or employee) of McDonald's, that opportunity will belong to us unless expressly offered to that person primarily in his or her capacity as a director of McDonald's, in which case it will belong to McDonald's;



•

one of our directors who is also an officer or employee of McDonald's, that opportunity will belong to McDonald's unless expressly offered to that person primarily in his or her capacity as our director, in which case it will belong to us; and



•

any person who is either (i) an officer or employee of both us and McDonald's or (ii) a director of both us and McDonald's (but not an officer or employee of either one), that opportunity will belong to McDonald's unless expressly offered to that person primarily in his or her capacity as our director, in which case such opportunity shall belong to us.

        Prior to our initial public offering, our tax allocation agreement with McDonald's provided that McDonald's, as our parent, had the sole authority to file federal income tax returns and most state income tax returns on our behalf and that McDonald's would be responsible for administering that agreement until the consummation of the initial public offering. This arrangement terminated for federal and some state income tax purposes for taxable periods following the initial public offering. However, the tax allocation agreement remains in effect for taxable years prior to the initial public offering and for some state returns. Consequently, this may result in conflicts of interest between McDonald's and us. For example, McDonald's may choose to contest, compromise or settle any adjustment or deficiency proposed by the relevant taxing authority in a manner that may be beneficial to McDonald's and detrimental to us and for which we may be required to reimburse McDonald's under the tax allocation agreement. The tax allocation agreement will continue to apply to, and govern, the sharing of tax liabilities between McDonald's and us for state tax purposes for those states in which we and McDonald's will continue to file tax returns on a combined basis.

Future sales or distributions of our shares by McDonald's could depress our class A common stock price.

        After the initial public offering, and subject to the currently applicable lock-up period described below, McDonald's may sell all or a portion of the shares of our class B common stock that it owns (which shares would be converted automatically into class A shares in connection with any sale prior to a tax-free distribution) or distribute those shares to its shareholders, including a distribution in exchange for McDonald's shares or securities (or another similar transaction). Sales by McDonald's in the public market or distributions to its shareholders of substantial amounts of our common stock, or the filing by us on behalf of McDonald's of a registration statement relating to a substantial amount of our common stock, could depress our class A common stock price. McDonald's has informed us that, at some time in the future, but no earlier than the expiration of the lock-up period, it may sell all or a portion of its ownership interest in us or may make a tax-free distribution, including a distribution in exchange for McDonald's shares or securities (or another similar transaction), to its shareholders of all or a portion of that interest. McDonald's is not subject to any contractual obligation to maintain its ownership position in our shares, except that it has agreed not to sell or otherwise dispose of any of our shares of common stock for a period ending 180 days (subject to extension) after the effective date of initial public offering without the prior written consent of Morgan Stanley & Co. Incorporated and SG Cowen & Co., LLC, on behalf of the underwriters, subject to specified limited exceptions and extensions. Consequently, McDonald's may decide not to maintain its ownership of our common stock once the lock-up period expires.

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        In addition, McDonald's will have the right, subject to some conditions, to require us to file registration statements covering its shares or to include its shares in other registration statements that we may file. Should McDonald's exercise their registration rights and sell a large number of shares, the price of our class A common stock might decline.

ITEM 2. PROPERTIES

        As of December 31, 2005, we and our franchisees operated 489 stores. The table below sets forth the locations (by state) of Chipotle stores in operation.

Arizona		21
California		67
Colorado		55
District of Columbia		6
Florida		14
Georgia		10
Illinois		47
Indiana		6
Kansas		12
Kentucky		5
Maryland		21
Minnesota		36
Missouri		8
Nebraska		6
Nevada		5
New York		13
Ohio		60
Oregon		5
Texas		60
Virginia		20
Washington		4
Wisconsin		8
	Total	489	(1)

(1)

Includes two franchised stores in Illinois, two in Missouri and four in Ohio.

        Of our stores in operation as of December 31, 2005, we had 118 free-standing units, 276 end-cap locations, 86 in-line locations and nine in malls. The average free-standing store seats about 100 customers while the average in-line or end-cap store seats about 65 customers. Our average store size is about 2,700 square feet. Most of our stores also feature outdoor patio space.

        Our main office is located at 1543 Wazee Street, Suite 200, Denver, Colorado, and our telephone number is (303) 595-4000. We lease our main office and substantially all of the properties on which we operate stores. For additional information regarding the lease terms and provisions, see Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations."

        We own nine properties and operate stores on all of them.

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ITEM 3. LEGAL PROCEEDINGS

        We're involved in various claims and legal actions that arise in the ordinary course of business. We do not believe that the ultimate resolution of these actions will have a material adverse effect on our financial position, results of operations, liquidity or capital resources. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims could materially and adversely affect our business, financial condition, results of operation and cash flows.

        In addition, we're involved in claims relating to the possible theft of our customers' credit and debit card data. Through the end of February 2006, we have received claims through the acquiring bank with respect to fewer than 2,000 purportedly fraudulent credit and debit card charges allegedly arising out of this matter in an aggregate amount of about $1.3 million. We've also incurred $1.3 million of expense in connection with fines imposed by the Visa and MasterCard card associations on the acquiring bank. In 2004, we recorded charges of $4.0 million to establish a reserve for claims seeking reimbursement for purportedly fraudulent credit and debit card charges, the cost of replacing cards, monitoring expenses and fees, and fines imposed by Visa and MasterCard. All of the reimbursement claims are being disputed, although we've not formally protested all of the charges. As of December 31, 2005, after charging these expenses against the reserve, the remaining reserve was $1.8 million, which does not take into account an unpaid fine of $0.4 million assessed by MasterCard in December 2005 that we expect to apply against the reserve in 2006. In addition to the reserve, we've also incurred about $1.5 million of additional expenses in this matter, including $1.3 million for legal fees, bringing our total expense relating to this matter to $5.5 million. We have not reserved any additional amounts to date in 2006.

        We may in the future become subject to additional claims for purportedly fraudulent transactions arising out of this matter. We have no way to predict the level of claims or the number or nature of proceedings that may be asserted against us, nor can we quantify the costs that we may incur in connection with investigating, responding to and defending any of them. If we litigate these matters, we may not be able to defend against penalties successfully. The ultimate outcome of this matter could differ materially from the amounts we've recorded in our reserve and could have a material adverse effect on our financial results and condition. See Item 1A "Risk Factors—We may have experienced a security breach with respect to certain customer credit and debit card data, and we've incurred and may continue to incur substantial costs as a result of this matter. We may also incur costs resulting from other security risks we may face in connection with our electronic processing and transmission of confidential customer information."

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        There were no matters submitted to a vote of security holders of Chipotle Mexican Grill, Inc. through solicitation of proxies or otherwise during the fourth quarter of the Company's fiscal year ended December 31, 2005.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for Chipotle Common Stock

        Our Class A common stock trades on the New York Stock Exchange under the symbol "CMG". Trading of our common stock commenced on January 26, 2006, following the completion of our initial public offering. Prior to that date, there was no public market for our common stock. As of March 9, 2006, there were approximately 11,000 holders of record of our Class A common stock. Our Class B common stock does not trade on a public market. As of March 9, 2006, there were approximately 50 holders of record of our Class B common stock. No cash dividends have been declared to date. Computershare Investor Services, LLC. is the transfer agent and registrar for our common stock.

Recent Sales of Unregistered Securities

        In May 2005, we issued 153,333 shares of non-vested common stock to Mr. Montgomery Moran pursuant to a Restricted Stock Agreement dated March 24, 2005 executed in connection with Mr. Moran's offer of employment by us. The shares vest in equal annual installments over three years from his date of employment, subject to his continued employment with us. In connection with this issuance, we recognized $1.4 million of related compensation expense during the year ended December 31, 2005. This transaction was effected without registration under the Securities Act in reliance on the exemption from registration provided under Section 4(2) promulgated thereunder.

Dividend Policy

        We are not required to pay any dividends and no cash dividends have been declared on our common stock as of March 9, 2006. We intend to continue to retain earnings for use in the operation and expansion of our business and therefore do not anticipate paying any cash dividends on our common stock in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

        As of the effective date of the initial public offering, all options outstanding under the following compensation plans became options to purchase shares of our Class A common stock. The following table presents information regarding options and rights outstanding under our compensation plans as of December 31, 2005, on a pro forma basis reflecting the conversion of options described in the preceding sentence.

		(a) Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights	(b) Weighted-Average Exercise Price of Outstanding Options and Rights		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))
Equity Compensation Plans Approved by Security Holders:
	Chipotle Executive Stock Option Plan	225,000	$	16.23	775,000
	Chipotle Stock Appreciation Rights Plan	148,467	$	22.35	—
Equity Compensation Plans Not Approved by Security Holders:
	None.

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Use of Proceeds from Sale of Registered Securities

        On January 26, 2006 we commenced our initial public offering of our Class A common stock, $0.01 par value, pursuant to our Registration Statement on Form S-1, as amended (Reg. No. 333-129221) that was declared effective on January 25, 2006. We registered 9,060,606 shares of Class A Common Stock at a maximum offering price of $181.2 million pursuant to the registration statement, all of which were sold in the offering at a per share price of $22.00 for an aggregate offering price of $199.3 million. McDonald's sold 3,000,000 shares as a selling shareholder and we sold 6,060,606 shares in the offering. The managing underwriters in the offering were Morgan Stanley and SG Cowen & Co.

        The net proceeds received by us in the offering were $121.3 million, determined as follows (in millions):

Aggregate offering proceeds to the Company	$	133.3
Underwriting discounts and commissions		9.3
Finders fee		—
Other fees and expenses		2.7
Total expenses		12.0
Net proceeds to the Company	$	121.3

None of the underwriting discounts and commissions or offering expenses were incurred or paid to our directors or officers or their associates or to persons owning 10 percent or more of our common stock or to any affiliates of ours. The net proceeds to us from the offering are expected to be used by us to provide additional long-term capital to support the growth of our business (primarily through opening new stores), maintenance of our existing stores and for general corporate purposes.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

        Our selected consolidated financial data shown below should be read together with our Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and respective notes included in Item 8 "Financial Statements and Supplementary Data". The selected consolidated statements of operations data for the years ended December 31, 2005, 2004 and 2003 and the consolidated balance sheet data as of December 31, 2005 and 2004 have been derived from our audited consolidated financial statements included in Item 8 "Financial Statements and Supplementary Data". Our consolidated financial statements for the years ended December 31, 2005, 2004 and 2003 have been audited and reported upon by Ernst & Young LLP, an independent registered public accounting firm. The selected consolidated statements of operations data for the year ended December 31, 2002 and the consolidated balance sheet data as of December 31, 2003 and 2002 have been derived from audited financial statements not included in this report. The selected consolidated statements of operations data for the year ended December 31, 2001 and the consolidated balance sheet data as of December 31, 2001 have been derived from unaudited

23

financial statements not included in this report. The data shown below are not necessarily indicative of results to be expected for any future period (in thousands, except per share data).

		For the years ended December 31,
		2005			2004			2003			2002			2001
Statements of Operations:
Revenue
	Restaurant sales	$	625,077		$	468,579		$	314,027		$	203,892		$	131,331
	Franchise royalties and fees		2,618			2,142			1,493			753			267
Total revenue			627,695			470,721			315,520			204,645			131,598
Food, beverage and packaging costs			202,288			154,148			104,921			67,681			45,236
Labor costs			178,721			139,494			94,023			66,515			46,048
Occupancy costs			47,636			36,190			25,570			18,716			11,742
Other operating costs			82,976			64,274			43,527			29,791			21,553
General and administrative expenses			51,964			44,837			34,189			25,803			20,687
Depreciation and amortization			28,026			21,802			15,090			11,260			8,730
Pre-opening costs			1,971			2,192			1,631			1,022			2,245
Loss on disposal of assets			3,119			1,678			4,504			1,489			79
Total costs and expenses			596,701			464,615			323,455			222,277			156,320
Income (loss) from operations			30,994			6,106			(7,935	)		(17,632	)		(24,722	)
Interest income			36			211			249			444			735
Interest expense			(790	)		(191	)		(28	)		(101	)		(13	)
Income (loss) before income taxes			30,240			6,126			(7,714	)		(17,289	)		(24,000	)
Benefit for income taxes(1)			7,456			—			—			—			—
Net income (loss)		$	37,696		$	6,126		$	(7,714	)	$	(17,289	)	$	(24,000	)
Earnings (loss) per common share(2)
	Basic	$	1.43		$	0.24		$	(0.34	)	$	(0.87	)	$	(1.49	)
	Diluted	$	1.43		$	0.24		$	(0.34	)	$	(0.87	)	$	(1.49	)
Shares used in computing earnings (loss) per common share(2)
	Basic		26,281			25,454			22,384			19,931			16,063
	Diluted		26,374			25,520			22,384			19,931			16,063

	As of December 31,
	2005		2004		2003		2002		2001
Balance Sheet Data:
Total current assets	$	17,824	$	10,332	$	7,833	$	20,221	$	10,819
Total assets	$	392,495	$	329,653	$	249,014	$	194,172	$	146,403
Total current liabilities	$	41,982	$	38,663	$	38,266	$	20,806	$	14,913
Total liabilities	$	83,141	$	67,087	$	57,506	$	32,918	$	22,706
Total shareholders' equity	$	309,354	$	262,566	$	191,508	$	161,254	$	123,697

(1)

During the year ended December 31, 2005, we determined that it was more likely than not that we would realize our deferred tax assets and we reversed our valuation allowance of $20.3 million, resulting in a non-recurring tax benefit. The current tax provision consists of tax expense of $12.8 million resulting in a net tax benefit of $7.5 million recognized in our results of operations.

(2)

Earnings (loss) per common share and shares used in computing earnings (loss) per common share reflect the effect of the reclassification of all outstanding shares of preferred stock and common

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stock into one-third share of class B common stock (the "Reclassification") as discussed more thoroughly in Note 1 to the consolidated financial statements included in Item 8 "Financial Statements and Supplementary Data."

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion together with Item 6 "Selected Consolidated Financial Data" and our consolidated financial statements and related notes included in Item 8 "Financial Statements and Supplementary Data". The discussion contains forward-looking statements involving risks, uncertainties and assumptions that could cause our results to differ materially from expectations. Factors that might cause such differences include those described in Item "1A Risk Factors" under the discussion—Cautionary Note Regarding Forward-Looking Statements, and elsewhere in this report.

Overview

How We Make Money: Restaurant Sales

        We operate fast casual, fresh Mexican food restaurants in 21 states throughout the United States and in the District of Columbia. As of December 31, 2005, we operated 481 restaurants and had eight restaurants operated by franchisees. We generate revenue primarily through restaurant sales, which represent sales of food and drinks in stores operated by Chipotle. Our total revenue was $627.7 million in 2005, a 33.3% increase from 2004 and a 98.9% increase from 2003, driven primarily by the 260 new store openings from January 1, 2003 to December 31, 2005 and higher average store sales. Several factors affect our restaurant sales in any period, including mainly the number of stores in operation and average store sales. We define average store sales as the average trailing 12-month sales for company-owned stores in operation for at least 13 months.

        New stores in existing and new markets have contributed substantially to our restaurant sales growth in the last three years. We opened 80, 104 and 76 stores in 2005, 2004 and 2003, respectively. We intend to open 80 to 90 stores in 2006, primarily in existing markets, although we do expect to enter several new markets in 2006. We categorize our stores as either end-caps (at the end of a line of stores), in-lines (in a line of stores), free-standing or urban. As we expand into central urban areas, our average costs to open new stores will increase due to more significant reconstruction work that often needs to be done on those sites. In 2005, we spent on average about $910,000 in development and construction costs per store, with end-caps costing about $730,000, in-lines costing about $765,000, free-standing costing about $1.2 million and urban costing about $1.3 million (in each case, reduced for landlord reimbursements received and excluding rent expense incurred during the construction period). Pre-opening cash rent expenses averaged approximately $18,000 per restaurant during 2005 (excluding approximately $24,000 per restaurant in pre-opening straight-line rent during construction.)

        Average store sales for stores open at least 12 full months were $1.440 million in 2005, $1.361 million in 2004 and $1.274 million in 2003. There are two main factors increasing our average store sales: comp store sales increases, which we define as year-over-year sales comparisons for stores in operation for at least 12 full months (disregarding the portion of a month in which a store first begins operating) and increases in new store opening sales. We believe both of these have been impacted by the growing appeal of our core menu items, increasing consumer awareness and appreciation of our food quality and our focus on building customer loyalty.

        Our comp store sales increases were 10.2% in 2005, 13.3% in 2004 and 24.4% in 2003. Comp store sales reflect positive period-to-period growth due mainly to an increase in the number of customer transactions. In the third quarter of 2005, we began an initiative we call "through put," which focuses our efforts on improving the customer service time by getting the right crew, at the right stations, at the right time, doing the right things in the right order. We think the crew at our best performing through

25

put restaurants are more attentive and more engaging with customers while also serving them more quickly. Increases in new store opening sales have occurred primarily because the time it takes a new store's sales to ramp up has shortened as our brand awareness has grown.

        We expect our average stores sales to continue to increase in 2006 driven by comp store sales in the mid to high single digits. We believe that comp store sales likely will not continue to increase at the rates achieved over the past several years. However, we also expect to grow income from operations in the long-term at an annual rate of around 25%.

How We Spend Money: Food, Beverage and Packaging Costs, Labor, Other Restaurant Operating Costs and Other Expenses

        We have four basic types of expense: food, beverage and packaging costs; labor; other restaurant operating costs (consisting of occupancy costs and other operating costs); and other expenses (consisting of general and administrative expenses, depreciation and amortization, pre-opening costs, and gains or losses on asset disposals). As we have grown considerably so have these costs. Our combined food, beverage and packaging costs, labor and other restaurant operating costs have increased to $511.6 million in 2005 from $394.1 million in 2004 and $268.0 million in 2003. Our other expenses have also increased to $85.1 million in 2005 from $70.5 million in 2004 and $55.4 million in 2003.

        Food, beverage and packaging costs are the largest component of our expenses. Since we use higher-quality ingredients that we purchase from carefully selected suppliers, and are increasing our use of more expensive, naturally raised and sustainably grown ingredients, our food expenses are often higher than those of other restaurants that use a higher proportion of commodity-priced ingredients. Beef, chicken, cheese, avocados, beans, tomatoes and pork account for the most significant portion of our food, beverage and packaging costs. The price of these ingredients are the most volatile factor of our cost structure. We expect to continue to try to absorb short-term commodity fluctuations without increasing prices which could negatively impact margins.

        Our food, beverage and packaging costs also include freight costs, which can be higher than those of some of our competitors in part because we rely primarily on perishable ingredients rather than on processed food products. These freight costs have also been affected by higher diesel prices that have in some cases resulted in the imposition of surcharges on the delivery of commodities to our distributors, which they have generally passed on to us to the extent permitted under our arrangements with them.

        Labor costs, which include wages for our store managers, assistant store managers and crew, bonuses, taxes and benefits, are the second-largest component of our expenses. We generally have two shifts at most of our stores, which helps us better predict our store payroll expenses and in return provides our employees with more stable and predictable work hours. Some of the benefits we offer to our hourly employees are uncommon, such as English and Spanish lessons, free food and the opportunity to participate in our 401(k) plan. In addition to the benefits above, we are also in the early stages of implementing our new "Restaurateur" program which will be offered to our top performing managers and will provide for bonuses as a percentage of incremental sales above a threshold subject to a certain level of incremental profits being generated. This program will also provide for incentive payouts for hiring and developing other successful General Managers. Although this program may increase our labor costs in the short-term, we believe that it will help us in the long-term with the development and retention of great General Managers for our stores.

        Other restaurant operating costs include occupancy costs and other operating costs. Occupancy costs include rent, real estate taxes, property taxes and common area maintenance charges. Other operating costs include utilities, marketing and promotional costs (including free samples), bank fees, credit and debit card processing fees, store supplies, repair, maintenance and similar costs. One of the

26

unique employee benefits included in other operating costs is our company car program, which is available to store managers who have been with us for more than four years. Although this and other similarly uncommon benefits may increase our other operating costs, we believe it helps us to attract and keep good store managers, which is important to our future success.

        Our other expenses include general and administrative expenses, depreciation and amortization, pre-opening costs and gains or losses on disposals of assets. General and administrative expenses include the corporate and administrative functions that support our stores, including employee wages and benefits, travel, information systems, recruiting and training costs, corporate rent, professional fees, supplies and insurance and also include costs for store accounting services we received from McDonald's. Depreciation and amortization are periodic non-cash charges that represent the reduction in usefulness and value of a tangible asset, principally relating to capital expenditures for store construction. Pre-opening expenses are expenses related to preparing to open a new store, and include the costs of hiring and training the initial work force, travel and the cost of food, beverage and packaging used in connection with those activities. Losses on disposal of assets include the costs related to store closures, store equipment retirements and costs to investigate potential store sites that we considered but subsequently rejected.

Other Factors Affecting Our Results

Benefit for Income Taxes

        During 2005, we determined that it was more likely than not that we would realize our deferred tax assets and we reversed our valuation allowance, recognizing a non-recurring $20.3 million tax benefit. Tax expense for the year ended December 31, 2005 was $12.8 million resulting in a net tax benefit of $7.5 million being recognized in the consolidated statement of operations. We expect to continue to incur tax expense in 2006.

Equity Compensation Expenses

        We recognized a total of $2.1 million in stock-based compensation during the year ended December 31, 2005 under Statement of Financial Accounting Standards ("SFAS") No. 123R, Share-Based Payment ("SFAS 123(R)"). We adopted SFAS 123(R) effective January 1, 2005, before its required date of adoption, using the modified-prospective transition method. Under this transition method, our 2005 equity compensation costs of $0.3 million related to our stock option plan includes the portion vesting in the year for (i) all share-based payments granted prior to, but not vested as of January 1, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123 Accounting for Stock-based Compensation ("SFAS 123"); and (ii) all share-based payments granted after January 1, 2005, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R).

        In 2005, we granted 153,333 shares of our common stock with a grant date fair value of $19.50 per share, which vest in equal installments over three years, and recognized $1.4 million of related compensation expense. The fair value of the non-vested stock was estimated by management. We did not obtain a contemporaneous valuation by an unrelated valuation specialist. Instead, management's valuation framework relied principally on data compiled as a part of its review of strategic options in early 2005, prior to our determination to proceed with our initial public offering. Because that data reflected market conditions contemporaneous with the grant of the non-vested common stock, as well as our then-current projections of our results and financial condition, management concluded that retention of a separate valuation specialist for purposes of the grant was not necessary.

        Determining the fair value of our common stock required making complex and subjective judgments, particularly since there was no public trading market for our common stock at the time of the valuation. We used the market approach to estimate the value of the enterprise when the

27

non-vested common stock was granted. The market approach uses direct comparisons to other enterprises and their equity securities to estimate the fair value of privately issued securities. We relied primarily on the price to earnings methodology and compared our historical and forecasted income growth rate to determine our peer group within the high-growth restaurant industry and, subsequently, the appropriate earnings multiple range to apply to our forecasted income in determining our value. We then reduced this by a marketability discount due to the lack of liquidity for our common stock.

        In connection with our initial public offering, we converted our outstanding stock appreciation rights ("SARs") granted in 2004 which were accounted for as a liability into stock options. The options have terms consistent with the original SARs, including the same vesting schedule (vest in full in July 2007) and an exercise price of $22.35 per share. In January 2006, we compared the fair value of the SARs immediately before that conversion to the fair value of the options and recognized compensation costs of approximately $0.2 million. Once converted, the options are accounted for as an equity award.

        In connection with our initial public offering, we completed a one-time, broad based grant of 774,150 options to purchase common stock. As a result, we expect total stock-based compensation expense of approximately $3.5 million to $4.0 million in 2006.

Certain Trends and Uncertainties

Relationship with McDonald's

        Since we became a subsidiary of McDonald's and began substantially expanding our operations in 1998, McDonald's has provided a significant portion of the capital needed to operate our business and open new stores. Generally, McDonald's has done this through direct equity investments, although it has also in some cases provided us with short-term borrowings that we repaid through private placements of our equity securities. We expect that McDonald's will no longer finance us after our initial public offering, and we'll fund our growth with cash flow from operations, proceeds from the initial public offering and other sources.

        We also currently benefit from our McDonald's relationship in other ways, such as pricing benefits for some products and services. We will incur increased costs as a result of our initial public offering and the decrease in McDonald's ownership interest in us, and if McDonald's ownership interest declines significantly from their current ownership position, we'll lose an increasing amount of these benefits. See Item 1A "Risk Factors—Risks Related to Our Business and Industry—As we increase our independence from McDonald's, we may face difficulties replacing services it currently provides to us and entering into new or modified arrangements with existing or new suppliers or service providers." For example:

•

McDonald's relationship with Coca-Cola has helped us contain our beverage costs and we may lose some of that pricing advantage if we are no longer a consolidated subsidiary of McDonald's or we may have to negotiate with other beverage suppliers to remain competitive;



•

As a separate public company we'll incur legal, accounting and other expenses, which we expect to be a few million dollars in each of 2006 and future years, that we did not incur as a majority-owned private subsidiary of McDonald's;



•

we opened 104 stores in 2004, when we were able to use McDonald's real estate personnel and other resources to locate and obtain additional store sites in certain markets. We did not use those resources in 2005 and do not anticipate using them in 2006 or in future years; and



•

we expect that some of our labor costs, such as worker's compensation, will increase as McDonald's ownership interest decreases.

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Sourcing

        Our focus on "food with integrity" has constrained our sourcing flexibility to some extent. We've attempted to be careful in expanding that initiative so that we don't outpace available supply. Some of our ingredients come from small farms that have facilities that must comply with federal or industry standards for classification as natural, and they may face economic or other limits on their growth. We believe that consumers' increasing concern about where and how food is raised, environmental management and animal husbandry will foster demand for these foods, which will in turn attract the interest and capital investment of larger farms and suppliers. That said, we understand that we'll continue to be at the forefront of this trend and must balance our interest in advancing "food with integrity" with our desire to provide great food at reasonable prices. If our focus resonates with consumers, it should improve our sourcing flexibility, although we'd expect that these kinds of ingredients and other raw materials will remain more expensive than commodity-priced equivalents for some time to come.

How We Did: Results of Operations

        As our business grows, as we open more stores and hire more people, our food, beverage, packaging costs, labor and other restaurant operating costs increase. Our operating results for 2005, 2004 and 2003 are expressed as a percentage of total revenue below:

		Year Ended December 31,
		2005		2004		2003
Restaurant sales		99.6	%	99.5	%	99.5	%
Franchise royalties and fees		0.4		0.5		0.5
	Total revenue	100.0		100.0		100.0
Food, beverage and packaging costs		32.2		32.7		33.3
Labor costs		28.5		29.6		29.8
Occupancy costs		7.6		7.7		8.1
Other operating costs		13.2		13.7		13.8
General and administrative expenses		8.3		9.5		10.8
Depreciation and amortization		4.5		4.6		4.8
Pre-opening costs		0.3		0.5		0.5
Loss on disposal of assets		0.5		0.4		1.4
	Total costs and expenses	95.1		98.7		102.5
Income (loss) from operations		4.9		1.3		(2.5	)
Interest income		—		—		0.1
Interest expense		(0.1	)	—		—
Income (loss) before income taxes		4.8		1.3		(2.4	)
Benefit for income taxes		1.2		—		—
Net income (loss)		6.0	%	1.3	%	(2.4	)%

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Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

        The table below presents our operating results for the years ended December 31, 2005 and 2004 and the related period-to-period changes:

	Year Ended December 31,
					Increase/ (Decrease)			% Increase/ (Decrease)
	2005		2004
	(in millions, except percentages)
Restaurant sales	$	625.1	$	468.6	$	156.5		33.4	%
Food, beverage and packaging costs		202.3		154.1		48.1		31.2
Labor costs		178.7		139.5		39.2		28.1
Occupancy costs		47.6		36.2		11.4		31.6
Other operating costs		83.0		64.3		18.7		29.1
General and administrative expenses		52.0		44.8		7.1		15.9
Depreciation and amortization.		28.0		21.8		6.2		28.5
Pre-opening costs		2.0		2.2		(0.2	)	(10.1	)
Loss on disposal of assets		3.1		1.7		1.4		85.9
Net interest expense		0.8		—		0.8		n/m	*
Benefit for income taxes		7.5		—		7.5		n/m	*

*

Not meaningful.

        Restaurant Sales.    Of the $156.5 million increase in restaurant sales, $61.8 million resulted from 103 company-operated stores opened in 2004, $47.4 million was due to an increase in comp store sales increases, and $47.3 million was due to 80 company-operated stores opened in 2005. Average store sales for the trailing 12-month period ended December 31, 2005 increased 5.8% to $1.440 million from $1.361 million for the trailing 12-month period ended December 31, 2004, driven primarily by comp store sales growth of 10.2% that reflected increasing nationwide awareness of our brand, which also enabled new stores to open with higher average sales. A substantial majority of the comp store sales growth was due to an increase in the number of transactions, and the remainder was driven primarily by menu price increases in certain markets.

        Food, Beverage and Packaging Costs.    As a percentage of total revenue, food, beverage and packaging costs decreased due primarily to a decline in raw ingredient costs and menu price increases, partially offset by increased fuel costs.

        Labor Costs.    Labor costs as a percentage of revenue decreased largely due to improved employee efficiency resulting from an increase in the number of transactions, which did not require a corresponding increase in staff, and a gradual improvement over time in staffing our stores with the most appropriate number of crew members for each store.

        Occupancy Costs.    As a percentage of total revenue, occupancy costs decreased due to higher average store sales on a partially fixed cost base. The decrease was partially offset by inflationary pressures on rents and the opening of stores in more expensive locations such as New York City.

        Other Operating Costs.    Other operating costs as a percentage of total revenue declined primarily due to the effect of higher average store sales on a partially fixed-cost base and improvements in store operations over time.

        General and Administrative Expenses.    The increase in general and administrative expenses primarily resulted from hiring more employees as we grew and stock based compensation expense resulting from a stock grant and the adoption of SFAS 123(R). The increase in expense was offset by the $4.0 million charge in 2004 to establish a reserve related to potential credit card liabilities. As a

30

percentage of total revenue, these expenses decreased due primarily to the effect of higher average store sales on a partially fixed-cost base.

        Depreciation and Amortization.    Depreciation and amortization increased primarily due to stores opened in 2005 and in late 2004. As a percentage of total revenue, depreciation and amortization remained relatively consistent at 4.5% in 2005 and 4.6% in 2004.

        Pre-Opening Costs.    Pre-opening costs decreased principally because there were fewer store openings in 2005 than in 2004.

        In October 2005, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. FAS 13-1, Accounting for Rental Costs Incurred during a Construction Period ("FSP 13-1"). FSP 13-1 requires rental costs associated with ground or building operating leases incurred during a construction period to be recognized as expense. FSP 13-1 applies to reporting periods beginning after December 15, 2005. Retroactive application is permitted, but not required. Had FSP 13-1 been effective in 2005, we would have recognized additional pre-opening costs of approximately $4.2 million. We expect pre-opening costs to increase as we begin to recognize this expense in 2006.

        Loss on Disposal of Assets.    The increase in loss on disposal of assets was largely due to additional write-offs associated with investigating potential store sites that we considered but subsequently rejected, as well as write-offs of obsolete equipment as a result of software upgrades.

        Net Interest Expense.    The increase in interest expense (net of interest income) was due to higher average borrowings from McDonald's in 2005 than in the comparable 2004 period, as McDonald's did not make any equity contributions in 2005.

        Benefit for Income Taxes.    During 2005, we determined that it was more likely than not that we would realize our deferred tax assets and we reversed our valuation allowance of $20.3 million. The benefit from the reduction of the valuation allowance was partially offset by our current tax expense of $12.8 million, which resulted in the realization of a net tax benefit of $7.5 million. The $20.3 million tax benefit was a one-time tax benefit and we expect to incur tax expense prospectively.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

        The table below presents our operating results for the years ended December 31, 2004 and 2003 and the related year-to-year changes:

	Year Ended December 31,
					Increase/ (Decrease)			% Increase/ (Decrease)
	2004		2003
	(in millions, except percentages)
Restaurant sales	$	468.6	$	314.0	$	154.6		49.2	%
Food, beverage and packaging costs		154.1		104.9		49.2		46.9
Labor costs		139.5		94.0		45.5		48.4
Occupancy costs		36.2		25.6		10.6		41.5
Other operating costs		64.3		43.5		20.8		47.7
General and administrative expenses		44.8		34.2		10.6		31.1
Depreciation and amortization.		21.8		15.1		6.7		44.5
Pre-opening costs		2.2		1.6		0.6		34.4
Loss on disposal of assets		1.7		4.5		(2.8	)	(62.7	)
Net interest income		—		0.2		(0.2	)	n/m	*

*

not meaningful

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        Restaurant Sales.    Of the $154.6 million increase in restaurant sales, $62.8 million resulted from sales by 103 company-operated stores opened in 2004, $50.1 million resulted from additional sales in 2004 by 74 company-operated stores opened in 2003 and $41.7 million was due to comp store sales increases. A substantial majority of the comp store sales growth was due to an increase in the number of transactions and the remainder was driven primarily by menu price increases in certain markets. Average store sales for 2004 increased 6.8% to $1.361 million from $1.274 million for 2003, driven primarily by comp store sales growth of 13.3% that reflected increasing nationwide awareness of our brand, which also enabled new stores to open with higher average store sales.

        Food, Beverage and Packaging Costs.    As a percentage of total revenue, food, beverage and packaging costs decreased largely driven by a menu price increase that was partially offset by higher chicken, beef, cheese and tomato costs.

        Labor Costs.    Labor costs as a percentage of total revenue decreased largely due to improved employee efficiency resulting from an increase in average store sales, which did not require a corresponding increase in staff.

        Occupancy Costs.    As a percentage of total revenue, occupancy costs decreased primarily as a result of the effect of higher average store sales on a largely fixed-cost base.

        Other Operating Costs.    Other operating costs as a percentage of restaurant sales declined primarily due to the effect of higher average store sales on a partially fixed-cost base.

        General and Administrative Expenses.    The $10.6 million increase in general and administrative expenses primarily resulted from a $4.0 million charge to establish a reserve related to potential credit card liabilities and hiring more employees as we grew. As a percentage of total revenue, these expenses decreased as a result of our ability to further leverage our existing corporate infrastructure over more stores.

        Depreciation and Amortization.    Depreciation and amortization increased primarily due to new stores openings. As a percentage of total revenue, depreciation and amortization decreased primarily due to the effect of higher average store sales on a largely fixed-cost base.

        Pre-Opening Costs.    The increase in pre-opening costs was principally due to the opening of 103 company-operated stores in 2004, an increase of 29 company-operated store openings from 2003.

        Loss on Disposal of Assets.    The decrease in loss on disposal of assets was largely due to a $2.0 million write-off associated with the closing of three stores in 2003.

        Net Interest Income.    The decrease in interest income (net of interest expense) was due to reduced earnings on average excess cash deposits in 2004 as compared to 2003.

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Quarterly Financial Data/Seasonality

        The following table presents consolidated statements of operations data for each of the eight quarters in the period ended December 31, 2005. The operating results for any quarter are not necessarily indicative of the results for any subsequent quarter.

	2005 Quarters Ended
	Mar. 31			June 30			Sept. 30			Dec. 31
	(in millions, except percentages)
Revenue	$	133.4		$	156.3		$	164.7		$	173.3
Operating income		4.4			9.3			9.5			7.7
Net income		2.6			25.7			5.1			4.3
Number of stores opened in quarter		18			17			17			28
Comp store sales growth		4.1	%		9.6	%		11.5	%		14.3	%

	2004 Quarters Ended
	Mar. 31			June 30			Sept. 30			Dec. 31
	(in millions, except percentages)
Revenue	$	101.4		$	117.2		$	124.6		$	127.5
Operating income (loss)		0.7			4.9			4.2			(3.8	)
Net income (loss)		0.5			5.0			4.3			(3.7	)
Number of stores opened in quarter		29			26			21			28
Comp store sales growth		23.2	%		13.2	%		8.9	%		10.4	%

        Seasonal factors cause our profitability to fluctuate from quarter to quarter. Historically, our average store sales are lower in the first and fourth quarters due, in part, to the holiday season and because fewer people eat out during periods of inclement weather (the winter months) than during periods of mild or warm weather (the spring, summer and fall months). Other factors also have a seasonal effect on our results. For example, stores located near colleges and universities generally do more business during the academic year. The number of trading days can also affect our results. For example, 2004 was a leap year, which contributed about 3 percentage points of the increase in our restaurant sales in February of that year. Overall, on a year-to-year basis, changes in trading days do not have a significant impact on our results.

        Our quarterly results are also affected by other factors such as the number of new stores opened in a quarter and unanticipated events. New stores have lower margins immediately following opening as a result of the expenses associated with opening new stores and their operating inefficiencies in the months immediately following opening. Because we tend to open more new stores later in the fiscal year, our fourth quarter net income may be lower than in other quarters. In addition, unanticipated events also impact our results. For example, in the second quarter of 2005, we determined that it was more likely than not that we would realize our deferred tax assets and we reversed our valuation allowance of $20.3 million, resulting in a net tax benefit of $16.7 million in that quarter. In the fourth quarter of 2004, we recorded charges of $4.0 million to establish a reserve for claims seeking reimbursement for purportedly fraudulent credit and debit card charges and for the cost of replacing cards and monitoring expenses and fees, which reduced our operating income. Our loss on disposal of assets in the first quarter of 2004 decreased compared to the same period in 2003 largely due to a $2.0 million write-off associated with the closing of three stores in the first quarter of 2003. Accordingly, results for a particular quarter are not necessarily indicative of results to be expected for any other quarter or for any year.

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Liquidity and Capital Resources

        Our primary liquidity and capital requirements are for new store construction, working capital and general corporate needs. Until our initial public offering, we have financed these requirements primarily through equity sales to McDonald's and others as well as through cash flows from operations. As of December 31, 2005, we had no cash and cash equivalents. On January 25, 2006, our initial public offering became effective. We will use the net proceeds from the offering of approximately $121.3 million to provide additional long-term capital support to the growth of our business (primarily through opening stores), to continue to maintain our existing stores and for general corporate purposes.

        McDonald's and, to a lesser extent, some of our minority shareholders have historically provided us with significant financing. We have also historically obtained short-term borrowings from McDonald's from time to time under documented lines of credit at an interest rate equal to the U.S. prime rate plus 100 basis points. The existing line of credit with McDonald's, (under which there were no borrowings outstanding as of December 31, 2005) will expire in June 2006 and is not expected to be renewed. Loans under these agreements were repaid with proceeds of private placements of our equity securities. In April 2004 and June 2003, we issued shares of common stock to McDonald's and to certain other persons who were accredited investors (consisting of friends and family of our employees and persons having business relationships with us), in each case as identified in our shareholders' agreement, for an aggregate purchase price of $65.0 million and $38.0 million, respectively.

        We haven't required significant working capital because customers pay using cash or credit cards and because our operations do not require significant receivables, nor do they require significant inventories due, in part, to our use of various fresh ingredients. In addition, we generally have the right to pay for the purchase of food, beverage and supplies some time after the receipt of those items, generally within ten days, thereby reducing the need for incremental working capital to support growth.

        Operating Activities.    Net cash provided by operating activities was $77.4 million for 2005 compared to $39.7 million for 2004. The $37.8 million increase was primarily attributable to a $31.6 million improvement in net income driven by higher average store sales and higher store margins due to having significantly more stores in operation. Net cash provided by operating activities was $39.7 million for 2004 compared to $22.1 million for 2003. The $17.6 million increase in 2004 was primarily attributable to a $13.8 million improvement in net income (loss) driven primarily by higher average store sales and higher store margins.

        Investing Activities.    Net cash used in investing activities was $83.0 million for 2005 compared to $95.6 million in 2004. The $12.6 million decrease related to lower capital expenditures in 2005 as we opened 80 stores in 2005, compared with 104 stores in 2004. Net cash used in investing activities was $95.6 million for 2004 compared to $86.1 million for 2003. The increase was primarily as a result of higher capital expenditures as we opened 104 stores in 2004 compared to 76 in 2003.

        Financing Activities.    Net cash provided by financing activities was $5.7 million in 2005 compared to $55.9 million in 2004. The $50.3 million decrease was attributable to decreased financing requirements as a result of improvements in net cash provided by operating activities and fewer store openings in 2005 as compared to 2004. Net cash provided by financing activities was $55.9 million for 2004 compared to $64.0 million for 2003. The decrease in cash provided by financing activities in 2004 was attributable to decreased financing requirements as a result of our improvement in net cash provided by operating activities, which was partially offset by more store openings in 2004.

        Liquidity and Capital Expenditures.    We will use the proceeds from the initial public offering to provide additional long-term capital to support the growth of our business (primarily through opening stores) and to continue to maintain our existing stores and for general corporate purposes. We do not expect McDonald's to provide us with financing in the future; However, in accordance with the tax allocation agreement between McDonald's and Chipotle, McDonald's has agreed to compensate us for

34

any NOLs or tax credits it uses that are attributable to our operations. After McDonald's files its consolidated federal tax return for 2006, the year we departed from the consolidated federal tax return, we expect to receive final payment for the federal and some state NOLs that we have not utilized on a stand-alone basis. At December 31, 2005, the amount owed by McDonald's totaled $28.2 million.

        Our total capital expenditures for 2005 were $83.0 million, and we expect to incur capital expenditures of about $95 million in 2006, relating primarily to our construction of new stores in both periods. We believe that cash from operations, together with the net proceeds from the initial public offering and the reimbursement from McDonald's for use of our NOL's, will be enough to meet ongoing capital expenditures, working capital requirements and other cash needs over at least the next 24 months.

Contractual Obligations

        Our contractual obligations as of December 31, 2005 were as follows:

	Payments Due by Period
	Total		1 year		2-3 years		4-5 years		After 5 years
	(in thousands)
Operating leases	$	778,739	$	45,158	$	89,280	$	88,837	$	555,464
Deemed landlord financing		6,829		310		620		626		5,273
Total contractual cash obligations	$	785,568	$	45,468	$	89,900	$	89,463	$	560,737

        We're obligated under non-cancelable leases for our stores and administrative offices. Our leases generally have initial terms of either five to ten years with two or more five-year extensions, for end-cap and in-line stores, or 15 to 20 years with several five-year extensions, for free-standing stores. Our leases generally require us to pay a proportionate share of real estate taxes, insurance, common charges and other operating costs. Some store leases provide for contingent rental payments based on sales thresholds, although we generally do not expect to pay significant contingent rent on these properties based on the thresholds in those leases. See Item 1A "Risk Factors—Substantially all of our stores are located in leased space that is subject to long-term non-cancelable leases, and we're also subject to all of the risks associated with owning real estate with respect to the real property that we own."

        We have entered into a services agreement with McDonald's pursuant to which they will continue to provide us, for a mutually agreed-upon cost of about $10 to $11 million for the first year, with certain services it has historically provided, including, among others, accounting services, insurance policy coverage and certain welfare plans for our employees. The services agreement became operative on the closing date of the initial public offering, January 31, 2006 and has terms ranging from approximately one or two years depending on the service. Services will renew automatically unless we or McDonald's terminate the services agreement prior to renewal. In addition, we may in the future repurchase Chipotle franchises from our franchisees in connection with their obligation to dispose of either that franchise or their McDonald's franchise within 24 months after relevant triggering events. We are not obligated to repurchase any of these franchises.

Off-Balance Sheet Arrangements

        As of December 31, 2005 and 2004, we had no off-balance sheet arrangements or obligations.

Critical Accounting Policies and Estimates

        We describe our significant accounting policies, including our critical accounting policies, in Note 1 of our consolidated financial statements. Critical accounting policies are those that we believe are both

35

significant and that require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Leasehold Improvements, Property and Equipment

        We state the value of our leasehold improvements, property and equipment, including primarily store equipment, furniture, fixtures and small wares at cost, minus accumulated depreciation and amortization. We calculate depreciation using the straight-line method of accounting over the estimated useful lives of the related assets. We amortize our leasehold improvements using the straight-line method of accounting over the shorter of the lease term (including reasonably assured renewal periods) or the estimated useful lives of the related assets. We generally use estimated useful lives of between three and seven years for equipment; between three and ten years for furniture and fixtures; and between three and 20 years for leasehold improvements and buildings. We expense repairs and maintenance as incurred, but capitalize major improvements and betterments. We make judgments and estimates related to the expected useful lives of these assets that are affected by factors such as changes in economic conditions and changes in operating performance. If we change those assumptions in the future, we may be required to record impairment charges for these assets.

Impairment of Long-Lived Assets

        We review property and equipment, including leasehold improvements, for impairment when events or circumstances indicate these assets might be impaired. We test impairment using historical cash flow and other relevant facts and circumstances as the primary basis for our estimates of future cash flows. We perform this analysis at the store level to determine whether there are any indicators of permanent impairment. In determining future cash flows, we make significant estimates with respect to future operating results of each store over its remaining lease term. If we determine that assets are impaired, we then measure the impairment charge by calculating the amount by which the asset-carrying amount exceeds its fair value, as determined by an estimate of discounted future cash flows. We use estimates and assumptions that are subject to a high degree of judgment in determining asset fair values. If we change those assumptions in the future, we may be required to record impairment charges for these assets.

Goodwill

        Goodwill resulted primarily from McDonald's purchases of interest in Chipotle. Goodwill is not subject to amortization. We do, however, test goodwill for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We completed our most recent impairment test as of November 30, 2005, and determined that there were no impairment losses related to goodwill or other indefinite lived assets. In assessing the recoverability of goodwill, we compared the carrying amount of the Company to its fair value based upon the low end of the proposed initial public offering price range at that time, $15.50. After the effective date of the Company's initial public offering in January 2006, the fair value of the Company will be determined based upon quoted market prices. If we change these estimates in the future, we may be required to record impairment charges for goodwill.

Leases

        We lease most of our store locations. We account for our leases under FASB Statement No. 13, Accounting for Leases ("SFAS 13") and subsequent amendments, which require that our leases be

36

evaluated and classified as operating or capital leases for financial reporting purposes. We recognize rent expense for our operating leases, which have escalating rentals over the term of the lease (which includes reasonably assured renewal options), on a straight-line basis over the lease term. In addition, the lease term is deemed to commence when we take physical possession of the leased property. We currently capitalize the straight-line rent amounts during the period prior to store opening. We will, however, begin expensing these amounts beginning January 1, 2006 as a result of the issuance of FSP 13-1. We use a consistent lease term when calculating depreciation of leasehold improvements, when determining straight-line rent expense and when determining classification of our leases as either operating or capital. Contingent rents are generally amounts we must pay to landlords when we have sales in excess of certain thresholds stipulated in certain store leases and are included in rent expense as they accrue. Some of our leases contain tenant improvement allowances. For purposes of recognizing tenant improvement allowances, we amortize the incentives over their estimated useful lives. For tenant improvement allowances, we also record a deferred rent liability or an obligation on our consolidated balance sheet.

Insurance Liability

        We maintain, or in some cases McDonald's maintains on our behalf, various insurance policies for workers' compensation, employee health, general liability and property damage. Pursuant to those policies, we're responsible for losses up to certain limits for our general liability and property damage insurance and are required to estimate a liability that represents our ultimate exposure for aggregate losses below those limits. This liability is based on our estimates of the ultimate costs to be incurred to settle known claims and claims not reported as of the balance sheet date. Our estimated liability is not discounted and is based on a number of assumptions and factors, including historical trends, actuarial assumptions and economic conditions. If actual trends differ from our estimates, our financial results could be affected.

Income Taxes

        Prior to our initial public offering in January 2006, we were not a separate taxable entity for federal or most state income tax purposes. Consequently, McDonald's included our results of operations in its consolidated federal and state income tax returns for the periods prior to our initial public offering. We will remain in McDonald's consolidated tax returns for some states until their ownership percentage decreases to below 50%. Our tax provision is computed based on a separate return basis. We've accounted for, and currently account for, income taxes in accordance with SFAS No. 109, Accounting for Income Taxes ("SFAS 109"). SFAS 109 established financial accounting reporting standards for the effects of income taxes resulting from an enterprise's activities during the current and preceding years. It requires an asset and liability approach for financial accounting and reporting of income taxes. We recognize deferred tax liabilities and assets for the future consequences of events that have been recognized in our consolidated financial statements or McDonald's tax returns. If the future consequences of differences between financial reporting basis and tax basis of our assets and liabilities result in a net deferred tax asset, we evaluate the probability of our ability to realize the future benefits indicated by that asset. If it is more likely than not that some portion or all of the deferred tax asset will not be realized, we'll record a valuation allowance related to a deferred tax asset. Our ability to realize that net deferred tax asset generally depends on whether we have enough taxable income of an appropriate character within the carry-forward period permitted by the tax law. Unless we have enough taxable income to offset the deductible amounts and carry forwards, the related tax benefits will expire unused. We evaluate both positive and negative evidence in making a determination as to whether it is more likely than not that all or some portion of the deferred tax asset will not be realized, and we measure deferred items based on enacted tax laws. This evaluation requires us to project our taxable income to determine if our income is sufficient to realize the tax assets. The

37

preparation of the projections requires considerable judgment and is subject to change to reflect future events and changes in tax laws.

Reserves/Contingencies for Litigation and Other Matters

        We are involved in various claims and legal actions that arise in the ordinary course of business. These actions are subject to many uncertainties, and we cannot predict the outcomes with any degree of certainty. Consequently, we were unable to ascertain the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of December 31, 2005 and 2004. Once resolved, however, these actions may affect our operating results and cash flows. In addition, we're involved in claims relating to the possible theft of our customers' credit and debit card data. In 2004, we recorded charges of $4.0 million to establish a reserve for claims seeking reimbursement for purportedly fraudulent credit and debit card charges and the cost of replacing cards and monitoring expenses and fees. As of December 31, 2005, the remaining reserve was $1.8 million. As the situation develops and more information becomes available, the amount of the reserve may increase or decrease accordingly. See Item 1A "Risk Factors"—We may have experienced a security breach with respect to certain customer credit and debit card data, and we've incurred and may continue to incur substantial costs as a result of this matter. We may also incur costs resulting from other security risks we may face in connection with our electronic processing and transmission of confidential customer information.

Recent Accounting Pronouncements

        In October 2005, the FASB issued FSP 13-1. FSP 13-1 requires rental costs associated with ground or building operating leases incurred during a construction period to be recognized as expense. FSP 13-1 is effective for reporting periods beginning after December 15, 2005. Retroactive application is permitted, but not required. Had FSP 13-1 been effective, the Company would have recognized additional pre-opening costs of approximately $4.2 million, $3.6 million and $2.5 million for the years ended December 31, 2005, 2004 and 2003, respectively.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

        In addition to risks inherent in our operations, we are exposed to certain market risks. The following discussion provides additional detail regarding our exposure to the risks of changing interest rates and commodity price risks associated with the food products and other operating essentials we purchase that are affected by commodity pricing and therefore subject to price volatility caused by weather, production problems, delivery difficulties and other factors that are beyond our control. This discussion includes an assessment of the potential impact of inflation on our business.

Changing Interest Rates

        We're exposed to interest rate risk through the investment of our cash. Prior to our initial public offering we operated under an agreement with McDonald's whereby they agreed to pay us interest on any excess cash at the 30-day commercial paper rate plus 50 basis points. Changes in interest rates affect the interest income we earn and, therefore, impact our cash flows and results of operations. As of December 31, 2005 and 2004, we had deposited $2.2 million and $0.7 million, respectively, with McDonald's under this agreement, bearing interest at 4.63% and 2.66% on each respective date. Following our initial public offering, we will no longer be maintaining our excess cash with McDonald's. With the proceeds received from our initial public offering, we intend to invest in short-term marketable securities. We will be subject to market risk on those short-term investments.

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Commodity Price Risks

        We're also exposed to commodity price risks. Many of the ingredients we use to prepare our food, as well as our packaging materials, are commodities that are affected by weather, seasonality and other factors outside our control. In 2003, our food expense was affected by higher avocado prices reflecting a poor growing season due to inclement weather and pestilence. In 2004, prices for chicken rose significantly due to a ban by Asian countries on their chicken exports following outbreaks of avian flu. The more limited worldwide chicken supply, combined with continued high demand, drove prices upward. Beef prices have also been higher in the past year due to U.S. restrictions on Canadian imports in the wake of incidents of "mad cow" disease in Canadian cattle herds. Weather is also a factor, especially when severe conditions limit the growing season or crop quality. This happened in 2004, when hurricanes in some parts of the United States damaged tomato crops and drove prices higher.

        We work closely with our suppliers and use a mix of forward pricing protocols under which we agree with our supplier on fixed prices for deliveries at sometime in the future, fixed pricing protocols under which we agree on a fixed price with our supplier for the duration of that protocol, and formula pricing protocols under which the prices we pay are based on specified formula related to the prices of the goods, such as spot prices. Though we do not have long-term supply contracts or guaranteed purchase amounts, our pricing protocols with suppliers can remain in effect for periods ranging from one month to a year, depending on the outlook for prices of the particular ingredient. We also sometimes buy supplies at current market or spot prices. We've tried to increase, where necessary, the number of suppliers for our ingredients, which we believe can help mitigate pricing volatility, and we follow industry news, trade issues, weather, crises and other world events that may affect supply prices. Long-term increases in ingredient prices could adversely affect our future results if we could not increase menu prices at the same pace for competitive or other reasons. Similarly, if we believe the ingredient price increase to be short in duration we may choose not to pass on the cost increases, which could adversely affect our short-term financial results.

Inflation

        Over the past five years, inflation has not significantly affected our operating results. The impact of inflation could, however, significantly affect our operations in the following ways:

•

Food, beverage and packaging costs as a percentage of revenue has fluctuated in the past, generally in response to changes in availability of our main ingredients. Based on current market conditions, we believe that the cost of our main ingredients should not experience significant volatility, except for short-term chicken prices, which have increased as a result of the damage to chicken farms caused by hurricane Katrina. In addition, diesel prices could also experience further increases as a result of the shut-down of several oil refineries by hurricanes Katrina and Rita, which could cause our other ingredient costs to increase.



•

We pay many of our crew members hourly rates related to the applicable federal or state minimum wage (although all of our crew members make more than the minimum wage). Our workers' compensation and health insurance costs have been and are subject to continued inflationary pressures.



•

Costs for construction, taxes, repairs, maintenance and insurance are all subject to inflationary pressures and impact our occupancy costs.

        In some markets, inflation rates may be higher than the national average.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

40

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of
Chipotle Mexican Grill, Inc.

        We have audited the accompanying consolidated balance sheets of Chipotle Mexican Grill, Inc. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders' equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chipotle Mexican Grill, Inc. and subsidiaries as of December 31, 2005 and 2004, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

        As discussed in the Notes to the consolidated financial statements, effective January 1, 2005, the Company changed its method for accounting for share-based compensation to conform with SFAS No. 123(R), Share-Based Payments.

/s/ Ernst & Young LLP

Denver, Colorado
March 14, 2006

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Chipotle Mexican Grill, Inc.

Consolidated Balance Sheet

(in thousands, except per share data)

		December 31
		2005			2004
Assets
Current assets:
	Cash	$	61		$	—
	Accounts receivable, net of allowance for doubtful accounts of $308 and $804 as of December 31, 2005 and 2004, respectively		1,933			2,490
	Notes receivable—McDonald's Corp.		2,248			732
	Inventory		2,625			2,256
	Current deferred tax assets		2,346			—
	Prepaid expenses		8,611			4,854
Total current assets			17,824			10,332
Leasehold improvements, property and equipment, net			340,694			289,873
Other assets			2,653			2,825
Restricted cash and cash equivalents			—			380
Long-term deferred tax assets			13,586			—
Goodwill			17,738			26,243
Total assets		$	392,495		$	329,653
Liabilities and shareholders' equity
Current liabilities:
	Cash overdraft	$	—		$	4,431
	Accounts payable		13,188			11,803
	Accrued payroll and benefits		9,723			7,308
	Accrued liabilities		15,683			9,430
	Accrued loss contingency		1,817			4,000
	Current portion of deemed landlord financing		57			—
	Due to McDonald's Corp.		1,514			1,691
Total current liabilities			41,982			38,663
Deferred rent			37,106			28,231
Deemed landlord financing			3,476			—
Other liabilities			577			193
Total liabilities			83,141			67,087
Shareholders' equity:
	Class A common stock, $0.01 par value, 200,000 shares authorized, no shares outstanding as of December 31, 2005 and 2004		—			—
	Convertible Class B common stock, $0.01 par value, 30,000 shares authorized, 26,281 shares issued and outstanding as of December 31, 2005 and 2004 (Note 1)		263			263
	Additional paid-in capital		375,728			384,426
	Tax receivable—McDonald's Corp.		(28,195	)		(45,985	)
	Accumulated other comprehensive income		9			9
	Accumulated deficit		(38,451	)		(76,147	)
Total shareholders' equity			309,354			262,566
Total liabilities and shareholders' equity		$	392,495		$	329,653

See accompanying notes to consolidated financial statements.

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Chipotle Mexican Grill, Inc.

Consolidated Statement of Operations

(in thousands, except per share data)

		Years ended December 31
		2005			2004			2003
Revenue:
Restaurant sales		$	625,077		$	468,579		$	314,027
Franchise royalties and fees			2,618			2,142			1,493
Total revenue			627,695			470,721			315,520
Restaurant operating costs:
	Food, beverage and packaging		202,288			154,148			104,921
	Labor		178,721			139,494			94,023
	Occupancy		47,636			36,190			25,570
	Other operating costs		82,976			64,274			43,527
General and administrative expenses			51,964			44,837			34,189
Depreciation and amortization			28,026			21,802			15,090
Pre-opening costs			1,971			2,192			1,631
Loss on disposal of assets			3,119			1,678			4,504
			596,701			464,615			323,455
Income (loss) from operations			30,994			6,106			(7,935	)
Interest income			36			211			249
Interest expense			(790	)		(191	)		(28	)
Income (loss) before income taxes			30,240			6,126			(7,714	)
Benefit for income taxes			7,456			—			—
Net income (loss)		$	37,696		$	6,126		$	(7,714	)
Earnings (loss) per common share—basic		$	1.43		$	0.24		$	(0.34	)
Earnings (loss) per common share—diluted		$	1.43		$	0.24		$	(0.34	)
Weighted average common shares outstanding—basic			26,281			25,454			22,384
Weighted average common shares outstanding—diluted			26,374			25,520			22,384

See accompanying notes to consolidated financial statements.

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Chipotle Mexican Grill, Inc.

Consolidated Statement of Shareholders' Equity and Comprehensive Income

(in thousands)

			Class B Common Stock (Note 1)
									Tax Receivable McDonald's Corp						Accumulated Other Comprehensive Income
						Additional Paid-in Capital						Accumulated Deficit
			Shares	Amount													Total
Balance, December 31, 2002			21,200	$	212	$	261,803		$	(26,202	)	$	(74,559	)	$	—	$	161,254
Issuance of common stock			2,173		22		37,946			—			—			—		37,968
Tax sharing benefit							10,910			(10,910	)		—			—		—
Net loss			—		—		—			—			(7,714	)		—		(7,714	)
Balance, December 31, 2003			23,373		234		310,659			(37,112	)		(82,273	)		—		191,508
Issuance of common stock			2,908		29		64,894			—			—			—		64,923
Tax sharing benefit							8,873			(8,873	)		—			—		—
Comprehensive income:
	Net income		—		—		—			—			6,126			—		6,126
	Foreign currency translation adjustment		—		—		—			—			—			9		9
		Total comprehensive income	—		—		—			—			—			—		6,135
Balance, December 31, 2004			26,281		263		384,426			(45,985	)		(76,147	)		9		262,566
Tax sharing provision			—		—		(10,417	)		17,790			—			—		7,373
Stock-based compensation			—		—		1,719			—			—			—		1,719
Net income			—		—		—			—			37,696			—		37,696
Balance, December 31, 2005			26,281	$	263	$	375,728		$	(28,195	)	$	(38,451	)	$	9	$	309,354

See accompanying notes to consolidated financial statements.

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Chipotle Mexican Grill, Inc.

Consolidated Statement of Cash Flows

(in thousands)

			Years ended December 31
			2005			2004			2003
Operating activities
Net income (loss)			$	37,696		$	6,126		$	(7,714	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Depreciation and amortization			28,026			21,802			15,090
	Current income tax (benefit) provision			15,541			(8,873	)		(10,910	)
	Deferred income tax (benefit) provision			(2,654	)		11,485			7,968
	Change in valuation allowance			(20,343	)		(2,612	)		2,942
	Loss on disposal of assets			3,119			1,678			4,504
	Bad debt allowance			(359	)		804			—
	Stock-based compensation			2,103			193			—
	Other			(678	)		—			(301	)
	Changes in operating assets and liabilities:
		Accounts receivable		916			(689	)		(1,929	)
		Inventory		(369	)		(790	)		(433	)
		Prepaid expenses		(3,757	)		(1,092	)		(1,072	)
		Other assets		(477	)		(145	)		337
		Accounts payable		5,553			(2,345	)		5,040
		Accrued liabilities		6,485			6,717			2,996
		Due to McDonald's Corp.		(177	)		155			(69	)
		Deferred rent		6,806			7,258			5,620
Net cash provided by operating activities				77,431			39,672			22,069
Investing activities
Purchases of leasehold improvements, property and equipment, net				(83,036	)		(95,615	)		(86,107	)
Net cash used in investing activities				(83,036	)		(95,615	)		(86,107	)
Financing activities
Net proceeds from sale of common stock				—			64,923			37,968
Proceeds from McDonalds—tax sharing agreement				7,402			—			—
Proceeds from McDonald's—intercompany notes				37,905			55,139			62,261
Payments to McDonald's—intercompany notes				(38,743	)		(66,000	)		(36,000	)
Changes in cash overdrafts				(4,431	)		1,881			(191	)
Proceeds from deemed landlord financing				3,549			—			—
Payments on deemed landlord financing				(16	)		—			—
Net cash provided by financing activities				5,666			55,943			64,038
Net change in cash and cash equivalents				61			—			—
Cash and cash equivalents at beginning of year				—			—			—
Cash and cash equivalents at end of year			$	61		$	—		$	—
Supplemental disclosures of cash flow information
Non-cash preopening rent capitalized to leasehold improvements			$	2,667		$	2,317		$	1,965
Net purchases of leasehold improvements, property and equipment accrued in accounts payable			$	(4,168	)	$	4,127		$	(453	)

See accompanying notes to consolidated financial statements.

45

Chipotle Mexican Grill, Inc.

Notes to Financial Statements

(in thousands, except per share data)

1.     Description of Business and Summary of Significant Accounting Policies

        Chipotle Mexican Grill, Inc. (the "Company"), a Delaware corporation, develops and operates fast-casual, fresh Mexican food restaurants in 21 states throughout the United States and in the District of Columbia. As of December 31, 2005 and 2004, the Company operated 481 and 401 restaurants, respectively, and had eight restaurants operated by franchisees each year. McDonald's Corporation (McDonald's) is the majority owner of the Company (approximately 92% during 2005).

        The Company manages its operations based on four regions and has aggregated its operations to one reportable segment and one reporting unit.

Initial Public Offering

        In January 2006, the Company completed its offering of 6,061 shares of Class A common stock, $0.01 par value, in its initial public offering at a per share price of $22.00 receiving net proceeds of approximately $121.3 million. McDonald's, sold an additional 3,000 shares, including the underwriters' 1,182 over-allotment shares, in the initial public offering. In connection with the initial public offering, the Company filed restated articles of incorporation effecting the reclassification of all outstanding shares of Series B convertible preferred stock and Series C and Series D junior convertible preferred stock and all outstanding shares of common stock into one-third share of Class B common stock (the "Reclassification"). Class B common stock is a new class of stock generally having ten votes per share. Class A common stock, also a new class of stock with one vote per share, was issued and sold to investors in connection with the initial public offering. All other provisions of the Class A and Class B common stock are substantially the same. After the consummation of the initial public offering, McDonald's owns about 87% of the combined voting power of the Company's outstanding common stock and 65% of the economic interest of the Company. The accompanying consolidated financial statements and related notes reflect the effect of the Reclassification retroactively.

Principles of Consolidation

        The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated.

Management Estimates

        The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates under different assumptions or conditions.

Revenue Recognition

        Revenue from restaurant sales is recognized when food and beverage products are sold. A deferred liability is recognized for gift cards that have been sold but not yet redeemed at their anticipated redemption value. The Company recognizes revenue and reduces the related deferred liability when the gift cards are redeemed. Fees from franchised restaurants include continuing rent and service fees, initial fees and royalties. Continuing fees and royalties are recognized in the period

46

earned. Initial fees are recognized upon opening a restaurant, which is when the Company has performed substantially all initial services required by the franchise arrangement.

Cash and Cash Equivalents

        The Company considers all highly liquid investment instruments purchased with an initial maturity of three months or less to be cash equivalents.

Accounts Receivable

        Accounts receivable consists of tenant improvement receivables, credit card receivables, and miscellaneous receivables. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses in the Company's existing accounts receivable based on a specific review of account balances. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recoverability is considered remote.

Inventory

        Inventory, consisting principally of food, beverages, and supplies, is valued at the lower of first-in, first-out cost or market. The Company has no minimum purchase commitments with its vendors. The Company purchases certain key ingredients (steak, chicken, pork and tortillas) from a small number of suppliers.

Leasehold Improvements, Property and Equipment

        Leasehold improvements, property and equipment are stated at cost. Internal costs clearly associated with the acquisition, development and construction of a restaurant are capitalized. Expenditures for major renewals and improvements are capitalized while expenditures for minor replacements, maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the lease term, which generally includes reasonably assured option periods, or the estimated useful lives of the assets. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss is reflected in earnings.

        The estimated useful lives are:

Leasehold improvements and buildings	3-20 years
Furniture and fixtures	3-10 years
Equipment	3-7 years

Goodwill

        Goodwill represents the excess of cost over fair value of net assets of the business acquired. Goodwill resulted from McDonald's purchases of the Company. Goodwill determined to have an indefinite life is not subject to amortization, but instead is tested for impairment at least annually in accordance with the provision of Statement of Financial Accounting Standard ("SFAS") No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). In accordance with SFAS 142, the Company is required to make any necessary impairment adjustments. Impairment is measured as the excess of the

47

carrying value over the fair value of the goodwill. Based on the Company's analysis, no impairment charges were recognized for the years ended December 31, 2005, 2004 and 2003.

Other Assets

        Other assets consist primarily of transferable liquor licenses which are carried at the lower of fair value or cost.

Impairment of Long-Lived Assets

        In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Asset ("SFAS 144"), long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Based on the Company's analysis, no impairment charges were recognized for the years ended December 31, 2005, 2004 and 2003.

Fair Value of Financial Instruments

        The carrying value of the Company's financial assets and liabilities, because of their short-term nature, approximates fair value.

Income Taxes

        Prior to the Company's initial public offering in January 2006, it was not a separate taxable entity for federal and certain state income tax purposes. Its results of operations were included in the consolidated federal and state income tax returns of McDonald's. The Company will continue to be included in some state tax returns of McDonald's as long as McDonald's ownership percentage remains above 50%. The provision for income taxes is calculated on a separate income tax return basis. The Company recognizes deferred tax assets and liabilities at enacted income tax rates for the temporary differences between the financial reporting bases and the tax bases of its assets and liabilities. Any effects of changes in income tax rates or tax laws are included in the provision for income taxes in the period of enactment. When it is more likely than not that a portion or all of a deferred tax asset will not be realized in the future, the Company provides a corresponding valuation allowance against the deferred tax asset.

Equity-Based Compensation Plans

        Prior to January 1, 2005, the Company accounted for its equity-based compensation plan using the intrinsic-value method prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations, as permitted by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). Prior to January 1, 2005, no compensation expense was recognized on stock option grants as the exercise price equaled the fair value at the date of grant. Accordingly, share-based compensation was included as a pro forma disclosure in the financial statement footnotes.

48

        Effective January 1, 2005, the Company early adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment ("SFAS 123(R)"), using the modified-prospective transition method. Under this transition method, compensation cost in 2005 includes the portion vesting in the period for (1) all share-based payments granted prior to, but not vested as of January 1, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123 and (2) all share-based payments granted subsequent to January 1, 2005, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R). Compensation expense is recognized over the vesting period. The following table illustrates the effect on net income (loss) as if the fair value based method had been applied to all outstanding and unvested awards for the years ended December 31, 2004 and 2003.

	2004			2003
Net income (loss), as reported	$	6,126		$	(7,714	)
Stock-based employee compensation expense		(527	)		(434	)
Pro forma net income (loss)	$	5,599		$	(8,148	)
Earnings (loss) per share:
Basic, as reported	$	0.24		$	(0.34	)
Diluted, as reported	$	0.24		$	(0.34	)
Basic, pro forma	$	0.22		$	(0.36	)
Diluted, pro forma	$	0.22		$	(0.36	)

Restaurant Pre-Opening Costs

        Pre-opening costs are expensed as incurred. These costs include wages, benefits and travel for the training and opening teams, and food, beverage and other restaurant operating costs incurred prior to a restaurant opening for business.

Insurance Liability

        The Company maintains various insurance policies for workers' compensation, employee health, general liability and property damage. Pursuant to these policies, the Company is responsible for losses up to certain limits for general liability and property damage insurance and is required to estimate a liability that represents the ultimate exposure for aggregate losses below those limits. This liability is based on management's estimates of the ultimate costs to be incurred to settle known claims and claims not reported as of the balance sheet date. The estimated liability is not discounted and is based on a number of assumptions and factors, including historical trends, actuarial assumptions, and economic conditions. If actual trends differ from the estimates, the financial results could be impacted.

Advertising Costs

        Advertising is expensed as incurred and aggregated $10,748, $8,715 and $6,231 for the years ended December 31, 2005, 2004 and 2003, respectively.

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Rent

        Rent expense for the Company's leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. The lease term begins when the Company has the right to control the use of the property, which is typically before rent payments are due under the lease. The difference between the rent expense and rent paid is recorded as deferred rent in the consolidated balance sheet. Rent expense for the period prior to store opening is capitalized and included in leasehold improvements in the consolidated balance sheet. Rent capitalized during the pre-opening period was $4,229, $3,626 and $2,489 for the years ended December 31, 2005, 2004 and 2003, respectively. Tenant incentives used to fund leasehold improvements are recorded in deferred rent and amortized as reductions of rent expense over the term of the lease.

        Additionally, certain of the Company's operating leases contain clauses that provide additional contingent rent based on a percentage of sales greater than certain specified target amounts. The Company recognizes contingent rent expense prior to the achievement of the specified target that triggers contingent rent, provided the achievement of that target is considered probable.

Foreign Currency Translation

        Currently, the Company has no operations outside the United States, but has created an international subsidiary to hold international trademarks. The Company's international entity uses its local currency as the functional currency. Assets and liabilities are translated at exchange rates in effect as of the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income in shareholders' equity.

2.     Recently Issued Accounting Standards

        In October 2005, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position No. SFAS 13-1, Accounting for Rental Costs Incurred during a Construction Period ("FSP 13-1"). FSP 13-1 requires rental costs associated with ground or building operating leases incurred during a construction period to be recognized as expense. FSP 13-1 is effective for reporting periods beginning after December 15, 2005. Retroactive application is permitted, but not required. Had FSP 13-1 been effective, the Company would have recognized additional pre-opening costs of $4,229, $3,626 and $2,489 for the years ended December 31, 2005, 2004 and 2003, respectively.

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3.     Leasehold Improvements, Property and Equipment

        Leasehold improvements, property and equipment were as follows:

	December 31
	2005			2004
Land	$	6,557		$	6,298
Leasehold improvements and buildings		320,941			262,332
Furniture and fixtures		36,266			29,814
Equipment		63,356			51,907
		427,120			350,351
Accumulated depreciation		(86,426	)		(60,478	)
	$	340,694		$	289,873

4.     Income Taxes

        Prior to the Company's initial public offering, it was not a separate taxable entity for federal and certain state income tax purposes. The Company's results of operations were included in the consolidated federal and state income tax returns of McDonald's and its affiliates. The Company will continue to be included in some state tax returns of McDonald's until McDonald's ownership percentage decreases below 50%. The provision for income taxes is calculated on a separate return basis.

        The components of the benefit for income taxes are as follows:

		Years ended December 31
		2005			2004			2003
Current tax benefit (provision):
	Federal	$	(13,426	)	$	7,487		$	9,205
	State		(2,115	)		1,386			1,705
			(15,541	)		8,873			10,910
Deferred tax benefit (provision):
	Federal		3,429			(9,647	)		(6,825	)
	State		(775	)		(1,838	)		(1,143	)
			2,654			(11,485	)		(7,968	)
Valuation allowance			20,343			2,612			(2,942	)
Total benefit for income taxes		$	7,456		$	—		$	—

        During the year ended December 31, 2005, deferred taxes included an adjustment to the provision based on the actual tax returns filed, which resulted in an additional expense of $389. This true-up process also resulted in the receivable from McDonald's being reduced by $3,352 in the same period. Lastly, the Company recorded adjustments to deferred tax assets and liabilities for enacted changes in state tax laws, which resulted in an additional $240 expense for the year ended December 31, 2005.

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        The following table shows the principal reasons for the difference between the effective tax rate and the United States federal statutory income tax rate:

	Years ended December 31
	2005		2004		2003
Statutory U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
State income tax, net of related federal income tax benefit	4.8		4.8		4.7
Meals and entertainment	0.6		2.1		(1.3	)
Other	2.2		0.7		(0.3	)
Valuation allowance	(67.3	)	(42.6	)	(38.1	)
Effective income tax rates	(24.7	)%	0.0	%	0.0	%

        Deferred income tax liabilities are taxes the Company expects to pay in future periods. Similarly, deferred income tax assets are recorded for expected reductions in taxes payable in future periods. Deferred income taxes arise because of the differences in the book and tax bases of certain assets and liabilities. Deferred income tax liabilities and assets consist of the following:

	December 31,
	2005		2004
Long-term deferred income tax liability:
Leasehold improvements, property and equipment	$	28,627	$	33,846
Total long-term deferred income tax liability		28,627		33,846
Long-term deferred income tax asset:
Post-acquisition net operating loss carryforwards		34,743		45,985
Preacquisition net operating loss carryforwards		—		8,505
Deferred rent		6,162		4,341
Separate state net operating loss carryforwards		471		935
Stock compensation and other employee benefits		837		760
Valuation allowance		—		(26,680	)
Total long-term deferred income tax asset		42,213		33,846
Net long-term deferred income tax asset		13,586		—
Current deferred income tax liability:
Prepaid assets and other		296		758
Total current deferred income tax liability		296		758
Current deferred income tax asset:
Allowances, reserves and other		975		2,060
Stock compensation and other employee benefits		844		866
AMT tax credit		823		—
Valuation allowance		—		(2,168	)
Total current deferred income tax asset		2,642		758
Net current deferred tax asset		2,346		—
Total deferred tax asset	$	15,932	$	—

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        As of December 31, 2005, the Company had total net operating losses ("NOLs") of approximately $95,143 (after utilizing $41,239 in 2005) which were utilized by McDonald's under the Company's tax sharing agreement (see below). Through December 31, 2004, a valuation allowance had been recorded to offset the deferred tax assets, including those related to the NOLs, net of deferred tax liabilities. During the year ended December 31, 2005, the Company determined that it was more likely than not that it would realize its deferred tax assets and a valuation allowance was no longer required. When a valuation allowance related to net deferred tax assets resulting from an acquisition is reversed, the related tax benefit reduces goodwill. During the year ended December 31, 2005, the Company released $28,848 of valuation allowance of which $8,505 was attributable to the net deferred tax assets of Chipotle at the date of McDonald's majority acquisition of the Company. The related release of valuation allowance has been recorded as a reduction of goodwill.

        In accordance with the tax allocation agreement between McDonald's and the Company, which is effective any time the Company is included in a consolidated return with McDonald's, the Company's tax liability is computed on a separate return basis. The Company would pay McDonald's for its allocated tax liability or if it benefited from net losses or tax credits of other members of the consolidated tax return. Likewise, McDonald's would compensate the Company if it had a net operating loss or tax credit during the tax year that is used by other members of McDonald's consolidated return. To the extent the Company generated taxable income, it would first be allocated to the separate return limitation year ("SRLY") losses. Once the SRLY losses had either been fully utilized or expired, the taxable income would be offset against the tax attributes/deferred tax assets previously used by McDonald's.

        McDonald's has utilized $118,041 of the Company's losses, as a reduction of taxable income in its consolidated return. No tax benefit was reflected in the consolidated statement of operations for McDonald's utilization of the Company's NOLs, but rather was treated as a capital contribution. As of December 31, 2005 and 2004, the Company has recorded a receivable from McDonald's in shareholder's equity in the consolidated balance sheet of $28,195 and $45,985, respectively, for these unreimbursed tax attributes.

        At the consummation of the Company's initial public offering, the Company exited the consolidated group for federal and some state tax purposes and will be reimbursed for the remaining tax attributes in accordance with the tax sharing agreement. The tax effect of all changes in the tax bases of assets and liabilities, such as the elimination of the deferred tax asset related to the post-acquisition net operating loss carryforwards, will be recorded in equity and the Company will convert to a net long-term deferred tax liability position.

5.     Shareholders' Equity

Preferred Stock

        Prior to the initial public offering, the Company was authorized to issue 40,000 shares of preferred stock with a $0.01 par value. As mentioned in Note 1, as of the effective date of the Company's initial public offering, each of the 8,034 shares of Series B convertible preferred stock and 3,975 shares of Series C and 8,511 shares of Series D junior convertible preferred stock outstanding were converted into one-third share of Class B common stock. The remaining preferred shares authorized had not been designated. In connection with the initial public offering, the Company authorized 600,000 shares of preferred stock with par value of $0.01, which have not been designated.

53

Common Stock

        The consolidated financial statements and related notes reflect retroactive application of the Reclassification (as discussed in Note 1) including the conversion of each of the outstanding shares of preferred stock and common stock into one-third share of Class B common stock. The restated certification of incorporation authorizes the issuance of an aggregate 230,000 shares of common stock consisting of 30,000 shares of Class B common stock with a $0.01 par value and 200,000 shares of Class A common stock with a $0.01 par value. Each share of Class B common stock is convertible at the option of the share holder into one share of Class A common stock. Class B common stock shares shall also convert to Class A common stock shares if a transfer of ownership occurs (except in, and subsequent to, a tax free distribution). Class B common stock shares participate equally in dividends with Class A common stock shares. Voting rights of Class B common stock shares and Class A common stock shares are generally the same, except Class B common stock shares have ten votes per share whereas Class A common stock shares have one vote per share, with certain exceptions. For example, for purposes of approving a merger or consolidation, a sale of substantially all property or a dissolution, each share of both Class A and Class B will have only one vote.

6.     Stock Based Compensation

Stock Options

        In 2002, the Company adopted the Chipotle Executive Stock Option Plan (the "Option Plan"). Under the Option Plan, 1,000 shares of common stock have been reserved for issuance to eligible employees. The Option Plan is administered by the Board of Directors, which has the authority to select the individuals to whom awards will be granted and to determine when the options are to be granted, the number of shares to be covered by each award, the vesting schedule and all other terms and conditions of the awards. The exercise price for options granted under the Option Plan cannot be less than fair market value at the date of grant. The options granted vest three years from the date of grant and expire after five years and six months. The Company does not intend to grant additional options under the Option Plan. Subsequent to the adoption of SFAS 123(R) (as discussed in Note 1) on January 1, 2005, compensation expense (as valued on the original grant date under SFAS 123) is recognized equally over the remaining life of the award. Compensation expense related to stock options was $350 ($211 net of tax) for the year ended December 31, 2005. No compensation expense was recognized in the years ended December 31, 2004 and 2003. As of December 31, 2005, there was $69 of unrecognized compensation expense related to unvested options that is expected to be recognized over the remaining 4 month vesting period.

54

        A summary of option activity under the Option Plan as of and for the years ended December 31, 2005, 2004 and 2003 is as follows:

Options	Shares		Weighted-Average Exercise Price		Weighted-Average Grant Date Fair Value
Options outstanding as of January 1, 2003	119		$	14.97
Granted	122		$	17.49	$	6.81
Options outstanding as of December 31, 2003	241		$	16.25
Granted	—		$	—
Options outstanding as of December 31, 2004	241		$	16.25
Expired	(6	)	$	14.97	$	6.27
Forfeited	(10	)	$	17.49	$	6.81
Options outstanding as of December 31, 2005	225		$	16.23

        The following table reflects the vesting activity of options currently outstanding:

	Shares	Total Fair Value		Weighted- Average Exercise Price		Intrinsic Value		Weighted- Average Remaining Contractual Life
As of December 31, 2005:
Options vested and exercisable	112	$	704	$	14.97	$	509	1.9

        Effective with the Company's initial public offering the Company adopted the Chipotle Mexican Grill, Inc. 2006 Incentive Plan (the "2006 Incentive Plan"). Under the 2006 Incentive Plan, 2,200 shares of Class A common stock have been authorized and reserved for issuances to eligible employees, of which 775 represents shares that were authorized for issuance, but not issued under the Option Plan. In conjunction with the initial public offering, the Company granted a one-time grant of 774 options to purchase shares of Class A common stock to all of its salaried employees. The exercise price of the options was set at the grant date fair value, the initial public offering price, of $22.00 per share. These options vest three years after the grant date and expire after seven years. Compensation expense for these options will be recognized equally over a three year vesting period. These options are not reflected in the diluted earnings per share calculations.

Stock Appreciation Rights

        In 2004, the Company adopted the Chipotle Stock Appreciation Rights Plan (the "SAR Plan"). The Company granted stock appreciation rights ("SARs") on 167 shares of common stock which vest three years from the date of grant and expire after five years and six months. The fair value of the common stock on the date of grant was $22.35 per share. The SARs are accounted for as a liability, and compensation expense is revalued each reporting period and recognized over the remaining vesting period. The liability is included in other liabilities in the consolidated balance sheet. During the year ended December 31, 2005, no SARs were granted, had expired, or were exercised and 18 SARs were forfeited. During 2004, none of the SARs granted had expired, were forfeited or exercised. In addition, none of the SARs outstanding as of December 31, 2005 are vested or exercisable. Compensation

55

expense related to SARs was $384 and $193 ($231 and $193 net of tax) for the years ended December 31, 2005 and 2004, respectively. As of December 31, 2005, there was $235 of unrecognized compensation expense related to unvested SARs. Effective with the Company's initial public offering, all SARs outstanding as of January 25, 2006 were converted into options to purchase 148 shares of Class A common stock. The options will have terms consistent with the original SARs, including the same vesting schedule (vesting in full in July 2007) and an exercise price of $22.35 per share. Upon conversion, the options will be accounted for as an equity award. The incremental compensation costs arising from the difference in the SARs fair value just prior to conversion and the fair value of the new award will be measured. The portion of the new award's incremental compensation expense related to service periods that have been completed as of the effective date will be recognized immediately. Remaining unrecognized compensation expense will be recognized over the remaining 1.5 year vesting period.

Nonvested Shares

        In 2005, the Company granted 153 shares of common stock with a grant-date fair value of $19.50 per share (a related party contemporaneous valuation) which vest evenly over three years. No shares vested or were forfeited during the year. Compensation expense is recognized over the vesting period and is included in general and administrative expenses in the consolidated statement of operations. Compensation expense was $1,369 ($1,104 net of tax) for the year ended December 31, 2005. As of December 31, 2005, there was $1,619 of unrecognized compensation expense related to unvested shares that is expected to be recognized over the remaining 2.3 year vesting period.

Fair Value of Equity Awards

        The following table reflects the assumptions utilized to value the 2003 stock option awards granted as well as the assumptions used to value the SARs as of December 31, 2005 under both SFAS 123(R) and SFAS 123 using the Black-Scholes valuation model. The risk-free interest rate is based upon U.S. Treasury Rates for instruments with similar terms. The expected life of the options is derived from historic behavior of representative employee groups. The full term of the options and SARs (together the "share units") was used for the expected life since the share units were granted to senior management where turnover is expected to be low and since they are expected to hold the shares units for the full term to obtain the maximum benefit. The Company has not paid dividends to date and does not plan to pay dividends in the near future. The volatility assumptions were derived from the Company's annual independent stock valuation and historical volatilities of competitors whose shares are traded in the public markets and are adjusted to reflect anticipated behavior specific to the Company.

	2005 (SARs)		2003 (Options)
Risk-free interest rate	3.9	%	2.9	%
Expected life (years)	5.0		5.5
Expected dividend yield	0.0	%	0.0	%
Volatility	37.0	%	37.0	%

        In accordance with SFAS 123(R), the SARs were revalued as of December 31, 2005 using the assumptions effective as of that date which are noted above.

56

McDonald's Options

        McDonald's issues stock options to certain employees of McDonald's Corporation and its subsidiaries. On February 2, 2001, stock option grants were issued to certain employees of the Company under the McDonald's Stock Ownership Incentive Plan (McDonald's Plan). The options became exercisable equally over four years, expire 10 years from the date of grant and have an exercise price of $29.43 per share of McDonald's stock. The Company has agreed to pay McDonald's $2,356 for its cost of participating in McDonald's Plan which was expensed equally over the four-year vesting period. As of December 31, 2005 and 2004, $1,178 of the amount was payable to McDonald's, half of which is due in 2006 and 2008, and is included in the amount due to McDonald's on the balance sheet.

7.     Employee Benefit Plans

        McDonald's sponsors a 401(k) plan which covers eligible employees of the Company. The Company matches 100% of the first 3% of pay contributed by each eligible employee and 50% on the next 2% of pay contributed. Employees become eligible to receive matching contributions after one year of service with the Company. For the years ended December 31, 2005, 2004 and 2003, Company matching contributions totaled approximately $828, $747 and $436, respectively.

8.     Related-Party Transactions

        The Company enters into short-term agreements with McDonald's to provide the Company with temporary capital. The Company has a line of credit with McDonald's, which was for $30,000 and $20,000 as of December 31, 2005 and 2004, respectively. The line of credit bears interest at the prime rate plus 100 basis points (8.25% and 6.25% as of December 31, 2005 and 2004, respectively). The weighted-average interest rate was 6.72%, 5.00% and 5.00% for the years ended December 31, 2005, 2004 and 2003, respectively. Interest is added to the outstanding principal monthly. The line of credit is due on demand and expires June 30, 2006 and is not expected to be renewed. For the years ended December 31, 2005, 2004 and 2003, interest expense was $691, $191 and $15, respectively. No amounts were outstanding as of December 31, 2005 or 2004.

        The Company invests its excess cash under short-term agreements with McDonald's. The agreement in place as of December 31, 2004 provided for interest at the 30-day Commercial Paper rate plus 50 basis points (2.66% as of December 31, 2004), was due on demand and expired April 14, 2005. The Company has not had an agreement in place since April 15, 2005, but has been operating under the terms of the previous agreement. Interest was added to the principal monthly. For the years ended December 31, 2005, 2004 and 2003, interest income was $12, $205 and $244, respectively. As of December 31, 2005 and 2004, the Company had $2,248 and $732, respectively, deposited under this arrangement.

        The consolidated statement of operations reflects charges from McDonald's of $8,790, $7,711 and $4,917 for the years ended December 31, 2005, 2004 and 2003, respectively. These charges primarily related to reimbursements of payroll and related expenses for certain McDonald's employees that perform services for the Company, insurance coverage, software maintenance agreements and non-income based taxes. The charges are specifically identifiable to the Company. The Company cannot estimate with any reasonable certainty what these charges would have been on a stand-alone basis. However, the Company feels that these charges are indicative of what it could have incurred on a stand-alone basis.

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        The Company leases office and restaurant space from McDonald's and its affiliates. Rent expense was $404, $306 and $243 for such leases for the years ended December 31, 2005, 2004 and 2003, respectively.

9.     Leases

        The Company generally operates its restaurants in leased premises. Lease terms for traditional shopping center or building leases generally include combined initial and option terms of 20-25 years. Ground leases generally include combined initial and option terms of 30-50 years. The option terms in each of these leases are typically in five-year increments. Typically, the lease includes rent escalation terms every five years including fixed rent escalations, escalations based on inflation indexes, and fair market value adjustments. Certain leases contain contingent rental provisions based upon the sales of the underlying restaurants. The leases generally provide for the payment of common area maintenance, property taxes, insurance and various other use and occupancy costs by the Company. In addition, the Company is the lessee under non-cancelable leases covering certain offices and vehicles.

        Future minimum lease payments required under existing operating leases as of December 31, 2005 are as follows:

2006	$	45,158
2007		45,039
2008		44,241
2009		44,471
2010		44,366
Thereafter		555,464
Total minimum lease payments	$	778,739

        Minimum lease payments have not been reduced by minimum sublease rentals of $12,615 due in the future under non-cancelable subleases.

        Rental expense consists of the following:

	For the years ended December 31,
	2005			2004			2003
Minimum rentals	$	42,506		$	33,201		$	23,688
Contingent rentals	$	431		$	284		$	196
Sublease rental income	$	(2,070	)	$	(1,632	)	$	(1,143	)

        During the year ended December 31, 2005, the Company entered into five sales and leaseback transactions. These transactions do not qualify for sales leaseback accounting because of the Company's deemed continuing involvement with the buyer-lessor due to fixed price renewal options, which results in the transaction being recorded under the financing method. Under the financing method, the assets remain on the consolidated balance sheet and the proceeds from the transactions are recorded as a financing liability. A portion of lease payments are applied as payments of deemed principal and imputed interest. The assets under deemed landlord financing, net, totaled $2,907 and the deemed

58

landlord financing liability was $3,533 as of December 31, 2005. The future minimum lease payments for each of the next five years and thereafter for deemed landlord financing obligations are as follows

2006	$	310
2007		310
2008		310
2009		310
2010		316
Thereafter		5,273
Total minimum lease payments		6,829
Less: Interest implicit in lease		(3,296	)
Total deemed landlord financing	$	3,533

10.   Earnings Per Share

        In connection with the Company's initial public offering, the Reclassification (as discussed in Note 1) converted each share of Series B convertible preferred stock, Series C and Series D junior convertible preferred stock and common stock, issued and outstanding as of the effective date of the initial public offering, into one-third share of class B common stock. The share and per share data presented reflect the retroactive application of the Reclassification.

        Basic earnings per common share is calculated by dividing income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per common share ("Diluted EPS") is calculated using income (loss) available to common shareholders divided by diluted weighted-average shares of common stock outstanding during each period. Potentially dilutive securities include potential common shares related to stock options and non-vested stock. Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Options to purchase 241 shares of common stock in 2003 at a weighted-average exercise price of $16.00, which were outstanding during the period, were excluded from the calculation of diluted earnings per share because they were anti-dilutive.

        The following table sets forth the computations of basic and dilutive earnings per common share:

	Year ended December 31,
	2005		2004		2003
Net income (loss)	$	37,696	$	6,126	$	(7,714	)
Shares:
Weighted average number of common shares outstanding		26,281		25,454		22,384
Dilutive stock options		67		66		—
Dilutive non-vested stock		26		—		—
Diluted weighted average number of common shares outstanding		26,374		25,520		22,384
Basic earnings (loss) per share	$	1.43	$	0.24	$	(0.34	)
Diluted earnings (loss) per share	$	1.43	$	0.24	$	(0.34	)

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11.   Contingencies

        In August 2004, the merchant bank that processes the Company's credit and debit card transactions, informed the Company it may have been the victim of a possible theft of credit and debit card data. Together with two forensic auditing firms, the Company investigated the alleged theft and reviewed its information systems and information security procedures. The Company also reported the problem to federal law enforcement authorities and has been cooperating in their investigation. While to date the Company has not discovered conclusive evidence that a theft occurred, the Company has upgraded its information security systems, including remediating the specific problems identified during the forensic audits. During 2004, the Company recorded a reserve for the potential exposure for losses and fines of $4,000. Through December 31, 2005, the Company utilized $2,183 of the reserve to cover fines and losses, which does not take into account a fine of $440 assessed by MasterCard in December 2005 which is expected to be charged against the reserve in 2006. As the situation develops and more information becomes available, the amount of the reserve may increase or decrease accordingly.

        In the normal course of business, the Company is subject to proceedings, lawsuits and other claims. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Consequently, the Company is unable to ascertain the ultimate aggregate amount of monetary liability or financial impact with respect to these matters as of December 31, 2005. These matters could affect the operating results of any one quarter when resolved in future periods. However, management believes after final disposition, any monetary liability or financial impact to the Company beyond that provided for at the end of the year would not be material to the Company's annual consolidated financial statements.

        The Company is party to an irrevocable standby letter of credit that ensures the Company's performance/payment to Enterprise Fleet Services related to a leasing arrangement for vehicles in which $800 was outstanding as of December 31, 2005 and 2004.

12.   Quarterly Financial Data (Unaudited)

        Summarized unaudited quarterly financial data:

	2005
	March 31		June 30		September 30		December 31
Revenue	$	133,416	$	156,296	$	164,670	$	173,313
Operating income	$	4,439	$	9,321	$	9,499	$	7,735
Net income	$	2,626	$	25,725	$	5,083	$	4,262
Basic earnings per share	$	0.10	$	0.98	$	0.19	$	0.16
Diluted earnings per share	$	0.10	$	0.98	$	0.19	$	0.16

	2004
	March 31		June 30		September 30		December 31
Revenue	$	101,442	$	117,248	$	124,563	$	127,468
Operating income (loss)	$	702	$	4,944	$	4,215	$	(3,755	)
Net income (loss)	$	515	$	5,034	$	4,293	$	(3,716	)
Basic earnings (loss) per share	$	0.02	$	0.20	$	0.16	$	(0.14	)
Diluted earnings (loss) per share	$	0.02	$	0.20	$	0.16	$	(0.14	)

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        The earnings (loss) per share presented reflects the retroactive application of the Reclassification.

        The quarterly results were impacted by the following unusual or infrequent events:

        In the second quarter of 2005, the Company determined that it was more likely than not that it would realize its deferred tax assets and reversed its valuation allowance of $20,343, resulting in a net tax benefit of $16,739 in that quarter.

        In the fourth quarter of 2004, the Company recorded charges of $4,000 to establish a reserve for claims seeking reimbursement for purportedly fraudulent credit and debit card charges and for the cost of replacing cards and monitoring expenses and fees, which reduced the Company's operating income.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.

ITEM 9A. CONTROLS AND PROCEDURES

(a)

Evaluation of disclosure controls and procedures.

        We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Security Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Security Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer, President and Chief Operating Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

        As of December 31, 2005, we carried out an evaluation, under the supervision and with the participation of Chipotle's management, including the Chief Executive Officer, President and Chief Operating Officer and Chief Financial Officer, of the effectiveness of the design and operation of Chipotle's disclosure controls and procedures. Based on the foregoing, the Chipotle Chief Executive Officer, President and Chief Operating Officer and Chief Financial Officer concluded that Chipotle's disclosure controls and procedures were effective as of the end of the period covered by this annual report.

(b)

Section 404 compliance project.

        Beginning with the year ending December 31, 2007, Section 404 of the Sarbanes-Oxley Act of 2002 will require us to include management's report on our internal control over financial reporting in our Annual Report on Form 10-K. The internal control report must contain (1) a statement of management's responsibility for establishing and maintaining adequate internal control over our financial reporting, (2) a statement identifying the framework used by management to conduct the required evaluation of the effectiveness of our internal control over financial reporting, (3) management's assessment of the effectiveness of our internal control over financial reporting as of the end of our most recent fiscal year, including a statement as to whether or not our internal control over financial reporting is effective, and (4) a statement that our registered independent public accounting firm has issued an attestation report on management's assessment of our internal control over financial reporting.

        In order to achieve compliance with Section 404 within the prescribed period, management has commenced a Section 404 compliance project under which management has engaged outside consultants and adopted a detailed project work plan to assess the adequacy of our internal control over financial reporting, remediate any control deficiencies that may be identified, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Except as described above, during the fourth quarter of fiscal year 2005, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(c)

Inherent limitations of the effectiveness of internal control.

        A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

ITEM 9B. OTHER INFORMATION

        None.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        Incorporated herein by reference from the Company's definitive proxy statement, which will be filed no later than 120 days after December 31, 2005.

        Information regarding the Company's Director Code of Conduct, Code of Conduct, Code of Ethics for the Chief Executive Officer, Code of Ethics for the Chief Financial Officer, Code of Ethics for President and Chief Operating Officer and Code of Ethics for Principal Accounting Officer are incorporated herein by reference from the Company's definitive proxy statement, which will be filed no later than 120 days after December 31, 2005. Any amendments to, or waivers from, a provision of our codes of ethics that apply to our principal executive officer, principal financial officer, controller, or persons performing similar functions and that relates to any element of the code of ethics enumerated in paragraph (b) of Item 406 of Regulation S-K shall be disclosed by posting such information on our website at www.chipotle.com.

ITEM 11. EXECUTIVE COMPENSATION

        Incorporated herein by reference from the Company's definitive proxy statement, which will be filed no later than 120 days after December 31, 2005.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

        Incorporated herein by reference from the Company's definitive proxy statement, which will be filed no later than 120 days after December 31, 2005.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

        Incorporated herein by reference from the Company's definitive proxy statement, which will be filed no later than 120 days after December 31, 2005.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

        Incorporated herein by reference from the Company's definitive proxy statement, which will be filed no later than 120 days after December 31, 2005.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

1.    All Financial statements

        Consolidated financial statements filed as part of this report are listed under Item 8 "Financial Statements and Supplementary Data."

2.

Financial statement schedules

        No schedules are required because either the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.

3.

Exhibits

        The exhibits listed in the accompanying index are filed as part of this report.

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of Chipotle Mexican Grill, Inc.
3.2	Restated Bylaws of Chipotle Mexican Grill, Inc.
4.1	Form of Stock Certificate for Class A Common and Class B Common Shares
10.1	Chipotle Executive Stock Option Plan.*†
10.2	Chipotle Stock Appreciation Rights Plan.*†
10.3	Chipotle 2006 Cash Incentive Plan.*†
10.4	Chipotle 2006 Stock Incentive Compensation Plan, including the form of Option Agreement and the form of Option Agreement for converted SARs.*†
10.5	Services Agreement between Chipotle Mexican Grill, Inc. and McDonald's Corporation.
10.6	Amended and Restated Registration Rights Agreement among Chipotle Mexican Grill, Inc., McDonald's Ventures, LLC and certain shareholders.
10.7	Restricted Stock Award Agreement between Chipotle Mexican Grill, Inc. and Montgomery F. Moran.*†
10.8	Summary of Director Compensation†
21.1	Subsidiaries of Chipotle Mexican Grill, Inc.*
23.1	Consent of Ernst & Young LLP.
24.1	Power of Attorney (included on signature pages hereto).
31.1	Certification of Chief Executive Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3	Certification of President of Chipotle Mexican Grill, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer, Chief Financial Officer and President of Chipotle Mexican Grill, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

†

Management contract or compensatory plan or arrangement.

*

Incorporated herein by reference to the Chipotle Mexican Grill, Inc.'s Registration Statement on Form S-1 (File No. 333-129221).

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SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHIPOTLE MEXICAN GRILL, INC.
By:	/s/  JOHN R. HARTUNG Name: John R. Hartung Title: Chief Finance and Development Officer

Date: March 17, 2006

        KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Steve Ells, Montgomery Moran and John Hartung, and each of them, his or her true and lawful attorneys-in-fact, each with full power of substitution, for him or her in any and all capacities, to sign any amendments to this report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact or their substitute or substitutes may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Date	Title
/s/  STEVE ELLS Steve Ells	March 17, 2006	Chief Executive Officer (principal executive officer) and Chairman of the Board of Directors
/s/  MONTGOMERY F. MORAN Montgomery F. Moran	March 17, 2006	President and Chief Operating Officer (principal operating officer)
/s/  JOHN R. HARTUNG John R. Hartung	March 17, 2006	Chief Finance and Development Officer (principal financial officer)
/s/  ROBIN S. ANDERSON Robin S. Anderson	March 17, 2006	Executive Director and Controller (principal accounting officer)
/s/  ALBERT S. BALDOCCHI Albert S. Baldocchi	March 17, 2006	Director
/s/  JOHN S. CHARLESWORTH John S. Charlesworth	March 17, 2006	Director
/s/  PATRICK J. FLYNN Patrick J. Flynn	March 17, 2006	Director
/s/  DARLENE J. FRIEDMAN Darlene J. Friedman	March 17, 2006	Director
/s/  MATS LEDERHAUSEN Mats Lederhausen	March 17, 2006	Director

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EX-3.1

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Exhibit 3.1

DELAWARE

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF "CHIPOTLE MEXICAN GRILL, INC.", FILED IN THIS OFFICE ON THE THIRTY-FIRST DAY OF JANUARY, A.D. 2006, AT 8:13 O'CLOCK A.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

/s/  HARRIET SMITH WINDSOR Harriet Smith Windsor, Secretary of State
AUTHENTICATION: 4487456
DATE: 01-31-06

RESTATED CERTIFICATE OF INCORPORATION OF
CHIPOTLE MEXICAN GRILL, INC.

        Chipotle Mexican Grill, Inc., a corporation originally organized in the State of Delaware on January 30, 1998, hereby certifies that this Restated Certificate of Incorporation was duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware. This Restated Certificate of Incorporation amends and restates the Corporation's Certificate of Incorporation in its entirety as follows:

ARTICLE I—NAME

        The name of the company is Chipotle Mexican Grill, Inc. (the "Corporation").

ARTICLE II—AGENT

        The registered office of the Corporation is located at 2711 Centerville Road, Suite 400, in the City of Wilmington, in the County of New Castle, in the State of Delaware. The name of its registered agent at that address is Corporation Service Company.

ARTICLE III—PURPOSE

        The purpose for which the Corporation is organized is to engage in any lawful act or activity for which corporations may be organized and incorporated under the General Corporation Law of the State of Delaware or any applicable successor act thereto, as the same may be amended from time to time (the "DGCL").

ARTICLE IV—STOCK

        Section 1.    Authorized Stock. The Corporation shall have the authority to issue eight hundred thirty million (830,000,000) shares of capital stock, consisting of two hundred million (200,000,000) shares of Class A common stock with a par value of $0.01 per share (the "Class A Common Stock"), thirty million (30,000,000) shares of Class B common stock with a par value of $0.01 per share (the "Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock"), and six hundred million (600,000,000) shares of preferred stock with a par value of $0.01 per share (the "Preferred Stock"). The number of authorized shares of Class A Common Stock or Class B Common Stock may be increased or decreased (but not below the number of shares of Class A Common Stock or Class B Common Stock then outstanding) by such affirmative vote as may be required at that time by the DGCL.

        Section 2.    Common Stock.

        (a)    Ranking. The preferences, limitations and rights of the Class A Common Stock and Class B Common Stock, and the qualifications and restrictions thereof, shall be in all respects identical, except as otherwise required by law or expressly provided in this Certificate of Incorporation.

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        (b)    Voting—General. Except as otherwise provided by law or by the resolution or resolutions providing for the issue of any series of Preferred Stock, the holders of outstanding shares of Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes. Except as otherwise required by law or this Certificate of Incorporation:

        (i)    each share of Class A Common Stock outstanding on any record date shall be entitled to one vote and each share of Class B Common Stock outstanding on such record date shall be entitled to 10 votes in respect of any actions of shareholders for which such record date was fixed; provided, however, that each share of Common Stock shall have one vote only for purposes of approving any of the following matters:

        (A)    the consummation of any merger or consolidation of the Corporation, or the issuance, sale, transfer or assignment of securities of the Corporation that would, following such issuance, sale, transfer or assignment, represent a majority of the voting power of the Corporation's then-outstanding Common Stock to any person, in a single transaction or series of related transactions;

        (B)    the sale, lease, exchange or other disposition of all or substantially all of the assets of the Corporation or any of its subsidiaries, directly or indirectly, in one or more transactions, to any person; or

        (C)    the voluntary liquidation, dissolution or winding up of the Corporation;

        (ii)    the Class A Common Stock and the Class B Common Stock shall vote together as a single class;

        (iii)    the vote required to constitute approval of any corporate action shall be a majority of all votes cast on the matter by the holders of outstanding shares of Common Stock at a meeting at which a quorum exists; and

        (iv)    holders of Common Stock shall be entitled to cast votes in person or by proxy in the manner and to the extent permitted under the Bylaws of the Corporation (the "Bylaws").

        (c)    Amendments. So long as any shares of Class A Common Stock are outstanding, the Corporation shall not, without the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Class A Common Stock, (i) amend, alter or repeal any provision of this Section so as to affect adversely the relative rights, preferences, qualifications, limitations or restrictions of the Class A Common Stock as compared to those of the Class B Common Stock; or (ii) take any other action upon which class voting is required by law. So long as any shares of Class B Common Stock are outstanding, the Corporation shall not, without the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Class B Common Stock, (i) amend, alter or repeal any provision of this Section so as to affect adversely the relative rights, preferences, qualifications, limitations or restrictions of the Class B Common Stock as compared to those of the Class A Common Stock; or (ii) take any other action upon which class voting is required by law.

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        (d)    Dividends; Changes in Common Stock. No dividend or distribution may be declared or paid on any share of Class A Common Stock unless a dividend or distribution, payable in the same consideration and manner, is simultaneously declared or paid, as the case may be, on each share of Class B Common Stock, nor shall any dividend or distribution declared or paid on any share of Class B Common Stock unless a dividend or distribution, payable in the same consideration and manner, is simultaneously declared or paid, as the case may be, on each share of Class A Common Stock, in each case without preference or priority of any kind; provided, however, that if dividends are declared that are payable in shares of Class A Common Stock or in Class B Common Stock or in rights, options, warrants or other securities convertible into or exchangeable for shares of Class A Common Stock or Class B Common Stock, dividends shall be declared that are payable at the same rate on both classes of Common Stock and the dividends payable in shares of Class A Common Stock or in rights, options, warrants or other securities convertible into or exchangeable for shares of Class A Common Stock shall be payable to holders of Class A Common Stock and the dividends payable in shares of Class B Common Stock or in rights, options, warrants or other securities convertible into or exchangeable for shares of Class B Common Stock shall be payable to holders of Class B Common Stock.

        If the Corporation in any manner subdivides or combines the outstanding shares of Class B Common Stock, the outstanding shares of the Class A Common Stock shall be proportionately subdivided or combined, as the case may be. Similarly, if the Corporation in any manner subdivides or combines the outstanding shares of Class A Common Stock, the outstanding shares of Class B Common Stock shall be proportionately subdivided or combined, as the case may be.

        (e)    Liquidation. Subject to the rights of the holders of Preferred Stock, shares of Class B Common Stock shall rank pari passu with shares of Class A Common Stock as to distribution of assets in the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary. A liquidation, dissolution or winding up of the Corporation, as such terms are used in this paragraph (e), shall not be deemed to be occasioned by or to include any voluntary consolidation or merger of the Corporation with or into any other corporation or other entity or corporations or other entities or a sale, lease or conveyance of all or a part of its assets.

        (f)    Reorganization or Merger. Subject to the rights of the holders of Preferred Stock, in case of any reorganization, share exchange or merger of the Corporation with another corporation in which shares of Class A Common Stock or Class B Common Stock are converted into (or entitled to receive with respect thereto) shares of stock and/or other securities or property (including cash), each holder of a share of Class A Common Stock and each holder of a share of Class B Common Stock shall be entitled to receive with respect to each such share the same kind and amount of shares of stock and other securities and property (including cash). In the event that the holders of shares of Class A Common Stock or of shares of Class B Common Stock are granted rights to elect to receive one of two or more alternative forms of consideration, the foregoing provision shall be deemed satisfied if holders of shares of Class A Common Stock and holders of shares of Class B Common Stock are granted substantially identical election rights, as the case may be.

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        (g)    Conversion of Class B Common Stock.

        (i)    Prior to the date on which shares of Class B Common Stock are transferred to shareholders of McDonald's Corporation in a transaction, including any distribution in exchange for McDonald's Corporation's share or securities, intended to qualify as a tax-free distribution under Section 355 of the Internal Revenue Code, or any corresponding provision of any successor statute (a "Tax-Free Spin-Off"), each record holder of shares of Class B Common Stock may convert any or all of such shares into an equal number of shares of Class A Common Stock by surrendering the certificates, if any, for such shares, accompanied by any payment required for documentary, stamp or similar issue or transfer taxes and by a written notice by such record holder to the Corporation stating that such record holder desires to convert such shares of Class B Common Stock into the same number of shares of Class A Common Stock (including, but not limited to, for the purpose of the sale or other disposition of such shares of Class A Common Stock), and requesting that the Corporation issue all of such shares of Class A Common Stock to persons named in such notice. Such notice shall set forth the number of shares of Class A Common Stock to be issued to each such person and the denominations in which the certificates, if any, therefor are to be issued. To the extent permitted by law, such voluntary conversion shall be deemed to have been effected at the close of business on the date of such surrender. Following a Tax-Free Spin-Off, shares of Class B Common Stock shall no longer be convertible into shares of Class A Common Stock. For purposes of this Section, a Tax-Free Spin-Off shall be deemed to have occurred at the time the shares are first transferred to shareholders of McDonald's following receipt of a certificate described in Section 2(g)(vii)(B) below.

        (ii)    Prior to a Tax-Free Spin-Off, each share of Class B Common Stock shall automatically be converted into one share of Class A Common Stock upon the transfer of such share if, after such transfer, such share is not beneficially owned by McDonald's or a subsidiary of McDonald's. Shares of Class B Common Stock shall not convert automatically into shares of Class A Common Stock (A) as a result of a distribution of Class B Common Stock to shareholders of McDonald's in a Tax-Free Spin-Off or (B) in any transfer after a Tax-Free Spin-Off.

        (iii)    Prior to a Tax-Free Spin-Off, each outstanding share of Class B Common Stock shall automatically be converted into one share of Class A Common Stock if such action is approved by the affirmative vote of the holders of not less than a majority of the voting power of the then-outstanding shares of Class B Common Stock.

        (iv)    The Corporation shall provide notice of (A) any automatic conversion of outstanding shares of Class B Common Stock to holders of record of such shares of Common Stock pursuant to Section 2(g)(ii) above as soon as practicable following such conversion; and (B) any automatic conversion of all outstanding shares of Class B Common Stock pursuant to Section 2(g)(iii) above to all holders of record of Common Stock as soon as practicable following such conversion; provided, however, that the Corporation may satisfy such notice requirements by providing such notice prior to such conversion. Such notice shall be provided by any means then permitted by the DGCL; provided, however, that no failure to give such notice nor any defect therein shall affect the validity of the automatic conversion of any shares of Class B Common Stock. Each such notice shall, as appropriate, (A) state the automatic conversion date; (B) identify the outstanding shares of Class B Common Stock that are automatically converted; and (C) the place or places where certificates if any, for such shares may be surrendered in exchange for certificates, if any, representing Class A Common Stock, or the method by which book-entry interest in the Class A Common Stock may be obtained in exchange for such certificates in respect of shares of Class B Common Stock.

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        (v)    Immediately upon conversion of any shares of Class B Common Stock into shares of Class A Common Stock pursuant to the provisions of this Article, the rights of the holders of shares of Class B Common Stock as such shall cease and such holders shall be treated for all purposes as having become the record owners of the shares of Class A Common Stock issuable upon such conversion; provided, that such persons shall be entitled to receive when paid any dividends declared on the Class B Common Stock as of a record date preceding the time of such conversion and unpaid as of the time of such conversion subject to the following sentence. Upon any conversion of shares of Class B Common Stock into shares of Class A Common Stock pursuant to the provisions of this Article, any dividend for which the record date or payment date shall be subsequent to such conversion which may have been declared on the shares of Class B Common Stock so converted shall be deemed to have been declared, and shall be payable, with respect to the shares of Class A Common Stock into or for which such shares of Class B Common Stock shall have been so converted, and any such dividend that shall have been declared on such shares payable in shares of Class B Common Stock shall be deemed to have been declared, and shall be payable, in shares of Class A Common Stock.

        (vi)    Prior to a Tax-Free Spin-Off, holders of shares of Class B Common Stock may (A) sell or otherwise dispose of or transfer any or all of such shares held by them, respectively, only in connection with a transfer that meets the qualifications of Section 2(g)(vii) below, and under no other circumstances; or (B) convert any or all of such shares into shares of Class A Common Stock (including, but not limited to, for the purpose of the sale or other disposition of such shares of Class A Common Stock to any person as provided in Section 2(g)(i) above). Prior to a Tax-Free Spin-Off, no one other than persons in whose names shares of Class B Common Stock become registered on the original stock ledger of the Corporation, or transferees or successive transferees who receive shares of Class B Common Stock in connection with a transfer meeting the qualifications set forth in Section 2(g)(vii) below, shall have the status of an owner or holder of shares of Class B Common Stock or be recognized as such by the Corporation or be otherwise entitled to enjoy for his or her own benefit the special rights and powers of a holder of shares of Class B Common Stock. Holders of shares of Class B Common Stock may at any and all times transfer to any person the shares of Class A Common Stock issuable upon conversion of such shares of Class B Common Stock (subject to any restrictions at such time on transfers of shares of Class A Common Stock).

        (vii)    Prior to a Tax-Free Spin-Off, shares of Class B Common Stock shall be transferred on the books of the Corporation upon presentation at the office of the Secretary of the Corporation (or at such additional place or places as may from time to time be designated by the Secretary or any Assistant Secretary of the Corporation) of proper transfer documents, accompanied by a certificate stating either (A) that such transfer is to McDonald's or a subsidiary of McDonald's; or (B) that such transfer is to the shareholders of McDonald's in connection with a Tax-Free Spin-Off.

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        (viii)    Prior to the occurrence of a Tax-Free Spin-Off, every certificate of shares of Class B Common Stock, if any, shall bear a legend on its face reading as follows:

        "THE SHARES OF CLASS B COMMON STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED TO ANY PERSON IN CONNECTION WITH A TRANSFER THAT DOES NOT MEET THE QUALIFICATIONS SET FORTH IN ARTICLE IV(2)(g)(vii) OF THE CERTIFICATE OF INCORPORATION OF THIS CORPORATION AND NO PERSON WHO RECEIVES SUCH SHARES IN CONNECTION WITH A TRANSFER THAT DOES NOT MEET THE QUALIFICATIONS PRESCRIBED IN SUCH ARTICLE IS ENTITLED TO OWN OR TO BE REGISTERED AS THE RECORD HOLDER OF SUCH SHARES OF CLASS B COMMON STOCK, BUT THE RECORD HOLDER OF THIS CERTIFICATE MAY AT SUCH TIME AND IN THE MANNER SET FORTH IN ARTICLE IV(2)(g) OF THE CERTIFICATE OF INCORPORATION OF THIS CORPORATION CONVERT SUCH SHARES OF CLASS B COMMON STOCK IN TO THE SAME NUMBER OF SHARES OF CLASS A COMMON STOCK FOR PURPOSES OF EFFECTING THE SALE OR OTHER DISPOSITION OF SUCH SHARES OF CLASS A COMMON STOCK TO ANY PERSON. EACH HOLDER OF THIS CERTIFICATE, BY ACCEPTING THE SAME, ACCEPTS AND AGREES TO ALL OF THE FOREGOING."

        Upon and after the transfer of shares of Class B Common Stock in a Tax-Free Spin-Off, certificates for shares of Class B Common Stock, if any, shall not longer bear the legend set forth above.

        (ix)    The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock, such number of shares of Class A Common Stock as would become issuable upon the conversion of all shares of Class B Common Stock then outstanding.

        Section 3.    Preferred Stock. The Preferred Stock may be issued from time to time in one or more classes or series. The Board of Directors of the Corporation (the "Board of Directors") is hereby authorized to provide for the issuance of shares of Preferred Stock in one or more classes or series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as "Preferred Stock Designation"), to establish from time to time the number of shares to be included in each such class or series, and to fix the designation, powers, preferences and rights of the shares of each such class or series and the qualifications, limitations and restrictions thereof prior to its issuance. Each such class or series of Preferred Stock shall have such voting powers, full or limited, or no voting powers, as shall be authorized by the Board of Directors and stated in the applicable Preferred Stock Designation.

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        The Common Stock shall be subject to the express terms of any series of Preferred Stock. Except as required by a Preferred Stock Designation or applicable law, holders of Preferred Stock shall not be entitled to vote at or receive notice of any meeting of shareholders.

Section 4.    Reclassification and Stock Split.    

        (a)    Reclassification.    Immediately upon the filing of this Certificate of Incorporation with the Secretary of State of the State of Delaware (the "Effective Time"), each of the shares of (i) common stock, par value $0.01 per share, (ii) the Series B Preferred Stock, par value $0.01 per share, (iii) the Series C Preferred Stock, par value $0.01 per share, and (iv) the Series D Preferred Stock, par value $0.01 per share, of the Corporation (the common stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, collectively, the "Old Stock") issued and outstanding as of the close of business on the day prior to the Effective Time shall be reclassified into and shall become one-third of one share of Class B Common Stock (the "Reclassification").

        (b)    Certificates.    The reclassification of the Old Stock into Class B Common Stock shall be deemed to occur at the Effective Time, regardless of when any certificate previously representing such shares of Old Stock (if such shares are held in certificated form) are physically surrendered to the Corporation in exchange for certificates representing such new Class B Common Stock. Each certificate outstanding immediately prior to the Effective Time representing shares of Old Stock shall, until surrendered to the Corporation in exchange for a certificate representing such new number of shares of Class B Common Stock as determined in paragraph (a), automatically represent from and after the Effective Time the reclassified number of shares of Class B Common Stock.

        (c)    Status.    The Corporation shall not close its books against the transfer of the Old Stock in any manner that interferes with the Reclassification. All shares of Class A Common Stock and Class B Common Stock outstanding after the Reclassification shall be duly and validly issued, fully paid and nonassessable and free from all taxes, liens and charges.

        Section 5.    No Fractional Shares.    No fractional shares of the capital stock of the Corporation shall be issued, but in lieu thereof the Corporation may, at its option, make a cash adjustment therefor.

ARTICLE V—BOARD OF DIRECTORS

        Section 1.    Number.    The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not fewer than three nor more than 20 directors (exclusive of directors referred to in the last paragraph of this Section 1), the exact number of directors to be determined from time to time by resolution adopted by the affirmative vote of a majority of the total number of directors then in office.

        From and after the date of the first meeting of the Board of Directors following the Effective Time, the directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The initial division of the Board of Directors into classes shall be made by the decision of the affirmative vote of a majority of the total number of directors then in office. Class I directors shall serve for an initial term ending at the annual meeting of shareholders held in 2006, Class II directors for an initial term ending at the annual meeting of shareholders held in 2007 and Class III directors for an initial term ending at the annual meeting of shareholders held in 2008. At each annual meeting of shareholders beginning in 2006, successors to the directors in the class whose term expires at that annual meeting shall be elected for a three-year term.

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        If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for the remaining term of that class, but in no case shall a decrease in the number of directors shorten the term of any incumbent director.

        Each director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Directors shall be elected by the affirmative vote of a plurality of the votes cast by shares entitled to vote in the election at a meeting at which a quorum is present.

        Elections of directors at an annual or special meeting of shareholders shall be by written ballot.

        Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of shareholders, the number of such directors and the election, term of office, filling of vacancies and other features of such directorships shall be governed by the provisions of Article V of this Certificate of Incorporation and any resolution or resolutions adopted by the Board of Directors pursuant thereto, and such directors shall not be divided into classes unless expressly so provided therein.

        Section 2.    Vacancies.    Any vacancy in the Board of Directors that results from an increase in the number of directors, from the death, disability, resignation, disqualification, removal of any director or from any other cause shall be filled by the affirmative vote of a majority of the total number of directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall hold office for the remaining term of his or her predecessor.

        Section 3.    Removal.    Any director or the entire Board may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of not less than 66²/3% of the voting power of the outstanding Common Stock.

        Section 4.    Committees.    Pursuant to the Bylaws, the Board of Directors may establish one or more committees to which may be delegated any of or all of the powers and duties of the Board of Directors to the full extent permitted by laws.

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ARTICLE VI—LIABILITY OF DIRECTORS AND OFFICERS

        Section 1.    Elimination of Certain Liability of Directors.    A director of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its shareholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the DGCL; or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL is hereafter amended to permit further elimination or limitation of the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.

Section 2.    Indemnification and Insurance.    

        (a)    Right to Indemnification.    Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, liens, amounts paid or to be paid in settlement and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that, except as provided in paragraph (b) hereof, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors. The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses (including attorney's fees) incurred in defending any such proceeding in advance of its final disposition provided, however, that, if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as such in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such director or officer is not entitled to be indemnified under this Section or otherwise (an "undertaking"); and provided further that such advancement of expenses incurred by any person other than a director or officer shall be made only upon the delivery of an undertaking to the foregoing effect and may be subject to such other conditions as the Board may deem advisable.

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        (b)    Non-Exclusivity of Rights; Accrued Rights.    The right to indemnification and the advancement of expenses conferred in this Section shall not be exclusive of any other right that any person may have or hereafter acquire under any statute, provision of this Certificate of Incorporation, Bylaw, agreement, vote of shareholders or disinterested directors or otherwise. Such rights shall be contract rights, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person's heirs, executors and administrators. Any repeal or modification of this Article shall not adversely affect any right or protection of a director of the Corporation in respect of any act or omission occurring prior to the time of such repeal or modification.

        (c)    Insurance.    The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

        (d)    Other Employees and Agents.    The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee not within the provisions of paragraph (a) of this Section or to any agent of the Corporation, subject to such conditions as the Board of Directors may deem advisable.

        (e)    Savings Clause.    If this Article VI or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each person entitled to indemnification hereunder as to all expense, liability, and loss (including attorney's fees, judgments, fines, ERISA excise taxes, penalties and amounts to be paid in settlement) actually and reasonably incurred or suffered by such person and for which indemnification is available to such person pursuant to this Article VI to the fullest extent permitted by any applicable portion of this Article VI that shall not have been invalidated and to the fullest extent permitted by applicable law.

ARTICLE VII—SECTION 203 OF THE DGCL

        The Corporation expressly elects to be governed by Section 203 of the DGCL.

ARTICLE VIII—CERTAIN CONTRACTS; CORPORATE OPPORTUNITY

        Section 1.    Regulation of Certain Affairs. In anticipation that:

        (a)    the Corporation will cease to be a wholly owned subsidiary of McDonald's, but that McDonald's will remain, for some period of time, a shareholder of the Corporation;

        (b)    the Corporation and McDonald's may engage in the same or similar activities or lines of business and have an interest in the same or similar areas of corporate opportunities; and

        (c)    there will be benefits to be derived by the Corporation through its contractual, corporate and business relations with McDonald's (including possible service of officers and directors of McDonald's as officers and directors of the Corporation) and there will be benefits in providing guidelines for directors and officers of McDonald's and of the Corporation with respect to the allocation of corporate opportunities and other matters;

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the provisions of this Article are set forth to regulate, define and guide the conduct of certain affairs of the Corporation as they may involve McDonald's and its officers and directors, and the powers, rights, duties and liabilities of the Corporation and its officers, directors and shareholders in connection therewith; provided, however, that nothing in this Article will impair the Corporation's ability to enter into contractual arrangements with a shareholder of the Corporation, which arrangements restrict the shareholder from engaging in activities otherwise allowed by this Article, and the following provisions shall be subject to any such contractual obligation of the Corporation.

        Section 2.    Certain Contracts.    No contract, agreement, arrangement or transaction between the Corporation and McDonald's shall be void or voidable solely for the reason that McDonald's is a party thereto, and McDonald's (a) shall have fully satisfied and fulfilled its fiduciary duties to the Corporation and its shareholders with respect thereto; (b) shall not be liable to the Corporation or its shareholders for any breach of fiduciary duty by reason of the entering into, performance or consummation of any such contract, agreement, arrangement or transaction; (c) shall be deemed to have acted in good faith and in a manner it reasonably believed to be in and not opposed to the best interests of the Corporation; and (d) shall be deemed not to have breached its duties of loyalty to the Corporation and its shareholders and not to have received an improper personal gain therefrom, if the material facts as to the contract, agreement, arrangement or transaction are disclosed or are known to the Board of Directors or the committee thereof that authorizes the contract, agreement, arrangement or transaction, and the Board of Directors or such committee in good faith authorizes the contract, agreement, arrangement or transaction by the affirmative vote of a majority of the disinterested directors, even though less than a quorum. Directors of the Corporation who are also directors or officers of McDonald's may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee that authorizes the contract, agreement, arrangement or transaction.

Section 3.    Competition and Corporate Opportunities.    Subject to any contractual provisions to the contrary, McDonald's shall have the right to, and shall have no duty hereunder to refrain from, (a) engaging in the same or similar activities or lines of business as the Corporation; (b) doing business with any potential or actual customer or supplier of the Corporation; or (c) employing or otherwise engaging any officer or employee of the Corporation. To the fullest extent permitted by law, neither McDonald's nor any officer or director thereof (except as provided in this Article) shall be liable to the Corporation or its shareholders for breach of any fiduciary duty by reason of any such activities of McDonald's, or such person's participation therein.

        In the event that McDonald's acquires knowledge of a potential transaction or matter which may be a corporate opportunity for both McDonald's and the Corporation, McDonald's shall have no duty to communicate or present such corporate opportunity to the Corporation, and shall not be liable to the Corporation or its shareholders for breach of any fiduciary duty as a shareholder of the Corporation by reason of the fact that McDonald's pursues or acquires such corporate opportunity for itself, directs such corporate opportunity to another person, or does not communicate information regarding such corporate opportunity to the Corporation.

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Section 4.    Allocation of Corporate Opportunities.    In the event that a director or officer of the Corporation who is also a director or officer of McDonald's acquires knowledge of a potential transaction or matter which may be a corporate opportunity for both the Corporation and McDonald's, to the fullest extent permitted by law, such director or officer of the Corporation:

        (a)    shall be deemed to have fully satisfied and fulfilled such person's fiduciary duty to the Corporation and its shareholders with respect to such corporate opportunity;

        (b)    shall not be liable to the Corporation or its shareholders for breach of any fiduciary duty by reason of the fact that McDonald's pursues or acquires such corporate opportunity for itself or directs such corporate opportunity to another person (including, without limitation, McDonald's) or does not communicate information regarding such corporate opportunity to the Corporation;

        (c)    shall be deemed to have acted in good faith and in a manner such person reasonably believes to be in or not opposed to the best interests of the Corporation; and

        (d)    shall be deemed not to have breached such person's duty of loyalty to the Corporation or its shareholders and not to have derived an improper personal economic gain or other benefit therefrom, if such director or officer acts in a manner consistent with the following policy:

        (i)    a corporate opportunity offered to any person who is an officer or employee (whether or not a director) of the Corporation, and who is also a director but not an officer or employee of McDonald's, shall belong to the Corporation, unless such opportunity is expressly offered to such person primarily in his or her capacity as a director of McDonald's, in which case such opportunity shall belong to McDonald's;

        (ii)    a corporate opportunity offered to any person who is a director but not an officer or employee of the Corporation, and who is also an officer or employee (whether or not a director) of McDonald's shall belong to McDonald's unless such opportunity is expressly offered to such person primarily in his or her capacity as a director of the Corporation, in which case such opportunity shall belong to the Corporation;

        (iii)    a corporate opportunity offered to any person who is either (1) an officer or employee of both the Corporation and McDonald's; or (2) a director of both the Corporation and McDonald's (but not an officer or employee of the Corporation or McDonald's), shall belong to McDonald's unless such opportunity is expressly offered to such person primarily in his or her capacity as a director of the Corporation, in which case such opportunity shall belong to the Corporation.

        Section 5.    Non-Pursuit.    Any corporate opportunity that belongs to McDonald's or to the Corporation pursuant to the foregoing policy shall not be pursued by the other, unless and until the party to whom the opportunity belongs determines not to pursue the opportunity and so informs the other party.

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        Section 6.    Deemed Notice.    Any person or entity purchasing or otherwise acquiring any interest in any shares of the capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article.

        Section 7.    Chairman or Chairman of a Committee.    For purposes of this Article, a director who is chairman of the Board of Directors or chairman of a committee of the Board of Directors is not deemed an officer of the Corporation by reason of holding that position unless that person is a full-time employee of the Corporation.

        Section 8.    Expiration of Certain Provisions.    Notwithstanding anything in this Certificate of Incorporation to the contrary, (a) this Article shall expire on the date that McDonald's ceases to beneficially own shares representing at least 5% of the voting power of the outstanding Common Stock and no person who is a director or officer of the Corporation is also a director or officer of McDonald's; and (b) in addition to any vote of the shareholders required by this Certificate of Incorporation, until the time that McDonald's ceases to beneficially own shares representing at least 5% of the voting power of the outstanding Common Stock, the affirmative vote of the holders of at least 66²/3% of the voting power of the outstanding Common Stock entitled to vote thereon shall be required to alter, amend, repeal (by merger or otherwise, in a manner adverse to the interests of McDonald's) or adopt any provision adverse to the interests of McDonald's and inconsistent with any provision of this Article.

        Neither the alteration, amendment or repeal of this Article nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article shall eliminate or reduce the effect of this Article in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article, would accrue or arise, prior to such alteration, amendment, repeal or adoption. Following the time that McDonald's ceases to beneficially own shares representing at least 5% of the voting power of the outstanding Common Stock, any contract, agreement, arrangement or transaction involving a corporate opportunity shall not be reason thereof result in any breach of any fiduciary duty or duty of loyalty or failure to act in good faith or in the best interests of the Corporation or derivation of any improper benefit or personal economic gain, but shall be governed by the other provisions of this Certificate of Incorporation, the Bylaws, the DGCL and other applicable law.

ARTICLE IX—CONSIDERATION OF OTHER CONSTITUENCIES

        In addition to any other considerations which they may lawfully take into account in determining whether to take or to refrain from taking action on any matter and in discharging their duties under applicable law and this Certificate of Incorporation, the Board of Directors, its committees and each director may take into account the interests of customers, distributors, suppliers, creditors, current and retired employees and other constituencies of the Corporation and its subsidiaries and the effect upon the communities in which the Corporation and its subsidiaries do business; provided, however, that this Article shall be deemed solely to grant discretionary authority only and shall not be deemed to provide to any constituency a right to be considered.

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ARTICLE X—SHAREHOLDER ACTION

        Subject to the rights of the holders of Preferred Stock, any action required or permitted to be taken at any annual or special meeting of shareholders of the Corporation may be taken only upon the vote of the shareholders at an annual or special meeting duly called and may not be taken by written consent of the shareholders.

        The Bylaws may establish procedures regulating the submission by shareholders of nominations and proposals for consideration at meetings of shareholders of the Corporation.

ARTICLE XI—SPECIAL MEETINGS

        Subject to the rights of the holders of Preferred Stock, special meetings of the shareholders may be called at any time only by the Board of Directors pursuant to a resolution adopted by the affirmative vote of a majority of the total number of directors then in office or by the chairman of the Board of Directors.

ARTICLE XII—AMENDMENT OF CERTIFICATE OF INCORPORATION

        Subject to any requirement of applicable law or any other provision of this Certificate of Incorporation and to any voting rights granted to or held by the holders of any series of Preferred Stock, the Corporation reserves the right at any time from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and any other provisions authorized by the DGCL at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon shareholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the right reserved in this Article. In addition to any affirmative vote required by applicable law or any other provision of this Certificate of Incorporation or specified in any agreement, and in addition to any voting rights granted to or held by the holders of any series of Preferred Stock, the affirmative vote of the holders of a majority of the voting power of the outstanding Common Stock shall be required to amend, add, alter, change, repeal or adopt any provisions inconsistent with this Certificate of Incorporation.

ARTICLE XIII—AMENDMENT OF BY-LAWS

        The Board of Directors is expressly authorized and empowered to adopt, amend and repeal the Bylaws by the affirmative vote of a majority of the total number of directors present at a regular or special meeting of the Board of Directors at which there is a quorum (as defined from time to time in the Certificate of Incorporation) or by written consent. The shareholders of the Corporation may not adopt, amend or repeal any Bylaw, and no provision inconsistent therewith shall be adopted by the shareholders, unless such action is approved by the affirmative vote of the holders of not less than 66²/3% of the voting power of the outstanding Common Stock.

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ARTICLE XIV—DEFINITIONS

        Except as otherwise defined in this Certificate of Incorporation, the following terms shall have the meanings ascribed to them below:

        (a)    "beneficial ownership" shall have the meaning given to such term in Rule 13d-3 promulgated under the Securities Exchange Act of 1934.

        (b)    "corporate opportunities" shall include, but not be limited to, business opportunities which (i) the Corporation is financially able to undertake; (ii) are, from their nature, in the line or lines of the Corporation's business; (iii) are of practical advantage to the Corporation; (iv) are ones in which the Corporation has an interest or reasonable expectancy; and (v) are ones in which, by embracing the opportunities, the self-interest of McDonald's or its officers or directors may be brought into conflict with that of the Corporation.

        (c)    "McDonald's" shall mean McDonald's Corporation, an Delaware corporation, and any of its successors by way of merger, share exchange or sale of all or substantially all of its assets, and all subsidiaries of McDonald's; provided, however, that for purposes of Article VIII, "McDonald's" shall not include the Corporation or any of the Corporation's subsidiaries.

        (d)    "person" shall mean a natural person, corporation, partnership, joint venture, association, or legal entity of any kind; each reference to a "natural person (or to a "record holder" of shares, if a natural person) shall be deemed to include in his or her representative capacity a guardian, committee, executor, administrator or other legal representative of such natural person or record holder.

        (e)    "subsidiary" shall mean, as to any person, a corporation, partnership, joint venture, association or other entity in which such person beneficially owns (directly or indirectly) 50% or more of the outstanding voting power or partnership interests or similar voting interests.

        The undersigned has executed this Restated Certificate of Incorporation of Chipotle Mexican Grill, Inc., effective as of the date of filing with the Secretary of State of Delaware.

CHIPOTLE MEXICAN GRILL, INC.
By:	/s/  STEVE ELLS
	Name:	Steve Ells
	Title:	Chairman and Chief Executive Officer

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Exhibit 3.1

RESTATED CERTIFICATE OF INCORPORATION OF CHIPOTLE MEXICAN GRILL, INC.
ARTICLE I—NAME
ARTICLE II—AGENT
ARTICLE III—PURPOSE
ARTICLE IV—STOCK
ARTICLE V—BOARD OF DIRECTORS
ARTICLE VI—LIABILITY OF DIRECTORS AND OFFICERS
ARTICLE VII—SECTION 203 OF THE DGCL
ARTICLE VIII—CERTAIN CONTRACTS; CORPORATE OPPORTUNITY
ARTICLE IX—CONSIDERATION OF OTHER CONSTITUENCIES
ARTICLE X—SHAREHOLDER ACTION
ARTICLE XI—SPECIAL MEETINGS
ARTICLE XII—AMENDMENT OF CERTIFICATE OF INCORPORATION
ARTICLE XIII—AMENDMENT OF BY-LAWS
ARTICLE XIV—DEFINITIONS

EX-3.2

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Exhibit 3.2

CHIPOTLE MEXICAN GRILL, INC.
RESTATED BYLAWS
(as of January 31, 2006)
ARTICLE I—OFFICES

Section 1.    Registered Office.    Chipotle Mexican Grill, Inc. (the "Corporation") shall have and maintain at all time (a) a registered office in the State of Delaware, which office shall be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, in the County of New Castle, in the State of Delaware 19808; and (b) a registered agent located at such address whose name is Corporation Service Company, until changed from time to time as provided by the General Corporation Law of the State of Delaware (the "DGCL").

Section 2.    Other Offices.    The principal office of the Corporation may be located within or without the State of Delaware, as designated by the Board of Directors of the Corporation (the "Board of Directors"). The Corporation may have other offices and places of business at such places within or without the State of Delaware as shall be determined by the directors or as may be required by the business of the Corporation.

ARTICLE II—SHAREHOLDERS

Section 1.    Annual Meeting.    Annual meetings of the shareholders, for the purpose of election of directors to succeed those whose terms expire and for such other business as may properly come before it, shall be held at such place, either within or without the State of Delaware (including by remote communication as authorized by Section 211(a)(2) of the DGCL), on such date and at such time as the Board of Directors shall designate from time to time, as set forth in the notice of the meeting delivered or mailed to shareholders.

Section 2.    Special Meetings.    Subject to the rights of the holders of the preferred stock, par value $0.01 per share, of the Corporation (the "Preferred Stock"), special meetings of the shareholders, for any purpose or purposes prescribed in the notice of the meeting, may be called only by the Board of Directors pursuant to a resolution adopted by the affirmative vote of a majority of the total number of directors then in office or by the Chairman of the Board, and shall be held at such place, either within or without the State of Delaware, on such date and at such time as they or he or she shall designate, as set forth in the notice of the meeting.

Section 3.    Notice of Meetings.    Except as otherwise provided by law or the Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), written notice of the place, date, time and purpose of all meetings of the shareholders shall be given, not less than ten nor more than 60 days before the date on which the meeting is to be held, to each shareholder entitled to vote at such meeting, except that where the matter to be acted on is one specified in Section 2(b)(i) of the Certificate of Incorporation, such notice shall be given no less than 20 nor more than 60 days before the date on which the meeting is to be held.

        If at any meeting action is proposed to be taken which, if taken, would entitle shareholders fulfilling the requirements of Section 262(d) of the DGCL to an appraisal of the fair value of their shares, the notice of such meeting shall contain a statement of that purpose and to that effect and shall be accompanied by a copy of that statutory Section.

        When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of any adjourned meeting is more than 30 days after the date of the original meeting, or if a new record date is fixed for the adjourned meeting, written notice of the place, date, and time of the adjourned meeting shall be given in conformity herewith. At any adjourned meeting, any business may be transacted which might have been transacted at the original meeting.

        Notice of the time, place and purpose of any meeting of shareholders may be waived in writing, either before or after such meeting, and to the extent permitted by law, shall be waived by any shareholder by his or her attendance thereat, in person or by proxy. Any shareholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.

Section 4.    Quorum.    At any meeting of the shareholders, the holders of a majority in voting power of the outstanding shares of capital stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law, the Certificate of Incorporation or these Bylaws. Where a separate vote by a class or classes is required, a majority in voting power of the shares of such class or classes present in person or by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter.

        If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority in voting power of the outstanding shares of capital stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time, without notice other than as specified in Section 3 of this Article.

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Section 5.    Organization.    Such person as the Chairman of the Board may have designated or, in the absence of such a person, such person as the Board of Directors may have designated or, in his or her absence, the Chief Executive Officer, or in his or her absence, such person as may be chosen by the holders of a majority of the voting power of the outstanding shares of capital stock entitled to vote who are present, in person or by proxy, shall call to order any meeting of the shareholders and act as chairman of the meeting. In the absence of the Secretary, the secretary of the meeting shall be such person as the chairman of the meeting appoints.

Section 6.    Conduct of Business.    The chairman of any meeting of shareholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seems to him or her in order. The date and time of the opening and closing of the polls for each matter upon which the shareholders will vote at the meeting shall be announced at the meeting.

Section 7.    Proxies and Voting.    At any meeting of the shareholders, every shareholder entitled to vote in accordance with the terms of the Certificate of Incorporation may vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no proxy shall be voted after three years from its date unless such proxy provides for a longer period. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile, telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

        All voting, except as provided in the Certificate of Incorporation or where otherwise required by law, may be by a voice vote; provided, however, that upon demand therefor by a shareholder entitled to vote or by his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballots, each of which shall state the name of the shareholder or proxy voting and such other information as may be required under the procedure established for the meeting.

        In advance of any meeting of shareholders, the Board of Directors shall appoint one or more inspectors to act at the meeting and make a written report thereof and may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of shareholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his ability and may perform such other duties not inconsistent herewith as may be requested by the Corporation.

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        Except as otherwise required by law, the Certificate of Incorporation or these Bylaws, the affirmative vote of the holders of not less than a majority of the voting power of the outstanding shares of capital stock cast at the meeting of the holders present in person or by proxy and entitled to vote on the subject matter shall be the act of the shareholders.

Section 8.    No Shareholder Action by Consent.    No action required to be taken or which may be taken at any annual or special meeting of shareholders of the Corporation may be taken without a meeting, and such actions may not be taken by written consent of the shareholders.

Section 9.    Notice of Shareholder Business and Nominations.    

        (a)(i)    To be properly brought before an annual meeting or special meeting, nominations of persons for election to the Board of Directors or other business must be (A) specified in the notice of meeting given by or at the direction of the Board of Directors; (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors; or (C) otherwise properly brought before the meeting by a shareholder.

        (ii)    For business to be properly brought before an annual meeting by a shareholder (A) the shareholder must have given timely notice thereof in writing to the Secretary; (B) the subject matter thereof must be a matter which is a proper subject matter for shareholder action at such meeting; and (C) the shareholder must be a shareholder of record of the Corporation at the time the notice required by this Section is delivered to the Corporation and must be entitled to vote at the meeting.

        (iii)    Except as otherwise provided in the Certificate of Incorporation, to be considered timely notice, a shareholder's notice must be received by the Secretary at the principal executive offices of the Corporation not less than 120 calendar days before the date of the Corporation's proxy statement released to shareholders in connection with the previous year's annual meeting of shareholders. If no annual meeting was held in the previous year, or if the date of the applicable annual meeting has been changed by more than 30 days from the date of the previous year's annual meeting, then a shareholder's notice, in order to be considered timely, must be received by the Secretary not later than the later of the close of business on the 90th day prior to such annual meeting or the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of such date was made.

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Such shareholder's notice shall set forth:

        (A)    as to each person whom the shareholder proposes to nominate for election as a director, (1) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case in accordance with Regulation 14A under the Securities Exchange Act of 1934 (the "Exchange Act") and such other information as may be required by the Corporation pursuant to any policy of the Corporation governing the selection of directors; and (2) such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected;

        (B)    as to any business the shareholder proposes to bring before the meeting, (1) a brief description of such business; (2) the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment); (3) the reasons for conducting such business at the meeting; and (4) any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal or nomination is made; and

        (C)    as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the proposal or nomination is made, (1) the name and address of such shareholder, as they appear on the Corporation's books, and of such beneficial owner; (2) the class and number of shares of the Corporation that are owned beneficially and held of record by such shareholder and such beneficial owner; (3) a representation that the shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination; and (4) a representation whether the shareholder or the beneficial owner, if any, intends or is part of a group which intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation's outstanding shares of capital stock required to approve or adopt the proposal or elect the nominee; and/or (y) otherwise to solicit proxies from shareholders in support of such proposal or nomination.

        The foregoing notice requirements shall be deemed satisfied by a shareholder if the shareholder has notified the Corporation of his or her intention to present a proposal or nomination at an annual meeting in compliance with applicable rules and regulations promulgated under the Exchange Act and such shareholder's proposal or nomination has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation. In addition, a shareholder seeking to bring an item of business before the annual meeting shall promptly provide any other information reasonably requested by the Corporation.

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        (iv)    Notwithstanding anything in paragraph (a)(iii) to the contrary, in the event that the number of directors to be elected to the Board of Directors at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least 100 days prior to the first anniversary of the preceding year's annual meeting, a shareholder's notice required by this Section shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.

        (b)    Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Corporation's notice of meeting (i) by or at the direction of the Board of Directors; or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Corporation who is a shareholder of record at the time the notice provided for in this Section is delivered to the Secretary, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section.

        Notwithstanding the foregoing provisions of this Section, a shareholder who seeks to have any proposal included in the Corporation's proxy materials must provide notice as required by and otherwise comply with the applicable requirements of the rules and regulations under the Exchange Act. Nothing in this Section shall be deemed to affect any rights (a) of shareholders to request inclusion of proposals or nominations in the Corporation's proxy statement pursuant to applicable rules and regulations promulgated under the Exchange Act; or (b) of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

        The chairman of an annual meeting shall determine all matters relating to the conduct of the meeting, including, but not limited to, determining whether any nomination or item of business has been properly brought before the meeting in accordance with these Bylaws (including whether the shareholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such shareholder's nominee or proposal in compliance with such shareholder's representation as required by clause (A)(iii)(C)(4) of this Section), and if the chairman should so determine and declare that any nomination or item of business has not been properly brought before an annual or special meeting, then such business shall not be transacted at such meeting and such nomination shall be disregarded.

        Notwithstanding the foregoing provisions of this Section, if the shareholder (or a qualified representative of the shareholder) does not appear at the annual or special meeting of shareholders of the Corporation to present a nomination or item of business, such proposed business shall not be transacted and such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

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Section 10.    Opening of Polls.    The date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of shareholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of shareholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such presiding person, are appropriate for the proper conduct of the meeting.

        Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding person of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to shareholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the presiding person of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants.

        The presiding person at any meeting of shareholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, such presiding person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.

ARTICLE III—BOARD OF DIRECTORS

Section 1.    Powers.    The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors. The Board of Directors may exercise all such authority and powers of the Corporation and do all such lawful acts and things as are not by law or otherwise directed or required to be exercised or done by the shareholders.

Section 2.    Number and Election.    Subject to the rights of holders of Preferred Stock, the number of directors shall be such number as is from time to time determined in the manner provided in the Certificate of Incorporation. The election of directors shall be conducted in the manner provided in the Certificate of Incorporation and each director so elected shall hold office as provided in the Certificate of Incorporation.

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Section 3.    Resignation.    Any director may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairman of the Board or the Chief Executive Officer. The acceptance of a resignation shall not be necessary to make it effective.

Section 4.    Vacancies.    Any vacancy on the Board of Directors, howsoever resulting, may only be filled in the manner provided in and to the extent permitted under the Certificate of Incorporation.

Section 5.    Removals.    Subject to the rights of the holders of Preferred Stock, any director, or the entire Board, may be removed from office in the manner provided in and to the extent permitted under the Certificate of Incorporation.

Section 6.    Annual Meeting.    The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of shareholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such other time or place (within or without the State of Delaware) as provided in Section 8 of this Article.

Section 7.    Regular Meetings.    Regular meetings of the Board of Directors shall be held at such place or places, on such date or dates, and at such time or times as shall have been established by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required.

Section 8.    Special Meetings.    Special meetings of the Board of Directors may be called by one-third of the directors then in office (rounded up to the nearest whole number), by the Chairman of the Board or by the Chief Executive Officer and shall be held at such place, on such date, and at such time as they or he or she shall fix. Notice of the place, date, and time of each such special meeting shall be given each director by whom it is not waived by mailing written notice not less than 24 hours before the meeting or such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. Notice of any such meeting need not be given to any director who shall, either before or after the meeting, submit a signed waiver of notice or who shall attend such meeting, except when such director attends for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

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Section 9.    Quorum.    At any meeting of the Board of Directors, a majority of the total number of directors then in office shall constitute a quorum for all purposes. If a quorum shall fail to attend any meeting, a majority of those present may adjourn the meeting to another place, date or time, without further notice or waiver thereof.

Section 10.    Participation in Meetings By Conference Telephone.    Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or of any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and such participation shall constitute presence in person at such meeting.

Section 11.    Conduct of Business.    At any meeting of the Board of Directors, business shall be transacted in such order and manner as the Board may from time to time determine, and all matters shall be determined by the vote of a majority of the total number of directors present at such meeting at which there is a quorum, except as otherwise provided in the Certificate of Incorporation or these Bylaws or as required by law. Action may be taken by the Board of Directors without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors.

Section 12.    Compensation of Directors.    Directors, as such, may receive, pursuant to resolution of the Board of Directors, fixed fees and other compensation for their services as directors, including, without limitation, their services as members of committees of the Board of Directors.

ARTICLE IV—COMMITTEES

Section 1.    Committees of the Board of Directors.    The Board of Directors shall appoint from among its members an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, each composed of at least two directors or such higher number of directors as may be required by law or the standards of any stock exchange on which shares of the Corporation are listed, with such lawfully delegable powers and duties as it thereby confers or that are required by law or such standards of any stock exchange on which shares of the Corporation are listed.

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        The Board of Directors may from time to time designate other committees of the Board, each composed of one or more directors, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board.

        In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member or members of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.

        Any such committee, to the extent provided in the resolution of the Board of Directors or these Bylaws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but (a) unless the resolution, the Certificate of Incorporation or these Bylaws expressly so provide, no such committee shall have the power or authority to declare a dividend, authorize the issuance of stock, to adopt a certificate of ownership and merger pursuant to Section 253 of the DGCL or to recommend to the shareholders either the sale, lease or exchange of all or substantially all of the Corporation's property and assets or a dissolution of the Corporation (or the revocation of a dissolution); and (b) no such committee shall have the power or authority of the Board of Directors in reference to adopting, amending or repealing any provision of the Certificate of Incorporation or these Bylaws or approving or adopting, or recommending to the shareholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval other than those identified in (a) above.

Section 2.    Term.    The Board, subject to the requirements specifically set forth in this Section, may at any time change, increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his death or resignation, but the Board may at any time for any reason remove any individual committee member and the Board may, subject to the requirements specifically set forth in this Section, fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may, subject to the requirements specifically set forth in this Section, designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may, subject to the requirements specifically set forth in this Section, unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

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Section 3.    Conduct of Business.    Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings; a majority of the members shall constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee.

ARTICLE V—OFFICERS

Section 1.    Generally.    The officers of the Corporation shall consist of a Chief Executive Officer, a President, a Chief Operating Officer, a Chief Financial Officer, a Secretary, a Treasurer, one or more Vice Presidents and such other officers as may from time to time be appointed by the Board of Directors. Officers shall be elected by the Board of Directors, which shall consider that subject at its first meeting after every annual meeting of shareholders. In addition, the Board of Directors may elect a Chairman of the Board and one or more Vice Chairmen from among its members. None of the officers of the Corporation need be directors. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any number of offices may be held by the same person.

Section 2.    Chairman of the Board.    The Chairman of the Board, or in the absence of the Chairman of the Board, a Vice Chairman, if any, or the President, if any, shall preside as chairman at meetings of the shareholders and the Board of Directors. The Chairman of the Board shall, in addition, have such other duties as the Board may prescribe that he or she perform. At the request of the Chief Executive Officer (if other than the Chairman of the Board), the Chairman of the Board may, in the case of the Chief Executive Officer's absence or inability to act, temporarily act in his place. In the case of death of the Chief Executive Officer or in the case of his absence or inability to act without having designated the Chairman of the Board to act temporarily in his place, the Chairman of the Board shall perform the duties of the Chief Executive Officer, unless the Board of Directors, by resolution, provides otherwise. If the Chairman of the Board shall be unable to act in place of the Chief Executive Officer, the Chief Financial Officer or the Chief Operating Officer may exercise such powers and perform such duties as provided below.

Section 3.    Chief Executive Officer.    Subject to the provisions of these Bylaws and to the direction of the Board of Directors, the Chief Executive Officer shall perform all duties and have all powers which are commonly incident to the office of chief executive or which are delegated to him or her by the Board of Directors. He or she shall have power to sign all contracts and other instruments of the Corporation that are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation.

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Section 4.    President.    Subject to the provisions of these Bylaws and to the direction of the Board of Directors, the President shall perform all duties and have all powers that are commonly incident to the office of president, including the power to sign any stock certificates, or that are delegated to him or her by the Board of Directors.

Section 5.    Chief Operating Officer.    The Chief Operating Officer shall be responsible for overseeing restaurant operations and for such other responsibilities as the Board of Directors may from time to time prescribe.

Section 6.    Chief Financial Officer.    The Chief Financial Officer shall have the responsibility for maintaining the financial records of the Corporation. He or she shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions and of the financial condition of the Corporation. The Chief Financial Officer shall also perform such other duties as the Board of Directors may from time to time prescribe.

Section 7.    Treasurer.    In addition to those responsibilities delegated to the Treasurer by the Board of Directors from time to time, the Treasurer may authenticate and sign on behalf of the Corporation any certificate representing any debt or equity security issued by the Corporation.

Section 8.    Secretary.    The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the shareholders and the Board of Directors. He or she shall have charge of the corporate books and shall perform such other duties as the Board of Directors may from time to time prescribe.

Section 9.    Vice Presidents.    Vice Presidents, if any, shall be elected and shall have such powers and perform such duties, respectively, as the Board of Directors may from time to time prescribe.

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Section 10.    Assistant Treasurers and Assistant Secretaries.    Assistant Treasurers and Assistant Secretaries, if any, shall be elected and shall have such powers and perform such duties, respectively, as the Board of Directors may from time to time prescribe.

Section 11.    Delegation Of Authority.    The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.

Section 12.    Resignation.    Any officer may resign at any time. Such resignation shall be made in writing, and shall take effect at the time specified therein, and if no time be specified, at the time of its receipt by the Chairman of the Board or the Chief Executive Officer. The acceptance of a resignation shall not be necessary to make it effective.

Section 13.    Removal.    Any officer of the Corporation may be removed at any time, with or without cause, by the Board of Directors. Nothing herein shall limit the power of any officer to discharge any subordinate.

Section 14.    Delegation of Duties.    Whenever an officer is absent, or whenever, for any reason, the Board of Directors may deem it desirable, the Board may delegate the powers and duties of an officer or officers or to any director or directors.

Section 15.    Officers' Bonds or Other Security.    If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety as the Board of Directors may require.

Section 16.    Compensation.    The compensation of the officers of the Corporation for their services as such shall be fixed from time to time by the Board of Directors. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that he is also a director of the Corporation.

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ARTICLE VI—EXECUTION OF CORPORATE INSTRUMENTS, AND VOTING
OF SECURITIES OWNED BY THE CORPORATION

Section 1.    Execution of Corporate Instruments.    The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute any corporate instrument or document, or to sign the corporate name without limitation, except where otherwise provided by law, and such execution or signature shall be binding upon the Corporation.

        Unless otherwise specifically determined by the Board of Directors or otherwise required by law, formal contracts of the Corporation, promissory notes, deeds of trust, mortgages and other evidences of indebtedness of the Corporation, and other corporate instruments or documents requiring the corporate seal shall be executed, signed or endorsed by the Chairman of the Board (if there be such an officer appointed) or by the Chief Executive Officer; in the alternative, such documents may be executed by the Chief Financial Officer or the Chief Operating Officer and countersigned or attested by the Secretary or Treasurer or any Assistant Secretary or Assistant Treasurer. Certificates of stock shall be signed as set forth in Section 1 of Article VII of these Bylaws. All other instruments and documents requiring the corporate signature, but not requiring the corporate seal, may be executed as aforementioned or in such other manner as may be directed by the Board of Directors.

        All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation, or in special accounts of the Corporation, shall be signed by such person or persons as the Board of Directors shall authorize so to do.

Section 2.    Voting of Securities Owned by Corporation.    All stock and other securities of other corporations owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors or, in the absence of such authorization, by the Chairman of the Board (if there be such an officer appointed), or by the Chief Executive Officer (if there be such an officer), or by the Chief Financial Officer (if there be such an officer) or the Chief Operating Officer (if there be such an officer).

ARTICLE VII—STOCK

Section 1.    Certificates of Stock.    Each shareholder shall be entitled to a certificate signed by, or in the name of the Corporation by, the Chairman or Vice Chairman of the Board of Directors (if there be such officers appointed) or the President or Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, certifying the number of shares owned by him or her. Any or all of the signatures on the certificate may be by facsimile.

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Section 2.    Transfers of Stock.    Transfers of stock shall be made only upon the transfer books of the Corporation kept at an office of the Corporation or by transfer agents designated to transfer shares of the stock of the Corporation. Except where a certificate is issued in accordance with Section 4 of Article VII of these Bylaws, an outstanding certificate for the number of shares involved shall be surrendered for cancellation before a new certificate is issued therefor. A record shall be made of each transfer and whenever a transfer shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer.

Section 3.    Record Date.    In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date on which the resolution fixing the record date is adopted and which record date shall not be more than 60 nor less than ten days before the date of any meeting of shareholders, nor more than 60 days prior to the time for such other action as hereinbefore described; provided, however, that if no record date is fixed by the Board of Directors, the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held, and, for any other purpose, the record date shall be at the close of business on the day on which the Board of Directors adopts a resolution relating thereto.

        A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 4.    Lost, Stolen or Destroyed Certificates.    In the event of the loss, theft or destruction of any certificate of stock, another may be issued in its place pursuant to such regulations as the Board of Directors may in their discretion establish concerning proof of such loss, theft or destruction and concerning the giving of a satisfactory bond or bonds of indemnity.

Section 5.    Regulations.    The issue, transfer, conversion and registration of certificates of stock shall be governed by such other regulations as the Board of Directors may establish.

Section 6.    Registered Shareholders.    The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner and to hold liable for calls and assessments a person registered on its books as the owner of shares and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

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Section 7.    Dividends.    Subject to the provisions of the Certificate of Incorporation, the Board of Directors may, out of funds legally available therefor at any regular or special meeting, declare dividends upon the capital stock of the Corporation as and when they deem expedient. Dividends may be paid in cash, in property, or in shares of the capital stock of the Corporation; and in the case of a dividend paid in shares of theretofore unissued capital stock of the Corporation, the Board of Directors shall, by resolution, direct that there be designated as capital in respect of such shares an amount not less than the aggregate par value of such shares and, in the case of shares without par value, such amount as shall be fixed by the Board of Directors. Before declaring any dividend, there may be set apart out of any funds of the Corporation available for dividends, such sum or sums as the Board of Directors from time to time in its discretion deems proper for working capital or as a reserve fund to meet contingencies or for such other purposes as the Board of Directors shall deem conducive to the interests of the Corporation.

ARTICLE VIII—NOTICES

Section 1.    Notices.    Except as otherwise specifically provided herein or required by law, all notices required to be given to any shareholder, director, officer, employee or agent shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, or by sending such notice by prepaid telegram or mailgram. Any such notice shall be addressed to such shareholder, director, officer, employee or agent at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received, if hand delivered_, or dispatched, if delivered through the malls or by telegram or mailgram shall be the time of the giving of the notice.

Section 2.    Waivers.    A written waiver of any notice, signed by a shareholder, director, officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such shareholder, director, officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver.

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ARTICLE IX—MISCELLANEOUS

Section 1.    Facsimile Signatures.    In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

Section 2.    Corporate Seal.    The Board of Directors may provide a suitable seal, containing the name of the Corporation, which seal shall be in the charge of the Secretary. If and when so directed by the Board of Directors or a committee thereof, duplicates of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.

Section 3.    Reliance upon Books, Reports and Records.    Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters that such director or committee member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 4.    Fiscal Year.    The fiscal year of the Corporation shall be as fixed by the Board of Directors.

Section 5.    Time Periods.    In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

Section 6.    Ratification by Stockholders.    Any contract, transaction or act of the Corporation or of the Board of Directors or of any committee of the Board of Directors which shall be ratified by the holders of a majority of the voting power of the outstanding shares of capital stock present in person or by proxy and voting at any annual meeting or at any special meeting called for such purpose, shall, insofar as permitted by law or under the provisions of the Certificate of Incorporation of the Corporation or these Bylaws, be as valid and binding as though ratified by every shareholder of the Corporation.

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Section 7.    Interested Directors.    No contract or transaction between the Corporation and one or more of its directors or officers or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction or solely because his or her or their votes are counted for such purpose if:

        (a)    the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though less than a quorum; or

        (b)    the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the shareholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the shareholders; or

        (c)    the contract or transaction is fair as to the Corporation as of the time it is authorized, approved, or ratified by the Board of Directors, a committee thereof, or the shareholders.

        Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee that authorizes the contract or transaction.

ARTICLE X—INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 1.    Right to Indemnification.    Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than said law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, liens, amounts paid or to be paid in settlement and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974) reasonably incurred or suffered by such person in connection therewith and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors.

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        The right to indemnification conferred in this Section shall be a contract right and shall include the right to be paid by the Corporation the expenses (including attorney's fees) incurred in defending any such proceeding in advance of its final disposition provided, however, that, if the DGCL requires, the payment of such expenses incurred by a director or officer in his or her capacity as such in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such director or officer is not entitled to be indemnified under this Section or otherwise (an "undertaking"); and provided, further, that such advancement of expenses incurred by any person other than a director or officer shall be made only upon the delivery of an undertaking to the foregoing effect and may be subject to such other conditions as the Board may deem advisable.

Section 2.    Right of Claimant to Bring Suit.    If a claim under Section 1 of this Article is not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such suit. It shall be a defense to any such suit (other than a suit brought to enforce a right to advancement of expenses where the required undertaking has been tendered to the Corporation) that the claimant has not met the applicable standard of conduct set forth in the DGCL, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or its shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, independent legal counsel or its shareholders) that the claimant has not met such standard, shall be a defense to the suit or create a presumption that the claimant has not met the applicable standard of conduct.

Section 3.    Non-Exclusivity of Rights; Accrued Rights.    The right to indemnification and advancement of expenses conferred in Section 1 of this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of shareholders or disinterested directors or otherwise. Such rights shall be contract rights, shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of such person's heirs, executors and administrators. Any repeal or modification of this Article shall not adversely affect any right hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.

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Section 4.    Insurance.    The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any such expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Section 5.    Other Employees and Agents.    The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee not within the provisions of Section 1 of this Article or to any agent of the Corporation, subject to such conditions as the Board may deem advisable.

Section 6.    Savings Clause.    If this Article X or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each person entitled to indemnification under Section 1 of this Article as to all expense, liability, and loss (including attorney's fees, judgments, fines, ERISA excise taxes, penalties and amounts to be paid in settlement) actually and reasonably incurred or suffered by such person and for which indemnification is available to such person pursuant to this Article X to the fullest extent permitted by any applicable portion of this Article X that shall not have been invalidated and to the fullest extent permitted by applicable law.

ARTICLE XI—AMENDMENTS

        The Board of Directors and shareholders may adopt, amend and repeal the Bylaws in the manner provided in the Certificate of Incorporation.

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QuickLinks

Exhibit 3.2

CHIPOTLE MEXICAN GRILL, INC. RESTATED BYLAWS (as of January 31, 2006) ARTICLE I—OFFICES
ARTICLE II—SHAREHOLDERS
ARTICLE III—BOARD OF DIRECTORS
ARTICLE IV—COMMITTEES
ARTICLE V—OFFICERS
ARTICLE VI—EXECUTION OF CORPORATE INSTRUMENTS, AND VOTING OF SECURITIES OWNED BY THE CORPORATION
ARTICLE VII—STOCK
ARTICLE VIII—NOTICES
ARTICLE IX—MISCELLANEOUS
ARTICLE X—INDEMNIFICATION OF DIRECTORS AND OFFICERS
ARTICLE XI—AMENDMENTS

EX-4.1

	CLASS A COMMON		CLASS A COMMON
	PAR VALUE $.01	[CHIPOTLE LOGO]	THIS CERTIFICATE IS TRANSFERABLE IN NEW YORK, NY OR CHICAGO, IL
Certificate Number [number]		CHIPOTLE MEXICAN GRILL, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE		Shares **[number]***** ***[number]**** ****[number]*** *****[number]** ******[number]*
	THIS CERTIFIES THAT
			CUSIP    169656 10 5
		[NAME]	SEE REVERSE FOR CERTAIN DEFINITIONS
	is the owner of	**[NUMBER]**	IMPORTANT—SEE REVERSE SIDE OF CERTIFICATE FOR RESTRICTIVE LEGEND
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE CLASS A COMMON STOCK OF
	Chipotle Mexican Grill, Inc. (hereinafter called the "Company"), transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.
	Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.

	DATED [Date]
/s/  Montgomery F. Moran    President and Chief Operating Officer	COUNTERSIGNED AND REGISTERED COMPUTERSHARE INVESTOR SERVICES, LLC (CHICAGO) TRANSFER AGENT AND REGISTRAR
/s/  Steve Ells    Chairman and Chief Executive Officer	By	[Name] AUTHORIZED SIGNATURE
			29085

	CLASS A COMMON		CLASS A COMMON
	PAR VALUE $.01	[CHIPOTLE LOGO]	THIS CERTIFICATE IS TRANSFERABLE IN NEW YORK, NY OR CHICAGO, IL
Certificate Number [number]		CHIPOTLE MEXICAN GRILL, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE		Shares **[number]***** ***[number]**** ****[number]*** *****[number]** ******[number]*
	THIS CERTIFIES THAT
			CUSIP    169656 10 5
		[NAME]	SEE REVERSE FOR CERTAIN DEFINITIONS
	is the owner of	**[NUMBER]**	IMPORTANT—SEE REVERSE SIDE OF CERTIFICATE FOR RESTRICTIVE LEGEND
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE CLASS A COMMON STOCK OF
	Chipotle Mexican Grill, Inc. (hereinafter called the "Company"), transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.
	Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.

	DATED [Date]
/s/  MONTGOMERY F. MORON    President and Chief Operating Officer	COUNTERSIGNED AND REGISTERED COMPUTERSHARE INVESTOR SERVICES, LLC (CHICAGO) TRANSFER AGENT AND REGISTRAR
/s/  STEVE ELLS    Chairman and Chief Executive Officer	By	/s/  [NAME] AUTHORIZED SIGNATURE
			29086

CHIPOTLE MEXICAN GRILL, INC.

The following abbreviations, when used in inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
	TEN COM	- -	as tenants in common	UNIF GIFT IN ACT-	(Cust)	Custodian	(Minor)
	TEN ENT	-	as tenants by the entireties	under Uniform Gifts to Minors Act			(State)
	JT TEN	-	as joint tenants with right of survivorship and not as tenants in common	UNIF TRF MIN ACT	(Cust)	Custodian (until age     )	(Minor)
				under Uniform Transfers to Minors Act			(State)
		Additional abbreviations may also be used though not in the above list.

THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE ARTICLES OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OF DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE.

		PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
For value received,	hereby sell assign and transfer unto
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

	Shares
of the Class A common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
	Attorney
to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

Dated:			20	Signature(s) Guaranteed: Medallion Guarantee Stamp
				THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15
Signature:
Signature:
	Notice:	The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever.
Class A legend

	CLASS B COMMON		CLASS B COMMON
	PAR VALUE $.01	[CHIPOTLE LOGO]	THIS CERTIFICATE IS TRANSFERABLE IN NEW YORK, NY OR CHICAGO, IL
Certificate Number [Number]		CHIPOTLE MEXICAN GRILL, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE		Shares **[Number]***** ***[Number]**** ****[Number]*** *****[Number]** ******[Number]*
	THIS CERTIFIES THAT
		[Name]	SEE REVERSE FOR CERTAIN DEFINITIONS
	is the owner of	**[NUMBER]**	IMPORTANT—SEE REVERSE SIDE OF CERTIFICATE FOR RESTRICTIVE LEGEND
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE CLASS B COMMON STOCK OF
	Chipotle Mexican Grill, Inc. (hereinafter called the "Company"), transferable on the books of the Company in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. This Certificate and the shares represented hereby, are issued and shall be held subject to all of the provisions of the Articles of Incorporation, as amended, and the By-Laws, as amended, of the Company (copies of which are on file with the Company and with the Transfer Agent), to all of which each holder, by acceptance hereof, assents. This Certificate is not valid unless countersigned and registered by the Transfer Agent and Registrar.
	Witness the facsimile seal of the Company and the facsimile signatures of its duly authorized officers.

	DATED [Date]
/s/  Montgomery F. Moran    President and Chief Operating Officer	COUNTERSIGNED AND REGISTERED COMPUTERSHARE INVESTOR SERVICES, LLC (CHICAGO) TRANSFER AGENT AND REGISTRAR
/s/  Steve Ells    Chairman and Chief Executive Officer	By	[Name] AUTHORIZED SIGNATURE
			29087

CHIPOTLE MEXICAN GRILL, INC.

NOTICE IS HEREBY GIVEN THAT THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR NON-U.S. JURISDICTION. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN EFFECTIVE REGISTRATION STATEMENT (OR AMENDMENT THERETO) UNDER THE ACT AND ANY OTHER APPLICABLE LAWS OR (II) AN OPINION OF COUNSEL FOR CHIPOTLE MEXICAN GRILL, INC. OR, IF ACCEPTABLE TO CHIPOTLE MEXICAN GRILL, INC., THE HOLDER THEREOF THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

THE SHARES OF CLASS B COMMON STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED TO ANY PERSON IN CONNECTION WITH A TRANSFER THAT DOES NOT MEET THE QUALIFICATIONS SET FORTH IN ARTICLE IV(2)(G)(VII) OF THE CERTIFICATE OF INCORPORATION OF CHIPOTLE MEXICAN GRILL, INC., AND NO PERSON WHO RECEIVES SUCH SHARES IN CONNECTION WITH A TRANSFER THAT DOES NOT MEET THE QUALIFICATIONS PRESCRIBED IN SUCH ARTICLE IS ENTITLED TO OWN OR TO BE REGISTERED AS THE RECORD HOLDER OF SUCH SHARES OF CLASS B COMMON STOCK, BUT THE RECORD HOLDER OF THIS CERTIFICATE MAY AT SUCH TIME AND IN THE MANNER SET FORTH IN ARTICLE IV(2)(G) OF THE CERTIFICATE OF INCORPORATION OF THE CORPORATION CONVERT SUCH SHARES OF CLASS B COMMON STOCK INTO THE SAME NUMBER OF SHARES OF CLASS A COMMON STOCK FOR PURPOSES OF EFFECTING THE SALE OR OTHER DISPOSITON OF SUCH SHARES OF CLASS A COMMON STOCK TO ANY PERSON. EACH HOLDER OF THIS CERTIFICATE, BY ACCEPTING THE SAME, ACCEPTS AND AGREES TO ALL OF THE FOREGOING.

The following abbreviations, when used in inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws of regulations:
	TEN COM	- -	as tenants in common	UNIF GIFT IN ACT-	(Cust)	Custodian	(Minor)
	TEN ENT	-	as tenants by the entireties	under Uniform Gifts to Minors Act			(State)
	JT TEN	-	as joint tenants with right of survivorship and not as tenants in common	UNIF TRF MIN ACT	(Cust)	Custodian (until age     )	(Minor)
				under Uniform Transfers to Minors Act			(State)
		Additional abbreviations may also be used though not in the above list.

THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE ARTICLES OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FURTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT

AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE.

		PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
For value received,	hereby sell assign and transfer unto
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

	Shares
of the Class A common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
	Attorney
to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.

Dated:			20	Signature(s) Guaranteed: Medallion Guarantee Stamp
				THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15
Signature:
Signature:
	Notice:	The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever.
Class B legend

EX-10.5

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Exhibit 10.5

SERVICES AGREEMENT

THIS SERVICES AGREEMENT (this "Agreement") is entered into as of January 31, 2006 by and between Chipotle Mexican Grill, Inc., a Delaware corporation ("Chipotle"), and McDonald's Corporation, a Delaware corporation ("McDonald's").

RECITALS

WHEREAS, Chipotle will be issuing shares of Class A Common Stock, $0.01 par value per share ("Class A Common Stock"), to the public in an offering registered under the Securities Act of 1933, as amended (the "Initial Public Offering");

WHEREAS, upon consummation of the Initial Public Offering, McDonald's will own, indirectly through its wholly-owned subsidiary McDonald's Ventures, LLC, at least 65% of the outstanding shares of Common Stock (as defined below), which ownership will provide McDonald's with, in most circumstances, at least 87% of the combined voting power of the outstanding Common Stock;

WHEREAS, McDonald's has heretofore directly or indirectly provided certain services to Chipotle, including (a) accounting and financial transaction processing and reporting services, as described in more detail on Schedule I attached to this Agreement (the "Accounting Services"), (b) making certain insurance coverage programs available to Chipotle, as described in more detail on Schedule II attached to this Agreement (the "Insurance Services"), and (c) making certain McDonald's employee benefit plans available to employees of Chipotle, as described in more detail on Schedule III attached to this Agreement (the "Benefits Services", and together with the Accounting Services and the Insurance Services, collectively, the "Services");

WHEREAS, on the terms and subject to the conditions set forth herein, Chipotle desires to retain McDonald's as an independent contractor to provide, directly or indirectly, the Services to Chipotle after the Closing Date (as defined below); and

WHEREAS, on the terms and subject to the conditions set forth herein, McDonald's desires to provide, directly or indirectly, such Services to Chipotle.

AGREEMENTS

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged by this Agreement, McDonald's and Chipotle, for themselves, their successors and assigns, agree as follows:

ARTICLE I

DEFINITIONS

        As used in this Agreement, the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described:

        "Accounting Services" has the meaning ascribed thereto in the recitals to this Agreement.

        "Action" has the meaning ascribed thereto in Section 5.02.

        "Agreement" has the meaning ascribed thereto in the preamble to this Agreement, as such agreement may be amended and supplemented from time to time in accordance with its terms.

        "Benefits Services" has the meaning ascribed thereto in the recitals to this Agreement.

        "Chipotle" has the meaning ascribed thereto in the preamble to this Agreement.

        "Chipotle Indemnified Person" has the meaning ascribed thereto in Section 5.03.

        "Class A Common Stock" has the meaning ascribed thereto in the recitals to this Agreement.

        "Closing Date" means the date of the closing of the initial sale of Class A Common Stock in the Initial Public Offering.

        "Common Stock" means the Class A Common Stock, the Class B Common Stock, $0.01 par value per share, of Chipotle, and any other class of Chipotle capital stock representing the right to vote for the election of directors.

        "Confidential Information" has the meaning ascribed thereto in Section 7.07.

        "Initial Public Offering" has the meaning ascribed thereto in the recitals to this Agreement.

        "Insurance Services" has the meaning ascribed thereto in the recitals to this Agreement.

        "McDonald's" has the meaning ascribed thereto in the preamble to this Agreement.

        "McDonald's Indemnified Person" has the meaning ascribed thereto in Section 5.01.

        "McDonald's Plans" means those certain employee benefit plans of McDonald's that are being made available to certain employees of Chipotle as part of the Benefits Services, all as described in more detail on Schedule III.

        "Ownership Reduction Date" means the date on which McDonald's ceases to own, directly or indirectly, shares of Common Stock representing more than eighty percent (80%) of the combined voting power of the outstanding Common Stock.

        "Parties" means both Chipotle and McDonald's, and "Party" means one of them as the context indicates.

        "Payment Date" has the meaning ascribed thereto in Section 3.02.

        "Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization, government (and any department or agency thereof) or other entity.

        "Schedule I" means the first schedule attached to this Agreement which lists the Accounting Services to be provided by McDonald's to Chipotle and sets forth the related billing methodology and term.

        "Schedule II" means the second schedule attached to this Agreement which lists the Insurance Services to be provided by McDonald's to Chipotle and sets forth the related billing methodology and term.

        "Schedule III" means the third schedule attached to this Agreement which lists the Benefits Services to be provided by McDonald's to Chipotle and sets forth the related billing methodology and term.

2

        "Schedules" has the meaning ascribed thereto in Section 3.01.

        "Service Costs" has the meaning ascribed thereto in Section 3.01.

        "Services" has the meaning ascribed thereto in the recitals to this Agreement.

        "Subsidiary" means, with respect to any Person, any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting capital stock or other voting ownership interests is owned or controlled directly or indirectly by such Person or by one or more of the Subsidiaries of such Person or by a combination thereof.

ARTICLE II

PURCHASE AND SALE OF SERVICES; NO WARRANTY

        Section 2.01.    Purchase and Sale of Services.

        (a)    Subject to the terms and conditions of this Agreement and in consideration of the Service Costs described below, McDonald's agrees to provide to Chipotle, or procure the provision to Chipotle of, and Chipotle agrees to purchase from McDonald's, the Services. Unless otherwise specifically agreed by McDonald's and Chipotle, the Services to be provided or procured by McDonald's hereunder shall be substantially similar in scope, quality, and nature to those provided to, or procured on behalf of, Chipotle prior to the Closing Date.

        (b)    The Parties understand that (i) the Services McDonald's shall provide to Chipotle under this Agreement will, at Chipotle's request, be provided to Subsidiaries of Chipotle and (ii) McDonald's may satisfy its obligation to provide or procure Services hereunder by causing one or more of its Subsidiaries to provide or procure such Services. With respect to Services provided to, or procured on behalf of, any Subsidiary of Chipotle, Chipotle agrees to pay on behalf of such Subsidiary all amounts payable by or in respect of such Services.

        Section 2.02.    Additional Services.    In addition to the Services to be provided or procured by McDonald's pursuant to Section 2.01, to the extent that McDonald's and Chipotle mutually agree in their respective sole discretion, McDonald's may provide additional services (including services not provided by McDonald's to Chipotle prior to the Closing Date) to Chipotle. The scope of any such services, as well as the term, costs, and other terms and conditions applicable to such services, shall be as mutually agreed by McDonald's and Chipotle in their respective sole discretion.

        Section 2.03    NO WARRANTY.    Chipotle acknowledges that (a) McDonald's does not regularly provide the Services, or any related services, to third parties as part of its business and (b) that McDonald's does not warrant or assume responsibility for its provision of the Services. THERE ARE NO WARRANTIES RELATING TO THE SERVICES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE III

SERVICE COSTS; OTHER CHARGES

        Section 3.01.    Service Costs Generally.    Schedule I, Schedule II, and Schedule III attached to this Agreement (as may be amended from time to time by mutual agreement of the Parties in writing, collectively, the "Schedules") indicate, with respect to each Service listed therein, the method of calculating the amount Chipotle shall pay to McDonald's for such Services (collectively, the "Service Costs"). Chipotle agrees to pay to McDonald's the Service Costs applicable to each of the Services in the manner set forth in Section 3.02.

3

        Section 3.02.    Invoicing and Settlement of Costs.

        (a)    Unless alternative arrangements for a particular Service are set forth on the applicable Schedule, McDonald's will invoice or otherwise notify Chipotle of the Service Costs on a monthly basis, either directly or through McDonald's intracompany billing system, in a manner substantially consistent with the billing practices used in connection with services provided to Chipotle prior to the Closing Date. In connection with the invoicing described in this Section 3.02(a), McDonald's will provide to Chipotle the same billing data and level of detail as it customarily provided to Chipotle prior to the Closing Date.

        (b)    Chipotle agrees to pay, without setoff, all of the Service Costs on or before ten (10) business days after the date on which McDonald's invoices or otherwise notifies Chipotle of the Service Costs (each invoice date or notification date, a "Payment Date"). At McDonald's option, and upon reasonable notice to Chipotle, Chipotle shall make such payments through McDonald's intracompany billing system, cash management systems, or by wire transfer of immediately available funds payable to the order of McDonald's. If Chipotle fails to pay any monthly payment within ten (10) business days of the relevant Payment Date, Chipotle shall be obligated to pay, in addition to the amount due on such Payment Date, interest on such amount at the prime rate announced by JP Morgan Chase (as of the applicable Payment Date) plus two percent (2%) per annum, compounded monthly from the relevant Payment Date through the date of payment.

        Notwithstanding the foregoing, if Chipotle has reasonable basis to believe an invoice is incorrect, Chipotle shall notify McDonald's of the basis for its belief and the Parties shall reasonably cooperate to resolve such matter. Provided Chipotle has timely paid all amounts not in dispute, in such event, interest shall not accrue on any amount in dispute and no default shall be alleged until the earlier of (x) thirty (30) days from the Payment Date and (y) three (3) business days following resolution of such matter.

ARTICLE IV

CHIPOTLE DELEGATION; TRADEMARKS AND SERVICE MARKS

        Section 4.01.    Delegation.    Chipotle delegates to McDonald's final, binding, and exclusive authority, responsibility, and discretion to interpret and construe the provisions of McDonald's Plans. McDonald's may further delegate such authority to third-party plan administrators.

        Section 4.02.    Trademarks and Service Marks.    Chipotle agrees to permit McDonald's and its Subsidiaries to use the trademarks and service marks owned by Chipotle or any of its Subsidiaries at no cost to McDonald's or its Subsidiaries for use in McDonald's annual report to shareholders, documentation relating to any of the Services, and for any other similar purposes, so long as Chipotle reviews and consents to such particular uses, said consent not to be unreasonably withheld, delayed or conditioned.

4

ARTICLE V

LIMITATION OF LIABILITY; INDEMNIFICATION

        Section 5.01.    Limitation of Liability.

        (a)    Chipotle agrees that none of McDonald's and its Subsidiaries and their respective directors, officers, agents, and employees (each, a "McDonald's Indemnified Person") shall have any liability, whether direct or indirect, in contract or tort or otherwise, to Chipotle or any of its Subsidiaries for or in connection with the Services rendered or to be rendered by any McDonald's Indemnified Person pursuant to this Agreement or any other services rendered by any McDonald's Indemnified Person, the transactions contemplated by this Agreement, or any McDonald's Indemnified Person's actions or inactions in connection with any such Services, any such other services, or any such transactions, except for damages which have resulted from such McDonald's Indemnified Person's willful misconduct in connection with any such Services, other services, transactions, actions or inactions.

        (b)    NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR AT LAW OR IN EQUITY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ITS SUBSIDIARIES FOR PUNITIVE, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, LOSS OF DATA, LOSS OF USE, BUSINESS INTERRUPTION OR ANY OTHER LOSS) HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY, ARISING FROM OR RELATING TO ANY CLAIM MADE UNDER THIS AGREEMENT OR REGARDING THE PROVISION OF OR THE FAILURE TO PROVIDE THE SERVICES OR ANY OTHER SERVICES. THE FOREGOING LIMITATION WILL NOT LIMIT EITHER PARTY'S OBLIGATIONS WITH RESPECT TO PAYMENT OF DAMAGES OF ANY KIND INCLUDED IN AN AWARD OR SETTLEMENT OF A THIRD PARTY CLAIM UNDER ANY INDEMNITY PROVISIONS SPECIFIED HEREIN. McDONALD'S SHALL HAVE NO LIABILITY OF ANY KIND OR NATURE WHATSOEVER FOR CEASING TO PROVIDE ANY OF THE SERVICES UPON TERMINATION PURSUANT TO THIS AGREEMENT.

        Section 5.02.    Indemnification of McDonald's by Chipotle.    Chipotle agrees to indemnify and hold harmless each McDonald's Indemnified Person from and against any damages, and to reimburse each McDonald's Indemnified Person for all reasonable expenses as they are incurred in investigating, preparing, pursuing, or defending any claim, action, proceeding, or investigation, whether or not in connection with pending or threatened litigation (each an "Action") and whether or not any McDonald's Indemnified Person is a party, arising out of or in connection with Services rendered or to be rendered by any McDonald's Indemnified Person pursuant to this Agreement or any other services rendered by any McDonald's Indemnified Person, the transactions contemplated by this Agreement, or any McDonald's Indemnified Person's actions or inactions in connection with any such Services, any such other services, or any such transactions; provided that no Chipotle Indemnified Person will be responsible for any damages of any McDonald's Indemnified Person that have resulted from such McDonald's Indemnified Person's willful misconduct in connection with any such Services, other services, transactions, actions, or inactions.

        Section 5.03.    Indemnification of Chipotle by McDonald's.    McDonald's agrees to indemnify and hold harmless Chipotle and its Subsidiaries and their respective directors, officers, agents, and employees (each, a "Chipotle Indemnified Person") from and against any damages, and will reimburse each Chipotle Indemnified Person for all reasonable expenses as they are incurred in investigating, preparing, pursuing or defending any Action, arising out of the willful misconduct of any McDonald's Indemnified Person in connection with the Services rendered or to be rendered pursuant to this Agreement.

5

        Section 5.04.    Further Indemnification.    To the extent that any other Person has agreed to indemnify any McDonald's Indemnified Person or to hold a McDonald's Indemnified Person harmless and such Person provides services to McDonald's or any affiliate of McDonald's relating directly or indirectly to any McDonald's Plan included in the Benefits Services, McDonald's will exercise reasonable efforts to make such agreement applicable to any Chipotle Indemnified Person so that each Chipotle Indemnified Person is held harmless or indemnified to the same extent as any McDonald's Indemnified Person.

ARTICLE VI

TERM AND TERMINATION

        Section 6.01.    Term; Expiration.    This Agreement shall expire on the date of termination of the last to terminate of the Services, according to their respective terms set forth on the Schedules.

        Section 6.02.    Termination Prior to Expiration.

        (a)    McDonald's may terminate any affected Service at any time if (i) Chipotle shall have failed to perform any of its material obligations under this Agreement relating to any such Service, (ii) McDonald's has notified Chipotle in writing of such failure, and (iii) such failure shall have continued for a period of thirty (30) days after Chipotle's receipt of notice of such failure.

        (b)    Chipotle may terminate any affected Service at any time if (i) McDonald's shall have failed to perform any of its material obligations under this Agreement relating to any such Service, (ii) Chipotle has notified McDonald's in writing of such failure, and (iii) such failure shall have continued for a period of thirty (30) days after McDonald's' receipt of notice of such failure.

        (c)    McDonald's may terminate any affected Service effective immediately upon written notice to Chipotle if the performance of such Service would require McDonald's to violate any applicable laws, rules or regulations or would result in the breach of any applicable contract.

        Section 6.03.    Effect of Termination.

        (a)    Other than as required by law, upon termination or expiration of any Service pursuant to Section 6.01 or Section 6.02, McDonald's will have no further obligation to provide the terminated or expired Service (or any Service, in the case of termination of this Agreement) and Chipotle will have no obligation to pay any fees relating to such Services; provided, however, that notwithstanding such termination or expiration, (i) Chipotle shall remain liable to McDonald's for fees owed and payable in respect of Services provided prior to the effective date of the termination or expiration; (ii) with respect to Benefits Services, McDonald's shall continue to charge Chipotle for administrative and program costs relating to McDonald's Plans if such costs are paid after but incurred prior to the termination or expiration of any Benefits Service, and Chipotle shall be obligated to pay such expenses in accordance with the terms of this Agreement; and (iii) the provisions of Articles IV, V, VI and VII shall survive any such termination or expiration.

        (b)    Following termination or expiration of this Agreement with respect to any Service, McDonald's and Chipotle agree to cooperate, at Chipotle's expense, in providing for an orderly transition of such Service to Chipotle or to a successor service provider.

6

ARTICLE VII

MISCELLANEOUS

        Section 7.01.    Prior Agreements.    In the event there is any conflict between the provisions of this Agreement and provisions of prior written or oral agreements between McDonald's or its Subsidiaries and Chipotle or its Subsidiaries, the provisions of this Agreement shall govern and such provisions in the prior agreements are deemed to be amended so as to conform with this Agreement.

        Section 7.02.    Future Litigation and Other Proceedings.    In the event that Chipotle (or any of its officers or directors) or McDonald's (or any of its officers or directors) at any time after the date hereof initiates or becomes subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), the Party (and its officers and directors) that has not initiated and is not subject to such litigation or other proceedings shall comply, at the other Party's expense, with any reasonable requests by the other Party for assistance in connection with such litigation or other proceedings (including by way of provision of information and making available of employees as witnesses). In the event that Chipotle (or any of its officers or directors) and McDonald's (or any of its officers or directors) at any time after the date hereof initiate or become subject to any litigation or other proceedings before any governmental authority or arbitration panel with respect to which the Parties have no prior agreements (as to indemnification or otherwise), each Party (and its officers and directors) shall, at its own expense, coordinate its strategies and actions with respect to such litigation or other proceedings to the extent such coordination would not be detrimental to its interests and shall comply, at the expense of the requesting Party, with any reasonable requests of the other Party for assistance in connection therewith (including by way of provision of information and making available of employees as witnesses).

        Section 7.03.    No Agency.    Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the Parties or, except to the extent provided in Section 4.01, constitute or be deemed to constitute any Party as the agent or employee of the other Party for any purpose whatsoever and neither Party shall have authority or power to bind the other or to contract in the name of, or create a liability against, the other in any way or for any purpose.

        Section 7.04.    Subcontractors. McDonald's may hire or engage one or more subcontractors to perform all or any of its obligations under this Agreement, provided that, subject to Section 5.01, McDonald's will in all cases remain primarily responsible for all obligations undertaken by it in this Agreement with respect to the scope, quality and nature of the Services provided to Chipotle.

        Section 7.05.    Force Majeure.

        (a)    For purposes of this Section, "force majeure" means an event beyond the control of either Party, which by its nature could not have been foreseen by such Party, or, if it could have been foreseen, was unavoidable, and includes without limitation, acts of God, storms, floods, riots, fires, terrorism, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared), telecommunications failure and failure of energy sources.

        (b)    Neither Party shall be under any liability for failure to fulfill any obligation under this Agreement, so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered, or delayed as a consequence of circumstances of force majeure, provided always that such Party shall have exercised all due diligence to minimize to the greatest extent possible the effect of force majeure on its obligations hereunder.

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        (c)    Promptly on becoming aware of force majeure causing a delay in performance or preventing performance of any obligations imposed by this Agreement (and termination of such delay), the Party affected shall give written notice to the other Party giving details of the same, including particulars of the actual and, if applicable, estimated continuing effects of such force majeure on the obligations of the Party whose performance is prevented or delayed. If such notice shall have been duly given, and actual delay resulting from such force majeure shall be deemed not to be a breach of this Agreement, and the period for performance of the obligation to which it relates shall be extended accordingly, provided that if force majeure results in the performance of a Party being delayed by more than sixty (60) days, the other Party shall have the right to terminate this Agreement with respect to any Service effected by such delay by written notice.

        Section 7.06.    Entire Agreement.    This Agreement (including the Schedules) and any other writing signed by the Parties that specifically references this Agreement constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the Parties with respect to the subject matter hereof. This Agreement is not intended to confer upon any Person other than the Parties to this Agreement any rights or remedies hereunder.

        Section 7.07.    Confidential Information.    Chipotle and McDonald's covenant and agree to hold in trust and maintain confidential all Confidential Information relating to the other Party. "Confidential Information" shall mean all information disclosed by either Party to the other in connection with this Agreement whether orally, visually, in writing or in any other tangible form, and includes, but is not limited to, economic and business data, business plans, and the like, but shall not include (a) information which becomes generally available other than by release in violation of the provisions of this Section 7.07, (b) information which becomes available on a nonconfidential basis to a Party from a source other than the other Party provided the Party in question reasonably believes that such source is not or was not bound to hold such information confidential, (c) information acquired or developed independently by a Party without violating this Section 7.07 or any other confidentiality agreement with the other Party and (d) information that any Party reasonably believes it is required to disclose by law, provided that it first notifies the other Party of such requirement and allows such Party a reasonable opportunity to seek a protective order or other appropriate remedy to prevent such disclosure. Without prejudice to the rights and remedies of either Party, a Party disclosing any Confidential Information to the other Party in accordance with the provisions of this Agreement shall be entitled to equitable relief by way of an injunction if the other Party breaches or threatens to breach any provision of this Section 7.07. Notwithstanding anything to the contrary set forth in this Agreement, McDonald's may disclose any Confidential Information that McDonald's reasonably believes is necessary or appropriate to be disclosed in the course of performing the Services, provided, however, McDonald's shall instruct all such Persons to whom it discloses any Confidential Information to hold in trust and maintain confidential all such Confidential Information.

        Section 7.08.    Notices.    Any notice, instruction, direction or demand under the terms of this Agreement will be duly given upon delivery, if delivered by hand, facsimile transmission, or mail, to the following addresses:

(a)

If to Chipotle, to:

Chipotle Mexican Grill, Inc.
1543 Wazee Street, Suite 200
Denver, CO 80202
Attn: General Counsel
Fax: 303-390-5638

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with a copy to:

Bryant S. Messner, Esq.
Messner & Reeves, LLC
1430 Wynkoop Street, Suite 400
Denver, CO 80202

(b)

If to McDonald's, to:

McDonald's Corporation
2915 Jorie Blvd.
Oak Brook, IL 60523
Attn: General Counsel
Fax: 630-623-3512

or to such other addresses or telecopy numbers as may be specified by like notice to the other Party.

        Section 7.9.    Governing Law.    This Agreement shall be construed in accordance with and governed by the substantive internal laws of the State of Illinois.

        Section 7.10.    Severability.    If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall not render the entire Agreement invalid. Rather, the Agreement shall be construed as if not containing the particular invalid or unenforceable provision, and the rights and obligations of each Party shall be construed and enforced accordingly.

        Section 7.11.    Amendment.    This Agreement may only be amended by a written agreement executed by both Parties.

        Section 7.12.    Counterparts.    This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their duly authorized representatives.

CHIPOTLE MEXICAN GRILL, INC.
By:	/s/  STEVE ELLS
Name:	Steve Ells
Title:	Chairman and CEO
MCDONALD'S CORPORATION
By:	/s/  MARY HEALY
Name:	Mary Healy
Title:	Vice President Corporate Finance

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Services Agreement—Schedule I
Accounting Services

Services:

Chart A below details the Accounting Services and related service levels (subject to Chipotle system obligations, as discussed below). The Accounting Services are anticipated to be provided by the McDonald's personnel located at the McDonald's accounting center in Columbus, Ohio.

        Chipotle shall remain responsible for all accounting policy decisions. McDonald's will be responsible for incorporating accounting policies into the functions performed for Chipotle. McDonald's will provide input on proposed accounting policy changes. McDonald's will escalate to appropriate Chipotle management any exceptions to accounting policies.

        Notwithstanding anything to the contrary in the Agreement or this Schedule I, all losses, costs and expenses relating to any accounting or processing errors in the delivery of the Accounting Services by McDonald's shall be borne by Chipotle.

Billing Methodology:

        McDonald's will charge Chipotle a "fully-loaded all-in" charge for delivery of the Accounting Services. This "fully-loaded all-in" charge is intended to reimburse McDonald's for all costs incurred by McDonald's in the delivery of the Accounting Services, including, without limitation, related McDonald's employee costs (salary and benefits), office and occupancy costs, travel costs, computer and related technology equipment costs, and non-cash charges (such as depreciation). This "fully-loaded all-in" charge is not intended to provide a profit to McDonald's. In the event that McDonald's ceases to own, directly or indirectly, shares of Common Stock representing more than fifty percent (50%) of the combined voting power of the outstanding Common Stock (and Chipotle continues to receive the Accounting Services from McDonald's under the terms of this Agreement), the amount that would otherwise be charged by McDonald's to Chipotle for delivery of the Accounting Services shall be increased by ten percent (10%), which amount is intended to provide a profit margin to McDonald's for the delivery of the Accounting Services.

        For calendar year 2006, the charge for Accounting Services shall be billed to Chipotle on a per store basis at a charge of $4920.00 per year (or $410 per month) per store (the "Per Store Fee"). For each calendar year after 2006, the Per Store Fee shall be calculated by dividing the projected "fully-loaded all-in" costs of delivering the Accounting Services for such calendar year (the "Projected Costs") by the projected average number of Chipotle stores for such calendar year (the "Projected Stores"), which amount can be divided again by twelve (12) to obtain the per month per store amount. In consultation with Chipotle, McDonald's shall calculate the Projected Costs and Projected Stores in good faith exercising McDonald's' reasonable judgment. McDonald's and Chipotle agree to cooperate in business and efficiency initiatives to improve service and reduce costs.

Term; Termination of Accounting Services:

        Unless terminated earlier pursuant to Section 6.02 of the Agreement or as set forth below, the Accounting Services shall have an initial term expiring on December 31, 2007, and will be renewed automatically thereafter for successive two (2) year terms unless either Chipotle or McDonald's elects not to renew the Accounting Services upon not less than fifteen (15) months' written notice prior to any such renewal.

        Notwithstanding anything to the contrary set forth herein, either Party may terminate the Accounting Services at any time on fifteen (15) months' prior written notice to the other Party.

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Other Terms and Conditions Relating to Accounting Services

Accounting Data and Documents	* All accounting transactional data is owned by Chipotle. * All paper accounting documents are owned by Chipotle. McDonald's will produce any stored documents upon request within 30 days. * Chipotle agrees to respond to System issues that impact McDonald's service levels with 24 hours.	McDonald's processes on the Chipotle ERP System (Oracle), connecting remotely. The System is administrated by Chipotle. Chipotle employs a 3rd party for hosting, and is responsible in entirety for managing the relationship. All accounting transactional data is maintained by Chipotle. Certain paper accounting documents are filed in Columbus or moved to off-site storage in Columbus (McDonald's maintains storage log).
Rights to any Shared Tools / Technology: *Electronic Invoicing *Workflow *Accounting Tools	Electronic Invoicing / Workflow *Upon termination of delivery of the Accounting Services by McDonald's, Chipotle will be permitted to copy Sterling configuration information if they choose to buy Sterling software. Accounting Tools * Upon termination of delivery of the Accounting Services by McDonald's, Chipotle will be permitted to copy these specific tools. * Future accounting tool development by McDonald's will be fee basis (fully loaded cost) and subject to the same agreements as the existing tools.	Electronic Invoicing (EDI)—One translation software (Sterling GIS) and architecture (hardware and hosting) are used for McOpCo, Chipotle, and CanOpCo restaurant accounts payable invoices. All entities bear in the related total cost of ownership in relation to usage. Two times daily, transactional data is sent from the translator to Chipotle's ERP System (Oracle A/P data tables), which is owned by and controlled by Chipotle. Additionally, a Tools Warehouse is owned by McDonald's. Oracle tables are copied to this Warehouse so that business rules can be applied to the EDI data for screening prior to acceptance (i.e. valid stores, duplicates, delivery date valid). Workflow (in development)—Sterling GIS is tool used also for invoice workflow. Front end a/p entry will be via this tool. On a daily basis, transactional data is sent from the translator to Chipotle ERP Sytstem (Oracle A/P data tables), which is owned by and controlled by Chipotle. Additionally, a Tools Warehouse is owned by McDonald's. Oracle tables are copied to this Warehouse so that business rules can be applied to the workflow data. Accounting Tools—The following accounting tools contained in Chart B have been developed by McDonald's. These tools enable a large reduction in accounting labor associated with certain accounting processes. The tools are excel based and are housed in the Tools Warehouse. Oracle tables are copied to this Warehouse so that business rules can be applied to flag exceptions for research and resolution.
System Response Obligations	Chipotle agrees to respond to System issues that impact McDonald's service levels as follows: * Production down problems—acknowledge receipt of issue within 1 business hour (close), 4 business hours (other). Continuous work to resolve. * Non production down problems—acknowledge receipt of issue within 1 business day. Weekly status update. McDonald's agrees to the same criterion as above for Electronic Invoicing, Workflow, and Accounting Tools.	McDonald's processes on the Chipotle ERP System (Oracle), connecting remotely. The System is administrated by Chipotle.
Support of Chipotle Business Initiatives	* Projects will be prioritized jointly. * Projects will be absorbed to the extent of the 1 full time equivalent. * Additional work requested by Chipotle beyond this will be on a fee basis.	Certain Chipotle business initiatives impact the McDonald's or require the support of McDonald's (i.e. implementation of new inventory system—led by Chipotle, workflow—led by McDonald's). One full time equivalent is currently allocated for these changes.

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Chart A: Services Performed / Service Level

Area	Detailed Services	Service Level
Accounts Payable Processing	•    New vendor set up •    Vendor maintenance •    Store invoice payments •    Corporate invoices payments •    Expense report payments •    Car allowance payments •    1099's from AP subsystem •    EDI processing •    Stop payment processing •    Voids •    Check printing/ordering check stock/envelopes •    Check mailing •    Purchase Card Administrator Role (ordering/canceling cards/issuing monthly       statements to cardholders) •    Retrieving purchase card data and posting to GL •    Pcard recodes for received and approved charges •    Pcard receipt tracking •    Daily cash funding (check accounts and request necessary funding from Mcd) •    Reconciling AP system to GL system •    Lease card and fuel card invoice receipt, review and payments	Invoices processed within an average of 2.5 days or less of receipt
Fixed Asset Processing	•    Store invoice payments •    Corporate invoice payments •    Construction invoice payments •    Transfers and retirements •    Reconciling FA system to GL system •    Utilizing Oracle Projects for new store construction. Includes entering misc       adds (i.e. cost not entered by PO but necessary for reporting) and       reconciling Projects to FA •    Utilizing Oracle Projects for reinvestment invoices (includes communication       back to facilities if expense is not capitalizeable) •    Reviewing invoices to ensure they meet the Chipotle capitalization       requirements	Invoices processed within an average of 2.5 days or less of receipt
General Ledger	•    Trial balance review & analysis—store level •    Sales review •    Book recurring expenses •    Close and distribute store P&Ls •    Store, Master and Corporate account bank reconciliations •    Book and report manager bonus accounts (reporting completed quarterly) •    Process defined G&A recurring entries •    Establishing new accounts in Oracle •    E&Y audit—around McDonald's areas •    Oracle GL hierarchy maintenance/creation. •    New store set up in Oracle •    Booking monthly insurance charges for all lease car drivers •    Payroll 3rd party reconciliation	Close P&L by workday 5 Bank Reconciliations completed monthly
Accounts Receivable	•    House accounts—billings, collection and reconciliations •    Subtenant receivables—billings, collection and reconciliations •    Misc accounts receivable as it relates to stores—following up on a monthly       basis and reporting to Wazee for write off guidance when needed	Accounts receivable aging sent to Controller monthly
Cash Receipts	•    Check receipts deposit and journal entry processing •    Daily deposit verification (cash and cashless)	99% of Deposits (both cash and credit cards excluding AMEX and armored car) verified within 4 business days (excludes bank holidays). 99% of Deposits for AMEX and armored car verified within 6 business days (excludes bank holidays).

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Lease	•    Lease payments •    Sales reporting to landlords •    Percentage rent tracking/accruals/payments •    Desk audit triple net reconciliation review	All lease defaults cured within cure date 99% of monthly recurring payments received by landlords by lease due date
Sales, Use, Personal Property and Rent Taxes	•    Processing personal property tax payments •    Filing sales and use tax returns •    Researching tax rates for new stores on Checkpoint and communicating       information to Chipotle IT •    Processing sales and use tax payments •    Self assess use tax based upon Chipotle tax strategy (needs formalized) •    Sending data requests to Marvin & Poer for personal property tax reporting •    Receiving and reviewing personal property tax payments from Marvin Poer       prior to payment •    Sales and use tax audit administration •    Sending tax rate change requests for existing stores to IT as identified by       states/localities •    New York commercial rent tax preparation and payment (quarterly)	Payments made to Taxing Authorities per due date Tax returns are filed with Taxing Authority per due date
Treasury	•    Setting up new bank accounts based upon guidance from Chipotle       (i.e. established relationships). For so long as McDonald's owns in excess       of 50% of the combined voting power of the outstanding Common Stock       of Chipotle, such bank accounts shall be established utilizing forms and       procedures approved by McDonald's, in each case with approval from the       Treasury Department of McDonald's.	Bank Accounts requested within 60 days of store turnover to Operations
New Stores	•    Setting up new store numbers and cross validation rules in Oracle •    Setting up bank accounts, Merchant IDS and ordering banking supplies •    Communicating sales tax rates to IT per review and research on Checkpoint
Petty Cash	•    Process petty cash expense reports via accounts payable system. •    Regional petty cash accounting (funding)	Invoices processed within an average of 2.5 days or less of receipt
System Access	•    Determine needs and submit a request to IT, Application Development Manager       (Chipotle)
Financial Reporting	•    Distribution of monthly recap via Email on WD4 and WD5 (store level and       company/regional level) •    Distribution of store P&Ls via Email on WD4 and WD5	Prelim P&Ls distributed on WD4 and Final P&Ls distributed on WD5
Licenses	•    Existing store license renewals except for liquor	95% of license renewals processed by due date
Cash Management	•    Daily cash funding	Review cash funding each business day by 10:00 EST
Gift cards	•    Reconcile from the POS to 3rd party administrator—Valuelink on a daily basis. •    Escalate any issues to IT for resolution. •    Book monthly gift card entries for franchise sites. •    Prepare monthly reconciliation from GL to Valuelink balance. •    Bulk gift card entries	Reconcile GL gift card balance to Valuelink monthly

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Chart B: Accounting Tools

Application	Purpose
CHI_JESplits	Used to prepare the journal entry split
CHI_PNLDist	Used to distribute the store P&L
CHI_Recap	Used to see Financial Performance at the various levels
CHI_RegSumPNL	Used to see Financial Performance at the regional level
CHI_RevLIC	Used to ensure licenses are maintained and current—will need to be upgraded after move in November
CHI_RevDCR	Used to verify Deposits, Gift Card transactions, etc
CHI_RevPNL	Used to review the P&L for accuracy
CHI_Transfers	Used to prepare the journal entry for the transfer tickets

15

Services Agreement—Schedule II

Insurance Services

Services:

        McDonald's will negotiate and develop property and casualty insurance programs, terms, coverages, and premiums for Chipotle, including the following categories of insurance:

Fiduciary Liability
Crime
Internet Liability
All Risk Property, including Earthquake and Flood
Umbrella Liability & Excess Liability
General Liability
Workers Compensation
Auto Liability and Physical Damage

In addition, McDonald's will:

(a)

interface with the Network, Gallagher Bassett and other insurance service providers on behalf of Chipotle as reasonably requested by Chipotle;



(b)

enter Chipotle store and office locations into the SOCS system; and



(c)

provide advice on insurance, risk management and claims matters as reasonably requested by Chipotle.

Billing Methodology:

        The amounts to be paid by Chipotle to McDonald's for the Insurance Services are intended to represent the pass-through to Chipotle of costs incurred by McDonald's on Chipotle's behalf.

        With regard to (i) Fiduciary Liability, (ii) Crime, (iii) Internet Liability, (iv) All Risk Property, including Earthquake and Flood, and (v) Umbrella Liability & Excess Coverage insurances, these coverages consist of policies of insurance naming McDonald's and its subsidiaries as insureds (the "McDonald's Policies"). Based on McDonald's' current level of ownership of Chipotle, Chipotle participates as an insured subsidiary under the McDonald's Policies. A portion of the premiums paid by McDonald's for the McDonald's Policies will be allocated to Chipotle (the "Chipotle Allocation"). For the policy period from November 1, 2005 through October 31, 2006, the Chipotle Allocation shall be $645,000.00, which amount shall be paid in full immediately upon execution of this Agreement. For each policy period thereafter, McDonald's shall calculate the Chipotle Allocation in good faith exercising McDonald's' reasonable judgment and, when feasible, considering advice from insurance companies and other relevant, disinterested third parties.

        With regard to (x) General Liability, (y) Workers Compensation, and (z) Auto Liability and Physical Damage insurances, these coverages are included in stand-alone programs arranged specifically for Chipotle and billed directly to Chipotle. As such, McDonald's will collect no fees or costs from Chipotle in connection with these programs.

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Term; Termination of Insurance Services:

        The policies of insurance contemplated by the Insurance Services expire on October 31^st of each calendar year, and, as such, unless terminated earlier pursuant to Section 6.02 of the Agreement or as set forth below, the Insurance Services shall have an initial term expiring on October 31, 2006, and will be renewed automatically thereafter for successive one (1) year terms unless either Chipotle or McDonald's elects not to renew the Insurance Services upon not less than six (6) months' written notice prior to any such renewal.

        The Insurance Services are subject to early termination by either Chipotle or McDonald's at any time on or after an Ownership Reduction Date, provided the terminating party has provided not less than sixty (60) days' written notice of such termination. The required sixty (60) days' written notice may be provided before or after the Ownership Reduction Date, so long as (i) the termination date is no earlier than the Ownership Reduction Date and (ii) the period between the date of notice and the termination date is at least sixty (60) days.

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Services Agreement—Schedule III

Benefits Services

Services:

        On and after the Closing Date, Chipotle employees shall continue to be eligible to participate in McDonald's Plans, subject to the terms of the governing plan documents, as interpreted by the appropriate plan fiduciaries. On and after the Closing Date, subject to regulatory requirements, McDonald's will continue to provide Benefits Services to and in respect of Chipotle employees with reference to McDonald's Plans as it administered the plans prior to the Closing Date. The McDonald's Plans for purposes of this Agreement are as follows:

The McDonald's Corporation Health Plan for Chipotle Employees
McDonald's Ventures 401(k) Plan
The McDonald's Excess Benefit and Deferred Bonus Plan.

Billing Methodology:

        Chipotle shall reimburse McDonald's for McDonald's costs (including any contributions and premium costs and including certain third-party expenses and allocations of certain McDonald's personnel expenses), generally in accordance with past practice, relating to participation by Chipotle employees in the McDonald's Plans.

        The reimbursement for The McDonald's Corporation Health Plan for Chipotle Employees shall be a monthly premium determined actuarially on an annual basis to reflect (a) the prior year's claims experience, (b) risk assumption, (c) plan design, (d) demographic and geographic adjustments, and (e) vendor, legal, benefits accounting, administrative and consulting fees for services on behalf of Chipotle employees for the upcoming year.

        It is the express intent of the Parties that Service Costs relating to the administration of the McDonald's Plans and the performance of related Services will not exceed reasonable compensation for such Services as defined in 29 CFR Section 2550.408c-2.

        In addition, costs associated with certain McDonald's Plans will be paid in part through employee payroll deductions for such McDonald's Plans.

Term; Termination of Benefits Services:

        Unless terminated earlier pursuant to Section 6.02 of the Agreement or as set forth below, the Benefits Services shall have an initial term expiring on December 31, 2006, and will be renewed automatically thereafter for successive one (1) year terms unless either Chipotle or McDonald's elects not to renew the Benefits Services upon not less than six (6) months' written notice prior to any such renewal.

        The Benefits Services are subject to early termination by either Chipotle or McDonald's at any time on or after an Ownership Reduction Date, provided the terminating party has provided not less than sixty (60) days' written notice of such termination. The required sixty (60) days' written notice may be provided before or after the Ownership Reduction Date, so long as (i) the termination date is no earlier than the Ownership Reduction Date and (ii) the period between the date of notice and the termination date is at least sixty (60) days.

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Other Terms and Conditions Relating to Benefits Services

        McDonald's and Chipotle agree to cooperate fully with each other in the administration and coordination of regulatory and administrative requirements associated with McDonald's Plans, including, but not limited to, ERISA, COBRA and HIPAA. Such coordination, upon request, will include (but is not limited to) the (a) sharing payroll data for determination of highly compensated employees, (b) sharing claims data for purposes of plan design, claims appeal determinations and premium calculations, (c) providing census information (including accrued benefits) for purposes of running discrimination tests, (d) providing actuarial reports for purposes of determining the funded status of any plan, (e) reviewing and coordinating of insurance and other independent third party contracts, and (f) providing for review of all summary plan descriptions and other plan communications, requests for determination letters, insurance contracts, Forms 5500, financial statement disclosures and plan documents.

        McDonald's shall provide to Chipotle data or reports requested by Chipotle relating to (a) benefits paid to or on behalf of Chipotle employees under McDonald's Plans, including but not limited to financial statements, claims history, and census information, and (b) other information relating to the Services that is required to satisfy any reporting or disclosure requirement of ERISA or the Code. McDonald's will provide such information within a reasonable period of time after it is requested. The costs for reports shall be billed as incremental costs.

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QuickLinks

Exhibit 10.5

SERVICES AGREEMENT
RECITALS
AGREEMENTS
ARTICLE I DEFINITIONS
ARTICLE II PURCHASE AND SALE OF SERVICES; NO WARRANTY
ARTICLE III SERVICE COSTS; OTHER CHARGES
ARTICLE IV CHIPOTLE DELEGATION; TRADEMARKS AND SERVICE MARKS
ARTICLE V LIMITATION OF LIABILITY; INDEMNIFICATION
ARTICLE VI TERM AND TERMINATION
ARTICLE VII MISCELLANEOUS
Services Agreement—Schedule I Accounting Services
Services Agreement—Schedule II Insurance Services
Services Agreement—Schedule III Benefits Services

EX-10.6

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Exhibit 10.6

CHIPOTLE MEXICAN GRILL, INC.

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

Dated as of January 31, 2006

TABLE OF CONTENTS

		Page
1.	DEFINITIONS	1
2.	DEMAND REGISTRATION	4
	2.1    Requests for Registration	4
	2.2    Continued Effectiveness	5
	2.3    Preemption	5
	2.4    Restrictions	6
	2.5    Payment of Expenses for Demand Registration	6
	2.6    Selection of Underwriters	7
3.	PIGGYBACK REGISTRATION	7
	3.1    Right to Piggyback	7
	3.2    Priority on Primary Registrations	7
	3.3    Priority on Secondary Registrations	7
	3.4    Other Registrations	8
	3.5    Selection of Underwriters	8
	3.6    Limitations on Registrations	8
	3.7    No Effect on Demand Registrations	8
4.	REGISTRATION PROCEDURES	8
5.	REGISTRATION EXPENSES	12
6.	HOLDBACK AGREEMENTS	13
	6.1    Investors' Agreements	13
	6.2    Company's Agreements	13
7.	OTHER AGREEMENTS	13
8.	INDEMNIFICATION AND CONTRIBUTION	14
	8.1    Indemnification	14
	8.2    Contribution	15
	8.3    Procedures	16
	8.4    Survival	17
9.	COMPLIANCE WITH RULE 144	17
10.	MISCELLANEOUS	17
	10.1    No Inconsistent Agreements	17
	10.2    Authority; Enforceability	17

i

10.3    Adjustments Affecting Registrable Shares	18
10.4    Other Registration Rights	18
10.5    Amendments and Waivers	18
10.6    Successors, Assigns and Transferees	18
10.7    Term	19
10.8    Severability	19
10.9    Remedies	19
10.10    Descriptive Headings	19
10.11    Notices	19
10.12    Governing Law	20
10.13    Final Agreement	20
10.14    Execution in Counterparts	20

SCHEDULE:

Schedule 1    Investors

ii

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

        This Amended and Restated Registration Rights Agreement (this "Agreement"), dated as of January 31, 2006, by and among Chipotle Mexican Grill, Inc., a Delaware corporation (together with its successors, the "Company"), McDonald's Ventures, LLC, a Delaware corporation (together with its successors, "McDonald's"), and the parties set forth on Schedule 1 attached hereto (together with their respective successors, the "Individual Shareholders," and, together with McDonald's, the "Investors").

RECITALS

        WHEREAS, the Company has filed a Registration Statement (as defined below) on Form S-1 under the Securities Act (as defined below) with respect to an initial public offering of shares of the Company's class A common stock, $0.01 par value per share (the "Common Stock"), by the Company and McDonald's (the "Initial Public Offering");

        WHEREAS, the Company entered into a Registration Rights Agreement, dated as of March 2, 1998 (the "Registration Rights Agreement"), to formalize certain registration rights with respect to its Series B Convertible Preferred Stock, $0.01 par value per share (the "Series B Preferred Stock");

        WHEREAS, in connection with the Initial Public Offering, each share of the outstanding Series B Preferred Stock will be reclassified automatically into one-third of one share of the Company's class B common stock, $0.01 par value per share (the "Class B Common Stock"); and

        WHEREAS, the parties desire to amend and restate the Registration Rights Agreement to set forth certain registration rights applicable to the Registrable Shares (as defined below) held from time to time by the Investors, and the Company desires to indemnify each of the Investors against certain liabilities to which they may become subject as a result of their investment in the Company;

        NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions hereof, the parties hereto hereby agree as follows:

        1.    Definitions.    The following terms shall have the following meanings when used in this Agreement.

        "Adverse Disclosure" means public disclosure of material non-public information that, in the Board of Directors' good faith judgment, after consultation with independent outside counsel to the Company, (i) would be required to be made in any Registration Statement the Company files with the Commission or otherwise designates as a Registration Statement for the offer and sale of Registrable Shares by the Investors from time to time, so that such Registration Statement would not be materially misleading; (ii) would not be required to be made at such time but for the filing or designation of such Registration Statement; and (iii) the Company has a bona fide business purpose for not disclosing publicly.

        "Affiliate" has the meaning specified in Rule 12b-2 under the Exchange Act. The term "Affiliated" has a correlative meaning.

        "Agreement" has the meaning set forth in the Preamble.

        "Board of Directors" means the board of directors of the Company.

        "Claim" has the meaning set forth in Section 8.2(b).

        "Class B Common Stock" has the meaning set forth in the Recitals.

        "Commission" means the U.S. Securities and Exchange Commission, or any successor governmental agency or authority thereto.

        "Common Stock" has the meaning set forth in the Recitals.

        "Company" has the meaning set forth in the Preamble.

        "Demand Registration" has the meaning set forth in Section 2.1(b).

        "Demand Suspension" has the meaning set forth in Section 2.4.

        "Effectiveness Date" means the date on which McDonald's is no longer subject to any underwriters' lock-up or other contractual restriction in connection with the Initial Public Offering.

        "Equity Securities" means the Common Stock and the Class B Common Stock and any other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock, any stock or security convertible into or exchangeable or exercisable for Common Stock or any stock, security or interest in the Company whether or not convertible into or exchangeable or exercisable for Common Stock.

        "Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

        "Free Writing Prospectus" means a free writing prospectus, as defined in Rule 405 under the Securities Act.

        "Group" has the meaning set forth in Rule 13d-5 under the Exchange Act.

        "Indemnified Company Parties" has the meaning set forth in Section 8.1(b).

        "Indemnified Parties" has the meaning set forth in Section 8.1(a).

        "Individual Shareholders" has the meaning set forth in the Preamble.

        "Initial Public Offering" has the meaning set forth in the Recitals.

        "Investors" has the meaning set forth in the Preamble.

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        "Issuer Free Writing Prospectus" means an issuer free writing prospectus, as defined in Rule 433 under the Securities Act.

        "Long-Form Registration" has the meaning set forth in Section 2.1(a).

        "Losses" has the meaning set forth in Section 8.1(a).

        "McDonald's" has the meaning set forth in the Preamble.

        "Notice of Demand" has the meaning set forth in Section 2.1(b).

        "Permitted Free Writing Prospectus" has the meaning set forth in Section 7(a).

        "Person" means a natural person, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or other entity, or a governmental entity or any department, agency or political subdivision thereof.

        "Piggyback Registration" has the meaning set forth in Section 3.1.

        "Preemption Notice" has the meaning set forth in Section 2.3(a).

        "Prospectus" means the prospectus included in the Registration Statement at each such time as such Registration Statement is filed with the Commission and at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereof, including post-effective amendments, and all material incorporated by reference into such Prospectus.

        "Registrable Shares" means (i) the shares of Common Stock beneficially owned by the Investors on the date hereof; (ii) shares of Common Stock issued or issuable upon conversion of the Class B Common Stock; and (iii) any other shares of Common Stock issued or issuable as a distribution with respect to or in exchange or replacement for or exercise of any shares referred to in clauses (i) and (ii). Registrable Shares shall cease to be such when (i) a Registration Statement with respect to the sale thereof shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such Registration Statement; (ii) they shall have been sold as permitted by Rule 144 (or any successor provision) under the Securities Act; (iii) they shall have been otherwise transferred and subsequent public distribution of them shall not require registration of such distribution under the Securities Act; or (iv) they shall have ceased to be outstanding. For purposes of this Agreement, a Person shall be deemed to be a holder of Registrable Shares whenever such Person has the then-existing right to acquire such Registrable Shares (by conversion or otherwise), whether or not such acquisition actually has been effected.

        "Registration Expenses" has the meaning set forth in Section 5.

        "Registration Period" has the meaning set forth in Section 2.2.

        "Registration Rights Agreement" has the meaning set forth in the Recitals.

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        "Registration Statement" means a registration statement of the Company, concerning the sale of its securities to the public, on an appropriate form under the Securities Act, including the Prospectus included therein, all amendments thereof and supplements thereto (including post-effective amendments) and all exhibits and all material incorporated by reference therein.

        "Securities Act" means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

        "Securities Laws" means the Securities Act and the Exchange Act, and the rules and regulations promulgated thereunder, and state and local "blue sky" securities laws.

        "Series B Preferred Stock" has the meaning set forth in the Recitals.

        "Short-Form Registrations" has the meaning set forth in Section 2.1(a).

        2.    Demand Registration.

                2.1    Requests for Registration.    (a) Subject to the terms of this Agreement, McDonald's may at any time after the Effectiveness Date and once in each nine-month period after the Effectiveness Date, request registration by the Company under the Securities Act of all or part of its Registrable Shares on Form S-1 or any similar long-form registration statement ("Long-Form Registration") for a public offering, so long as McDonald's beneficially owns at least 5% of the vote represented by the Equity Securities at the time of such request. In addition, McDonald's shall be entitled to request an unlimited number of registrations under the Securities Act of all or part of its Registrable Shares on Form S-3 or any similar short-form registration statement ("Short-Form Registration") as described below; provided, however, that the aggregate offering price of the Registrable Shares requested to be registered in any Long-Form Registration or Short-Form Registration must reasonably be expected to equal at least $2,000,000.

        (b)   Any Long-Form Registration and Short-Form Registration requested pursuant to subsection (a) above is referred to herein as a "Demand Registration." Any request for a Demand Registration (each, a "Notice of Demand") shall specify (i) the amount of Registrable Shares proposed to be registered; and (ii) the intended method or methods and plan of disposition thereof, including whether such requested registration is to involve an underwritten offering. Within 45 days of a Notice of Demand, the Company shall file with the Commission, or otherwise designate an existing filing as, a Registration Statement relating to such Notice of Demand for the offer and sale of the Registrable Shares by the Investors from time to time in accordance with the method or methods and plan of disposition elected by such Investors and set forth or to be set forth in such Registration Statement and, thereafter, shall (i) use its reasonable best efforts to cause such Registration Statement promptly to be declared effective under (A) the Securities Act; and (B) the "Blue Sky" laws of such jurisdictions as any seller of Registrable Shares being registered under such Registration Statement or any underwriter, if any, reasonably requests; or (ii) otherwise make available for use by Investors a previously filed effective Registration Statement for the offer and sale of the Registrable Shares.

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        (c)   Subject to the terms and conditions hereof, each Demand Registration shall register the offer and sale of Registrable Shares for all cash consideration and shall be Short-Form Registrations whenever the Company is eligible to use Form S-3, unless McDonald's specifically requests a Long-Form Registration. It is agreed that at any time when the Company is eligible to file a Registration Statement on Form S-3 (or any successor form), McDonald's may request that the Company file a Registration Statement pursuant to Rule 415 under the Securities Act to permit the offering of the Registrable Shares on a delayed or continuous basis. Once the Company has become subject to the reporting requirements of the Exchange Act, the Company shall use its reasonable and best efforts to make Short-Form Registrations available for the sale of Registrable Shares.

                2.2    Continued Effectiveness.    The Company shall use its reasonable best efforts to keep any Registration Statement filed or designated pursuant to Section 2.1(b) continuously effective under the Securities Act in order to permit the Prospectus forming a part thereof to be usable by sellers of the Registrable Shares covered thereby until the earlier of (i) the date as of which all Registrable Shares have been sold pursuant to the Registration Statement or another registration statement filed under the Securities Act (but in no event prior to the applicable period referred to in Section 4(3) of the Securities Act and Rule 174 thereunder); and (ii) the date as of which each of such sellers is permitted to sell its Registrable Shares without registration pursuant to Rule 144 under the Securities Act without volume limitation or other restrictions on transfer thereunder (such period of effectiveness, the "Registration Period"). Subject to Section 2.4, the Company shall not be deemed to have used its reasonable best efforts to keep the Registration Statement effective during the Registration Period if the Company voluntarily takes any action or omits to take any action that would result in sellers of the Registrable Shares covered thereby not being able to offer and sell any Registrable Shares pursuant to such Registration Statement during the Registration Period, unless such action or omission is required by applicable law.

                2.3    Preemption.    (a) If, not more than 30 days prior to receipt of a Notice of Demand, the Company shall have (i) circulated to prospective underwriters and their counsel a draft of a Registration Statement for a primary offering of Common Stock on behalf of the Company; (ii) solicited bids for a primary offering of shares of Common Stock; or (iii) otherwise reached an understanding with an underwriter with respect to a primary offering of shares of Common Stock, the Company may preempt such Demand Registration with such primary offering by delivering written notice of such intention to pursue a primary offering (the "Preemption Notice") to McDonald's within five days after the Company has received the Notice of Demand; provided, however, that the Company shall not be permitted to preempt a Demand Registration (i) more than once during any 12-month period; or (ii) for a period exceeding 30 days following the date of the Preemption Notice on any one occasion, unless a registration statement relating to a primary offering of securities shall have become effective during such 30-day period, in which event such period may be extended for up to an additional 10 days.

        (b)   If the Company preempts a Demand Registration, in the ensuing registration of the primary offering of Common Stock, the Company shall (i) as soon as practicable (but in no event less than 30 days prior to the proposed date of filing or designation of the related Registration Statement), give written notice to the Investors of its intention to make such primary offering and of their right to register their Registrable Shares in connection therewith; and (ii) register under such Registration Statement all Registrable Shares (in accordance with the provisions set forth in Section 3.2 below) with respect to which the Company shall have received written requests therefor within 15 days after delivery of the Company's written notice. If, at any time after giving written notice of its intention to register a primary offering of Common Stock and prior to the effective date of the related Registration Statement, the Company shall determine for any reason not to register or to delay registration of such primary offering, the Company shall give prompt written notice of such determination to each Investor; and (x) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Shares in connection with such registration, but without prejudice to the rights of McDonald's pursuant to Section 2.1; and (y) in the case of a determination to delay the registration, shall be permitted to delay registering any Registrable Shares, for the same period as the delay in registering such primary offering.

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        (c)   Upon the Company's preemption of a registration requested pursuant to Section 2.1, such requested registration shall not be considered a Demand Registration.

                2.4    Restrictions.    The Company shall not be obligated to effect any Long-Form Registration within four months after the effective date of a previous Long-Form Registration. If the filing, designation, initial effectiveness or continued use of a Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving at least 10 days' prior written notice of such action to McDonald's, delay the filing, designation or initial effectiveness of, or suspend use of, the Registration Statement (a "Demand Suspension"); provided, however, that the Company shall not be permitted to exercise a Demand Suspension (i) more than once during any 12-month period; or (ii) for a period exceeding 30 days on any one occasion. In the case of a Demand Suspension, McDonald's agrees to suspend use of the applicable Prospectus and any Free Writing Prospectuses in connection with any sale or purchase, or offer to sell or purchase, Registrable Shares, upon receipt of the notice referred to above. The Company shall immediately notify McDonald's upon the termination of any Demand Suspension, amend or supplement the Prospectus (including by means of an Issuer Free Writing Prospectus), if necessary, so it does not contain any untrue statement or omission and furnish to McDonald's such numbers of copies of the Prospectus and any applicable Issuer Free Writing Prospectus as so amended or supplemented as McDonald's may reasonably request. The Company agrees, if necessary, to amend or supplement the Registration Statement, if required by the registration form used by the Company, by the instructions applicable to such registration form, by the Securities Act or the rules or regulations promulgated thereunder, or as may reasonably be requested by McDonald's.

                2.5    Payment of Expenses for Demand Registration.    The Company shall pay all Registration Expenses (as defined in Section 5 below) for the first two Long-Form Registrations and unlimited Short-Form Registrations. A registration shall count as one of the Company-paid Long-Form Registrations if and only if a Registration Statement with respect thereto has become effective under the Securities Act and remains effective during the Registration Period; provided, however, that in any event the Company shall pay all Registration Expenses in connection with any Long-Form Registration initiated prior to the completion of McDonald's second Long-Form Registration that is withdrawn by the Company or otherwise fails to be declared effective. The Company and McDonald's shall share equally the Registration Expenses of any Long-Form Registration other than the first two Long-Form Registrations.

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                2.6    Selection of Underwriters.    In connection with any Demand Registration, McDonald's shall have the sole right to select the nationally recognized investment banker(s) and manager(s) to administer the offering, subject to the Company's approval, which shall not be unreasonably withheld or delayed.

        3.    Piggyback Registration.

                3.1    Right to Piggyback.    Whenever the Company proposes to register any of its Common Stock under the Securities Act (other than pursuant to a Demand Registration), including any registration pursuant to Section 2.3, or McDonald's requests the Company to register any of its Common Stock under the Securities Act pursuant to a Demand Registration, the Company shall (i) as soon as practicable (but in no event less than 25 days prior to the proposed date of filing or designation of the related Registration Statement), give written notice to the Investors (other than McDonald's, if following a request by McDonald's), as applicable, of its intention to effect such a registration; and (ii) shall register under such Registration Statement all Registrable Shares (in accordance with the priorities set forth in Sections 3.2 and 3.3 below) with respect to which the Company shall have received written requests therefor within 15 days after delivery of the Company's notice (each such registration, a "Piggyback Registration").

                3.2    Priority on Primary Registrations.    If a Piggyback Registration is an underwritten primary registration on behalf of the Company and the managing underwriters advise the Board of Directors in writing that in their opinion the total number of shares of Common Stock (including the Registrable Shares) requested to be included in the registration is such as would create a substantial risk of adversely affecting the ability of the underwriters to effect the underwritten offering, then the Company shall include in such registration only such number of shares of Common Stock, if any, which the Company is so advised can be sold in such offering without materially and adversely affecting the ability of the underwriters to execute the offering. The Company shall include in such registration (i) first, 100% of the Equity Securities that the Company proposes to sell; (ii) second, if McDonald's participates in such registration, 100% of the Registrable Shares that McDonald's proposes to sell; (iii) third, only if all the Registrable Shares referred to in clause (ii) have been included, the number of Registrable Shares requested to be included therein pro rata among the remaining Investors on the basis of the respective number of Registrable Shares as to which registration has been requested; and (iv) fourth, only if all of the Registrable Shares referred to in clauses (ii) and (iii) have been included, any other securities requested to be included therein.

                3.3    Priority on Secondary Registrations.    If a Piggyback Registration is an underwritten secondary registration on behalf of McDonald's and the managing underwriters advise the Board of Directors in writing that in their opinion the total number of shares of Common Stock (including the Registrable Shares) requested to be included in the registration is such as would create a substantial risk of adversely affecting the ability of the underwriters to effect the underwritten offering, then the Company shall include in such registration such number of shares of Common Stock which the Company is so advised can be sold in such offering. The Company shall include in such registration (i) first, 100% of the Registrable Shares that McDonald's proposes to sell; (ii) second, only if all the Registrable Shares referred to in clause (i) have been included, the number of Registrable Shares requested to be included therein pro rata among the remaining Investors on the basis of the respective number of Registrable Shares as to which registration has been requested; and (iii) third, only if all of the Registrable Shares referred to in clauses (i) and (ii) have been included, any other securities requested to be included therein.

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                3.4    Other Registrations.    If the Company has previously filed or designated a registration statement with respect to Registrable Shares pursuant to Section 2.1(b) or pursuant to this Section 3, and if such previous registration has not been withdrawn or abandoned, the Company shall not file, designate or cause to be effected any other registration of any of its Equity Securities under the Securities Act (except on Form S-4 or S-8 or any successor form to such forms or part of any registration of securities for offering and sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit plan arrangement), whether on its own behalf or at the request of any holder or holders of such securities, until a period of at least 120 days has elapsed from the effective date of such previous registration.

                3.5    Selection of Underwriters.    If a Piggyback Registration involves an underwritten primary registration on behalf of the Company, the managing underwriter or underwriters thereof shall be selected by the Company, subject to the approval of the holders of at least 50% by number of the Registrable Shares requested to be registered, which approval shall not be unreasonably withheld or delayed.

                3.6    Limitations on Registrations.    The Company shall not register any of its securities for sale for its own account (other than securities issued to employees of the Company under an employee benefit plan or securities issued to effect a business combination pursuant to Rule 145 promulgated under the Securities Act and other than a registration on Form S-3) except as a firm commitment underwriting.

                3.7    No Effect on Demand Registrations.    No registration or designation of Registrable Shares effected pursuant to a request under this Section 3 shall be deemed to have been effected pursuant to Section 2 or shall relieve the Company of its obligations under Section 2.

        4.    Registration Procedures.    Whenever McDonald's shall have made a Notice of Demand, the Company shall use all reasonable and diligent efforts to effect the registration and sale of such Registrable Shares in accordance with the intended method or methods of disposition thereof and, pursuant thereto, the Company shall as expeditiously as possible:

        (a)   within 30 days of receipt of such Notice of Demand, prepare and file with the Commission, or designate an existing filing as, a Registration Statement with respect to such Registrable Shares and use its reasonable best efforts to cause such Registration Statement to become effective or otherwise make available for use by the sellers of Registrable Shares a previously filed effective Registration Statement; provided that before filing or designating a Registration Statement or Prospectus, or filing any amendment thereof or supplement thereto, the Company shall furnish copies of all such documents proposed to be filed or designated to counsel for the sellers of Registrable Shares;

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        (b)   prepare and file with the Commission such pre- and post-effective amendments of and supplements to such Registration Statement and the Prospectus(es) used in connection therewith as may be (i) reasonably requested by McDonald's; (ii) reasonably requested by any seller of Registrable Shares (to the extent such request relates to information relating to such seller); or (iii) necessary to keep such Registration Statement effective for the Registration Period, and comply with the provisions of the applicable Securities Laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement;

        (c)   furnish to the sellers of Registrable Shares or counsel for the sellers such number of copies of such Registration Statement, the Prospectus(es) included in such Registration Statement (including each preliminary Prospectus), any other prospectus filed under Rule 424 promulgated under the Securities Act relating to the sellers' Registrable Shares, any Issuer Free Writing Prospectuses, and each amendment of and supplement to any of the foregoing, in conformity with the requirements of the Securities Act, and such other documents as any seller may reasonably request in order to facilitate the disposition of its Registrable Shares under such Registration Statement;

        (d)   use its reasonable and diligent efforts to register or qualify such Registrable Shares under the securities or blue sky laws of such jurisdictions as any seller of Registrable Shares reasonably requests and keep such registration or qualification in effect for so long as any Registration Statement remains in effect, and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Shares owned by it; provided that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph; (ii) subject itself to taxation in any such jurisdiction; or (iii) consent to general service of process in any such jurisdiction;

        (e)   notify each seller of Registrable Shares, at any time when a Prospectus relating thereto is required to be delivered under the applicable Securities Laws (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act) and when any Issuer Free Writing Prospectus includes information that may conflict with the information contained in the Registration Statement (including any document incorporated by reference therein that has not been superseded or modified), of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and, at the request of any such seller, the Company shall promptly prepare and furnish to each such seller a reasonable number of copies of an amendment of or supplement to such Prospectus or an Issuer Free Writing Prospectus so that, as thereafter delivered to the purchasers of such Registrable Shares, such Prospectus shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that upon receipt of any notice delivered in accordance with the provisions of this Section 4(e), each seller of Registrable Shares shall be deemed to have agreed that such seller shall forthwith discontinue such disposition of Registrable Shares pursuant to such Registration Statement and Prospectus until the receipt of the copies of the amended or supplemented Prospectus or Issuer Free Writing Prospectus contemplated by this Section 4(e) and, if so directed by the Company, shall deliver to the Company all copies, other than permanent file copies, then in its possession of the Prospectus relating to such Registrable Shares current at the time of receipt of such notice;

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        (f)    cause all such Registrable Shares to be listed, on or prior to the effective date of such Registration Statement, on each securities exchange or national market on which similar securities issued by the Company are then listed;

        (g)   provide a transfer agent and registrar for all such Registrable Shares not later than the effective date of such Registration Statement;

        (h)   enter into such customary agreements (including underwriting agreements) and take all such other customary actions as the underwriters, if any, and their counsel reasonably request in order to expedite or facilitate the disposition of such Registrable Shares (including, but not limited to, effecting a stock split or a combination of shares) and, to the extent reasonably requested by the managing underwriters of any underwritten offering, send appropriate officers of the Company to attend "road shows" scheduled in connection with any such registration;

        (i)    make available for inspection by any seller of Registrable Shares, any underwriter participating in any sale or other disposition pursuant to such Registration Statement, and any legal counsel, accountant or other agent retained by McDonald's or any underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent registered public accountants (subject to any requesting party executing any document reasonably requested by such accountants to furnish such information) to supply all information reasonably requested by any such seller, underwriter, counsel, accountant or agent in connection with such Registration Statement (including the opportunity to discuss the business of the Company with its officers and the independent registered public accountants who have certified its financial statements) as shall be necessary, in the opinion of their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act; and give the sellers and their counsel, accountant or agent and each underwriter the opportunity to participate in the preparation of such Registration Statement, each Prospectus included therein or each Prospectus filed with the Commission in connection therewith;

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        (j)    promptly notify the sellers of Registrable Shares and each underwriter, if any:

(i)

when such Registration Statement or any Prospectus or Issuer Free Writing Prospectus used in connection therewith has been filed and, with respect to such Registration Statement or any post-effective amendment thereof, when the same has become effective;



(ii)

of any written comments from the Commission with respect to any filing referred to in clause (i) and of any written request by the Commission for amendments of or supplements to such Registration Statement, Prospectus or Issuer Free Writing Prospectus;



(iii)

of the notification to the Company by the Commission or any other regulatory authority of its initiation of any proceeding with respect to, or of the issuance by the Commission or any other regulatory authority of, any stop order or notice suspending the effectiveness of such Registration Statement; and



(iv)

of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Shares for sale under the applicable securities or blue sky laws of any jurisdiction;

and, in the case of clauses (ii), (iii) and (iv), promptly use all reasonable and diligent efforts to, respectively, (A) respond satisfactorily to any such comments and to file promptly any necessary amendments or supplements; (B) prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued; and (C) obtain the withdrawal of any such suspension of qualification;

        (k)   upon request, furnish to each seller of Registrable Shares a signed counterpart, addressed to such seller (and each underwriter, if any) of:

(i)

an opinion of counsel to the Company, dated the effective date of such Registration Statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), reasonably satisfactory in form and substance to such seller (and such underwriter); and



(ii)

a "comfort" letter, dated the effective date of such Registration Statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), signed by the independent registered public accountants who have certified the Company's financial statements included in such Registration Statement, provided that such seller of Registrable Shares provides such accountants with such certificates as are reasonably and customarily requested by such accountants;

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in each case covering substantially the same matters with respect to such Registration Statement (and the Prospectus included therein) and, in the case of the accountants' letter, with respect to events subsequent to the date of such financial statements and other financial matters, as are customarily covered in opinions of issuer's counsel and in accountants' letters delivered to the underwriters in underwritten public offerings of securities;

        (l)    otherwise use all reasonable and diligent efforts to comply with all applicable Securities Laws and make available to its security holders, as soon as reasonably practicable an earning statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

        (m)  cooperate with each seller, underwriter or agent participating in the disposition of such Registrable Shares and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc.; and

        (n)   at least 48 hours prior to the filing or designation of any Registration Statement, the filing of any Prospectus or Issuer Free Writing Prospectus or the filing of any amendment of or supplement to such Registration Statement, Prospectus or Issuer Free Writing Prospectus, furnish a copy thereof to the sellers of Registrable Shares or their legal counsel and refrain from filing or designating, as the case may be, any such Registration Statement, Prospectus, Issuer Free Writing Prospectus or amendment thereof or supplement thereto to which such counsel shall have reasonably objected on the grounds that such document does not comply in all material respects with the requirements of the Securities Act or the rules and regulations thereunder, unless, in the case of an amendment or supplement, in the opinion of counsel for the Company the filing or designation of such amendment or supplement is reasonably necessary to protect the Company from any liabilities under any applicable federal or state law and such filing or designation will not violate applicable laws.

        5.    Registration Expenses.    Except as provided in Section 2.5 hereof, all reasonable expenses incident to the Company's performance of or compliance with this Agreement, including, but not limited to, (i) all registration, filing and listing fees and all fees of the National Association of Securities Dealers, Inc.; (ii) all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws; (iii) all word processing, duplicating, printing, messenger and delivery expenses; (iv) the reasonable fees and disbursements of counsel for the Company and of its independent registered public accountants, including, without limitation, the expenses of any "comfort letters" required by or incident to such performance and compliance; (v) the reasonable fees and disbursements of one legal counsel selected by McDonald's (there being no obligation of the Company to pay or reimburse any fees of any separate counsel for any other Investor); (vi) any reasonable fees and disbursements of underwriters customarily paid by issuers or sellers of securities (but excluding underwriting discounts and commissions and transfer taxes, if any, relating to securities being sold by any Investor or that are otherwise not being sold or disposed of by the Company), including, without limitation, reasonable fees and disbursements of counsel for the underwriter(s) in connection with blue sky qualifications of the Registrable Shares and determination of their eligibility for investment under the laws of such jurisdictions; and (vii) reasonable fees and expenses of other Persons retained or employed by the Company (all such expenses being herein called "Registration Expenses"), shall be borne by the Company. In addition, the Company shall pay its internal expenses (including, but not limited to, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any insurance obtained by the Company against liabilities arising out of the public offering of the Registrable Shares being registered and the expenses and fees for listing the securities to be registered on each securities exchange.

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        6.    Holdback Agreements.

                6.1    Investors' Agreements.    Each Investor agrees not to effect any public sale or distribution of Equity Securities during the period beginning seven days before and ending 90 days (or such lesser period as may be permitted by the Company or the managing underwriter or underwriters) after the effective date of the Registration Statement filed or designated in connection with any underwritten public offering, unless the managing underwriter or underwriters thereof shall otherwise agree. Nothing herein shall prevent an Investor that is a partnership from making a distribution of Registrable Shares to its partners, an Investor that is a limited liability company from making a distribution of Registrable Shares to its members, an Investor that is a trust from making a distribution of Registrable Shares to its beneficiaries or an Investor that is a corporation from making a distribution of Registrable Shares to its stockholders, provided that the transferees of such Registrable Shares agree to be bound by the provisions of this Agreement to the extent the transferor would be so bound.

                6.2    Company's Agreements.    The Company agrees not to effect any public sale or distribution of Equity Securities during the period beginning seven days before and ending 90 days (or such lesser period as may be permitted by the managing underwriter or underwriters) after the effective date of the Registration Statement filed or designated in connection with any underwritten public offering (or, in the case of an offering on Form S-3, the date of the closing under the underwriting agreement in connection therewith), unless the managing underwriter or underwriters thereof shall otherwise agree. Notwithstanding the foregoing, the Company may effect a public sale or distribution of Equity Securities during the periods described above if such sale or distribution is made pursuant to registrations on Form S-4 or S-8 or any successor form to such forms or as part of any registration of securities for offering and sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit plan arrangement. The Company agrees to use its reasonable best efforts to obtain from each holder of restricted securities of the Company which securities are the same as or similar to the Registrable Shares being registered, or any restricted securities convertible into or exchangeable or exercisable for any such securities, an agreement not to effect any public sale or distribution of such securities during any period referred to in this paragraph, except as part of any such underwritten public offering, if permitted.

7.

Other Agreements.    (a) Each Investor represents that it has not prepared or had prepared on its behalf or used or referred to, and agrees that it will not prepare or have prepared on it behalf or use or refer to, any Free Writing Prospectus, and has not distributed and will not distribute any written materials in connection with the offer or sale of the Common Stock without the prior express written consent of the Company and, in connection with any underwritten offering, the underwriters. Any such Free Writing Prospectus consented to by the Company and the underwriters, as the case may be, is hereinafter referred to as a "Permitted Free Writing Prospectus." The Company represents and agrees that it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping.

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        (b)   If requested by the underwriter(s) for any underwritten offering pursuant to a Demand Registration, the Company shall enter into an underwriting agreement with such underwriter(s) for such offering, such agreement to contain such representations and warranties by the Company and such other terms as are generally prevailing in agreements of this type. In any such case, the Company shall allow McDonald's and its counsel to participate in the negotiation of such underwriting agreement, and approve its terms, such approval not to be unreasonably withheld or delayed. Each of the Investors participating in such registration shall be a party to such underwriting agreement and may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriter(s) shall also be made to and for the benefit of such Investors and that any or all of the conditions precedent to the obligations of such underwriters(s) under such underwriting agreement be conditions precedent to the obligations of such Investors thereunder. Any such Investor shall not be required to make any representations or warranties to or agreements with the Company other than representations, warranties or agreements regarding such Investor, such Investor's title to the Registrable Shares, such Investor's intended method or methods of distribution and any other representation required by law. No Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees to sell its securities on the basis provided in such underwriting agreement; and (ii) completes and executes all questionnaires, powers of attorney (which may contain customary terms regarding the minimum price of the Registrable Shares to be sold in the subject offering), custody agreements, indemnities and other documents reasonably required under the terms of such underwriting agreement.

        8.    Indemnification and Contribution.

                8.1    Indemnification.    (a) The Company agrees to indemnify and hold harmless, to the extent permitted by law, each Investor and, in the case of an underwritten offering, each underwriter, their respective officers and directors and each Person who controls such Investor or underwriter, as applicable, (within the meaning of the Securities Act) (collectively, the "Indemnified Parties") from and against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities and expenses (including, but not limited to, reasonable attorney's fees and disbursements but excluding taxes imposed as a result of being a direct or indirect owner of the Common Stock or realizing income or gain with respect thereto) (collectively, "Losses"), incurred by, imposed upon or asserted against any of the Indemnified Parties as a result of, relating to or arising out of any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary Prospectus, Issuer Free Writing Prospectus or any amendment thereof or supplement thereto, or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as the same are caused by, contained in or omitted from any information furnished in writing to the Company by such Investor expressly for use therein or by such Investor's failure to deliver a copy of the Prospectus, Issuer Free Writing Prospectus or any amendment thereof or supplement thereto after the Company has furnished such Investor with a sufficient number of copies of the same. Unless and until a final and non-appealable judicial determination shall be made that an Indemnified Party is not entitled to indemnification, the Company shall pay or reimburse each Indemnified Party for all indemnified Losses as they are incurred; provided that if a final and non-appealable judicial determination shall be made that such Indemnified Party is not entitled to be indemnified for Losses, such Indemnified Party shall repay to the Company the amount of such Losses for which the Company shall have paid or reimbursed such Indemnified Party.

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        (b)   In connection with any Registration Statement in which an Investor is participating, each such Investor agrees, as a condition of the Company's obligation to indemnify, to furnish to the Company in writing such information as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and shall indemnify and hold harmless, to the extent permitted by law, the Company, its officers and directors and each Person who controls the Company (within the meaning of the Securities Act) (collectively, the "Indemnified Company Parties") from and against any and all Losses incurred by, imposed upon or asserted against any of the Indemnified Company Parties as a result of, relating to or arising out of (i) any untrue or alleged untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus, Issuer Free Writing Prospectus or any amendment thereof or supplement thereto, or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, but only to the extent that the same are caused by, contained in or omitted from any information furnished in writing to the Company by such Investor of, if not furnished in writing, which is acknowledged by such Investor in writing to have been contained in or omitted from the information so provided; and (ii) any Free Writing Prospectus used by such Investor without the prior consent of the Issuer; provided that the obligation to indemnify shall be several, not joint and several, among the Investors who furnished or failed to furnish the information that resulted in such Losses and the liability of each such Investor shall be in proportion to and limited in all events to the net proceeds received by such Investor from the sale of Registrable Shares pursuant to such Registration Statement.

                8.2    Contribution.

        (a)   To the extent the indemnification provided for in Section 8.1 hereof is unavailable to an indemnified Person or insufficient in respect of any Losses referred to therein, then an indemnifying Person, in lieu of indemnifying such indemnified Person thereunder, shall contribute to the amount paid or payable by such indemnified Person as a result of such Losses (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying Person on the one hand and the indemnified Person on the other hand; or (ii) if the allocation provided by clause (i) of this Section 8.2(a) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) in this Section 8.2(a) but also the relative fault of the indemnifying Person on the one hand and of the indemnified Person on the other hand in connection with the acts, statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. In connection with any Registration Statement filed with the Commission by the Company, (x) the relative benefits received by the Company on the one hand and the Investors on the other hand shall be deemed to be in the same respective proportions as the net proceeds from the offering of securities registered thereunder (before deducting expenses) received by the Company and the net proceeds from the offering of securities registered thereunder (before deducting expenses) received by the Investors, bear to the aggregate public offering price of the securities registered thereunder; (y) the relative fault of the Company on the one hand and the Investors on the other hand shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Investors and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; and (z) the Investors' respective obligations to contribute pursuant to this Section 8.2 are several in proportion to the respective number of shares of securities they sell under any such Registration Statement, and not joint, and the contribution of each Investor shall be in proportion to and limited in all events to the net proceeds received by such Investor from the sale of Registrable Shares pursuant to such Registration Statement.

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        (b)   The Company and the Investors agree that it would not be just or equitable if contribution pursuant to this Section 8.2 were determined by pro rata allocation (even if the Investors were treated as one entity for such purposes) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 8.2(a) hereof. The amount paid or payable by an indemnified Person as a result of the Losses referred to in Section 8.2(a) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified Person in connection with investigating or defending any action or claim for Losses (a "Claim"). Notwithstanding the provisions of this Section 8.2, in connection with any Registration Statement filed by the Company, none of the Investors shall be required to contribute any amount in excess of the net proceeds from the offering of the securities registered thereunder (before deducting expenses) received by such Investor under such Registration Statement. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8.2 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified Person at law or in equity.

                8.3    Procedures.    Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying Person of any Claim with respect to which it seeks indemnification; and (ii) unless in such indemnified Person's reasonable judgment a conflict of interest between such indemnified and indemnifying Persons may exist with respect to such Claim, the indemnifying Person shall have the absolute right, in its sole discretion and expense, to elect to defend, contest or otherwise protect against any such Claim with legal counsel of its own selection, reasonably satisfactory to the indemnified Person. The indemnified Person shall have the right, but not the obligation, to participate, at its own expense, in the defense thereof through counsel of its own choice and shall have the right, but not the obligation, to assert any and all cross-claims or counterclaims it may have. If the indemnifying Person elects to assume the defense of such Claim, the indemnifying Person shall not be subject to any liability for any settlement made by the indemnified Person without its consent (but such consent shall not be unreasonably withheld or delayed). An indemnifying Person who is not entitled to, or elects not to, assume the defense of a Claim shall not be obligated to pay the fees and expenses of more than one counsel for all Persons indemnified by such indemnifying Person with respect to such Claim, unless in the reasonable judgment of any indemnified Person a conflict of interest may exist between such indemnified Person and any other of such indemnified Persons with respect to such Claim. The indemnified Persons shall, and shall cause their Affiliates to, at all times cooperate in all reasonable ways with, make their relevant files and records available for inspection and copying by, and make their employees available or otherwise render reasonable assistance to, the indemnifying Person (i) in its defense of any Claim; and (ii) its prosecution under the last sentence of this Section 8.3 of any related claim, cross-complaint, counterclaim or right of subrogation. In the event the indemnifying Person fails timely to defend, contest or otherwise protect against any such Claim, the indemnified Person shall have the right, but not the obligation, to defend, contest, assert cross-claims or counterclaims or otherwise protect against the same. The indemnifying Person shall be subrogated to the claims or rights of the indemnified Person as against any other Persons with respect to any Loss paid by the indemnifying Person under this Section.

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                8.4    Survival.    The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified Person or any officer, director or controlling Person of such indemnified Person and shall survive the transfer of securities.

        9.     Compliance With Rule 144.    At the request of any Investor who proposes to sell securities in compliance with Rule 144 under the Securities Act, the Company shall (i) forthwith furnish to such Investor a written statement of compliance with the filing requirements of the Commission as set forth in Rule 144, as such rule may be amended from time to time; and (ii) make available to the public and such Investor such information as will enable such Investor to make sales pursuant to Rule 144.

        10.   Miscellaneous. 

                10.1    No Inconsistent Agreements.    The Company shall not hereafter enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Investors in this Agreement or otherwise conflicts with the provisions hereof.

                10.2 Authority; Enforceability.    Each entity and each natural person that is a party hereto has the corporate power and legal capacity, respectively, and each has the authority to enter into this Agreement and to carry out its obligations hereunder. Each entity that is a party hereto is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all necessary action, and no other act or proceeding, corporate or otherwise, on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly executed by each party and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally and to the exercise of judicial discretion in accordance with general principles of equity (whether applied by a court of law or of equity).

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                10.3    Adjustments Affecting Registrable Shares.    The Company shall not take any action, or permit any change to occur, with respect to its restated certificate of incorporation or amended and restated bylaws which would reasonably be expected to adversely affect the ability of Investors to include such Registrable Shares in a registration undertaken pursuant to this Agreement or which would reasonably be expected to adversely affect the marketability of such Registrable Shares in any such registration.

                10.4    Other Registration Rights.    The Company shall not hereafter grant to any Person or Persons the right to request the Company to register any Equity Securities without the prior express written consent of McDonald's.

                10.5    Amendments and Waivers.    This Agreement may be amended, supplemented or modified at any time, and any term or condition of the Agreement may be waived at any time by the party hereto that is entitled to the benefit hereof, in each case by a written instrument duly executed by the Company and (i) in the case of any such amendment, supplement or modification, McDonald's and the holders of at least 80% of the vote represented by the Registrable Shares held by the remaining Investors; or (ii) in the case of any such waiver, by the party waiving such term or condition; provided, however, that the provisions of this Agreement may not be amended, supplemented or modified without the consent of the holders of all the Registrable Shares adversely affected by such amendment, supplement or modification if such amendment, supplement or modification adversely affects a portion of the Registrable Shares but does not so adversely affect all of the Registrable Shares. Any amendment, supplement or modification of this Agreement or waiver of any term or condition of this Agreement effected in accordance with this Section 10.5 shall be binding upon each holder of Registrable Shares. No waiver by any party of any term or condition of this Agreement, in one or more instances, shall be deemed to be or construed as a waiver of the same term or condition of this Agreement on any future occasion.

                10.6    Successors, Assigns and Transferees.

        (a)   Each party may assign all or a portion of its rights hereunder to any Person to which such party transfers its ownership of all or any of its Registrable Shares; provided that no such assignment shall be binding upon or obligate the Company to any such assignee unless and until the Company shall have received notice of such assignment as herein provided and a written agreement of the assignee to be bound by the provisions of this Agreement; and provided, further, that the rights described under Section 2.1 shall not transfer to any Person unless such Person (i) is an Affiliate of the holder transferring such rights; or (ii) acquires at least 33¹/3% of the Registrable Shares initially held by McDonald's.

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        (b)   The terms and provisions of this Agreement shall be binding on and inure to the benefit of each of the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to confer upon any Person not a party hereto (other than each other Person entitled to indemnity or contribution under Section 8 hereof) any right, remedy or claim under or by virtue of this Agreement.

                10.7    Term.    Section 8 hereof shall remain in effect with respect to an Investor so long as such Investor may, in the reasonable judgment of counsel for such Investor as evidenced by a written opinion to such effect, constitute a "controlling person" with respect to the Company, or be part of a Group that may constitute such a "controlling person," within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.

                10.8    Severability.    Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, (i) such provision shall be fully severable; (ii) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof; (iii) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance here from; and (iv) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

                10.9    Remedies.    Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically, to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law.

                10.10    Descriptive Headings.    The headings contained in this Agreement are inserted for convenience of reference only and do not constitute a part of and shall not affect in any way the meaning or interpretation of this Agreement.

                10.11    Notices.    Any notice, requests and other communications required or permitted to be sent hereunder must be in writing and shall be deemed to have been duly given only if (i) delivered personally; (ii) given by facsimile transmission; (iii) delivered by FedEx or other nationally recognized overnight courier service; or (iv) mailed (first class postage prepaid), certified mail, return receipt requested to the parties at the addresses or facsimile numbers set forth below, or such other address or facsimile number as any Person designates by written notice to the Company, and shall be deemed to have been duly given upon delivery, if delivered personally, upon receipt by the sender of a printed facsimile confirmation sheet, if given by facsimile transmission, one business day after delivery to the courier, if delivered by overnight courier service, or three days after mailing, if mailed:

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        If to the Company, to:

Chipotle Mexican Grill, Inc.
2546 15th Street
Denver, CO 80211
Attention: Chief Executive Officer

        If to the Investors, to the addresses set forth on Schedule 1 hereto.

If to holders of the Registrable Shares other than the Investors, to the addresses set forth on the stock record books of the Company.

                10.12    Governing Law.    This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

                10.13    Final Agreement.    This Agreement supersedes and replaces the Registration Rights Agreement in its entirety, constitutes the complete and final agreement of the parties concerning the matters referred to herein, and supersedes all other prior agreements and understandings among the parties with respect to the subject matter.

                10.14    Execution in Counterparts.    This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and such counterparts together shall constitute one instrument.

        [Remainder of page intentionally left blank]

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The parties hereto have executed this Agreement on the date first set forth above.
	CHIPOTLE MEXICAN GRILL, INC.
	/s/ Steve Ells Name: Steve Ells Title: Chairman and CEO
	MCDONALD'S VENTURES, LLC
	/s/ Mats Lederhausen Name: Mats Lederhausen Title: President and Managing Director
	/s/ Kurt Altman Kurt Altman
	/s/ Michael Baghramian Michael Baghramian
	/s/ Albert S. Baldocchi Albert S. Baldocchi, as to shares owned jointly with Anne M. Baldocchi and individually
	/s/ Anne M. Baldocchi Anne M. Baldocchi, as to shares owned jointly with Albert S. Baldocchi
	/s/ Robert Bernstein Robert Bernstein
	/s/ Michele Castle Michele Castle
	/s/ Hardy W. Chan Hardy W. Chan

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The Marybeth Cohen Family Partnership

/s/ Marybeth Cohen Name: Marybeth Cohen
Title: General Partner

/s/ Marybeth Cohen Marybeth Cohen

/s/ Robert P. Cook Robert P. Cook,
as to shares owned jointly with Eda S. Cook

/s/ Eda S. Cook Eda S. Cook,
as to shares owned jointly with Robert P. Cook

/s/ AnnMarie Don Vito AnnMarie Don Vito

/s/ Michael Duffy Michael Duffy

/s/ Barbara Ells Barbara Ells,
as to shares owned jointly with Robert Ells

/s/ Steve Ells Steve Ells

/s/ Robert Ells Robert Ells,
as to shares owned jointly with Barbara Ells

/s/ Neil W. Flanzraich Neil W. Flanzraich

22

The Neil W. Flanzraich Revocable Trust

/s/ Neil W. Flanzraich Name: Neil W. Flanzraich
Title: Trustee

/s/ Ken S. Fong Ken S. Fong,
as to shares owned jointly with Pamela P. Fong

/s/ Pamela P. Fong Pamela P. Fong,
as to shares owned jointly with Ken S. Fong

Alan H. Friedman Revocable Trust

Name:
Title:

/s/ Darlene J. Friedman Darlene J. Friedman

Jay Friedman

Jeffrey Friedman

Josh Friedman

Ron Friedman

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/s/ Tom Giordano Tom Giordano

/s/ Melvyn Goodman Melvyn Goodman

/s/ Brand Gould Brand Gould

Cecilia Gowins

/s/ Marlane Harrington Marlane Harrington

/s/ Laura Linkow Hill Laura Linkow Hill,
as to shares owned jointly with Robert F. Hill

/s/ Robert F. Hill Robert F. Hill,
as to shares owned jointly with Laura Linkow Hill

Robert and Laura Linkow Hill Revocable Trust

/s/ Laura Linkow Hill Name: Laura Linkow Hill
Title: Trustee

/s/ Roy Kuramoto Roy Kuramoto

/s/ Alfred LaNasa Alfred LaNasa

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MDG Company

/s/ Melvyn Goldman Name: Melvyn Goldman
Title: Administrative Partner

/s/ Montgomery F. Moran Montgomery F. Moran

/s/ Erich Overhardt Erich Overhardt

Victoriano Pena

/s/ Andrew Petriwsky Andrew Petriwsky

/s/ Gretchen Selfridge Gretchen Selfridge

/s/ Scott Shippey Scott Shippey

Ariel Solomon

/s/ Timothy Spong Timothy Spong

Terri Strauss

/s/ Joseph Stupp Joseph Stupp

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/s/ John M. Thompson John M. Thompson,
as to shares owned jointly with Nancy R. Thompson

/s/ Nancy R. Thompson Nancy R. Thompson,
as to shares owned jointly with John M. Thompson

Jon H. Tolson and Linda A. Tolson Living Trust

Name:
Title:

/s/ Jorge Velazquez Jorge Velazquez

/s/ Kevin Wamego Kevin Wamego

Margaret Zgol

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Schedule 1

Investors

McDonald's Ventures, LLC
1 Parkview Plaza, Suite 640
Oakbrook Terrace, IL 60181

w/a copy to:

McDonald's Ventures, LLC
c/o McDonald's Corporation
Attn: General Counsel
2915 Jorie Blvd.
Oak Brook, IL 60523

Kurt Altman
4187 South Granby Circle
Aurora, CO 80014

Michael Baghramian
29 Sea Isle Drive
Long Beach, CA 90803

Robert Bernstein
Bernstein-Rein Advertising, Inc.
4600 Madison, Suite 1500
Kansas City, MO 64112

Michele Castle
2761 Kendrick Street
Golden, CO 80401

Hardy W. Chan
ScinoPharm Taiwan, LTD.
No. 1 Nan-Ke Eighth Road
Tainan Science Industrial Park
Shan-Hua, Tainan County 741
Taiwan, R.O.C.

The Marybeth Cohen Family Partnership
538 Huckleberry Lane
Franklin Lakes, NJ 07417

Marybeth Cohen
538 Huckleberry Lane
Franklin Lakes, NJ 07417

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Robert P. and Eda S. Cook
171 Turnberry Road
Half Moon Bay, CA 94019

AnnMarie Don Vito
2007 West Evergreen Ave., Apt. #3
Chicago, IL 60622

Steve Ells
c/o Chipotle Mexican Grill, Inc.
1543 Wazee Street, Suite 200
Denver, CO 80202

Robert and Barbara Ells
17 Sandstone St.
Portola Valley, CA 94028

Neil W. Flanzraich
IVAX Corporation
4400 Biscayne Boulevard
Miami, FL 33137

The Neil W. Flanzraich Revocable Trust
Revocable Trust UAD 6/10/88
c/o Mr. Neil W. Flanzraich
IVAX Corporation
4400 Biscayne Boulevard
Miami, FL 33137

Ken S. and Pamela P. Fong
P.O. Box 969
Menlo Park, CA 94026

Alan H. Friedman Revocable Trust
c/o Alan H. and Darlene J. Friedman
429 Bear Creek Circle
Napa, CA 94558

Darlene J. Friedman
429 Bear Creek Circle
Napa, CA 94558

Jay Friedman
460 Hillsborough Street
Thousand Oaks, CA 91361

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Jeffrey Friedman
6175 Hill Road
Oakland, CA 94618

Josh Friedman
455 South Irving Boulevard
Los Angeles, CA 90020

Ron Friedman
PO Box 32741
Santa Fe, New Mexico 87594

Tom Giordano
12975 Kilger Court
Pickerington, OH 43147

Melvyn Goodman
c/o L.A. Sani-Felt Co.
830 E. 59th Street
Los Angeles, CA 90001

Brand Gould
5065 Lowell Boulevard
Denver, CO 80221

Cecilia Gowins
201 Jay Street
Lakewood, CO 80226

Marlane Harrington
4685 Honeymoon Bay Road
Freeland, WA 98249

Robert F. and Laura Linkow Hill
1441 18th Street, Suite 100
Denver, CO 80202

Robert and Laura Linkow Hill Revocable Trust
1441 18th Street, Suite 100
Denver, CO 80202

Roy Kuramoto
373 Pine Lane, #1112
Los Altos, CA 94022

Alfred LaNasa
4400 West University #1433
Dallas, TX 75209

29

MDG Company
c/o Mr. Melvyn Goodman
830 E. 59th Street
Los Angeles, CA 90001

Montgomery F. Moran
7705 Fairview Road
Boulder, CO 80303

Erich Overhardt
7603 Leatherfern Court
Pinellas Park, FL 33782

Victoriano Pena
624 Winona Court
Denver, CO 80204

Andrew Petriwsky
c/o Paul Durr, PC
1777 S. Harrison Street, Suite P309
Denver, CO 80210

Gretchen Selfridge
15 Timber Lane
Evergreen, CO 80439

Scott Shippey
6116 Ginita Lane
Austin, TX 78739

Ariel Solomon
3142 5^th Street
Boulder, CO 80304

Timothy Spong
612 Fairfield Lane
Louisville, CO 80027

Terri Strauss
14032 East Chenango Drive
Aurora, CO 80015

Joseph Stupp
225 Lincoln Street, #5
Denver, CO 80203

30

John M. and Nancy R. Thompson
20 Sandstone
Portola Valley, CA 94028

Jon H. Tolson and Linda A. Tolson Living Trust
c/o Jon H. Tolson
165 29^th Avenue
San Francisco, CA 94121

Jorge Velazquez
216 Quart Street
Binghamton, NY 13901

Kevin Wamego
2509 South Pittsburg Avenue
Tulsa, OK 74114

Margaret Zgol
3153 Renaissance Drive
Rio Rancho, NM 87124

31

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Exhibit 10.6

CHIPOTLE MEXICAN GRILL, INC. AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
TABLE OF CONTENTS
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
RECITALS

Schedule 1

Investors

EX-10.8

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EXHIBIT 10.8

SUMMARY OF DIRECTOR COMPENSATION

        Each non-employee director will receive an annual cash retainer of $25,000 and an annual grant of $25,000 in shares of class A common stock. We'll pay non-employee directors $1,500 for each meeting of the board of directors that they attend and $1,000 for each meeting of a committee of the board of directors that they attend ($500 in the case of telephonic committee meeting). Annual retainers will be paid to the chairperson of each committee of the board of directors as follows: $20,000 for the audit committee chairperson, $5,000 for each of the compensation committee chairperson and the nominating/governance committee chairperson and $3,000 for the chairperson of any other committee established by the board of directors. Directors will also be reimbursed for expenses incurred in connection with their service as directors, including travel expenses for meeting attendance. Each of Messrs. Baldocchi, Charlesworth and Flynn and Ms. Friedman is entitled to payment of $12,000 in 2006 for service as a director during 2005.

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EXHIBIT 10.8

SUMMARY OF DIRECTOR COMPENSATION

EX-23.1

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EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-131289) pertaining to the Chipotle Mexican Grill, Inc.—Chipotle Executive Stock Option Plan and the Chipotle 2006 Stock Incentive Plan filed with the Securities and Exchange Commission of our report dated March 14, 2006, with respect to the consolidated financial statements of Chipotle Mexican Grill, Inc. included in the Annual Report (Form 10-K) for the year ended December 31, 2005.

Denver, Colorado
March 14, 2006

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EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

EX-31.1

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EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Steve Ells, certify that:

1.

I have reviewed this annual report on Form 10-K of Chipotle Mexican Grill, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors or (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 17, 2006

/s/ Steve Ells Steve Ells
Founder, Chairman and Chief Executive Officer
(Principal Executive Officer)

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EXHIBIT 31.1

SECTION 302 CERTIFICATION

EX-31.2

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EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, John R. Hartung, certify that:

1.

I have reviewed this annual report on Form 10-K of Chipotle Mexican Grill, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors or (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 17, 2006

/s/ John R. Hartung John R. Hartung
Chief Finance and Development Officer
(Principal Financial Officer)

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EXHIBIT 31.2

SECTION 302 CERTIFICATION

EX-31.3

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EXHIBIT 31.3

SECTION 302 CERTIFICATION

I, Montgomery F. Moran, certify that:

1.

I have reviewed this annual report on Form 10-K of Chipotle Mexican Grill, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors or (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 17, 2006

/s/ Montgomery F. Moran Montgomery F. Moran
President and Chief Operating Officer
(Principal Operating Officer)

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EXHIBIT 31.3

SECTION 302 CERTIFICATION

EX-32.1

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EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Steve Ells, the Founder, Chairman and Chief Executive Officer Chipotle Mexican Grill, Inc. (the "Registrant"), Montgomery F. Moran, the President and Chief Operating Officer of the Registrant and John R. Hartung, the Chief Finance and Development Officer of the Registrant, each hereby certifies that, to the best of his knowledge:

1.

The Registrant's Annual Report on Form 10-K for the period ended December 31, 2005, to which this Certification is attached as Exhibit 32.1 (the "Periodic Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2.

The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Registrant at the end of the period covered by the Periodic Report and results of operations of the Registrant for the periods covered by the Periodic Report.

Date: March 17, 2006

/s/ Steve Ells Steve Ells Founder, Chairman and Chief Executive Officer (Principal Executive Officer)	/s/ John R. Hartung John R. Hartung Chief Finance and Development Officer (Principal Financial Officer)
/s/ Montgomery F. Moran Montgomery F. Moran President and Chief Operating Officer (Principal Operating Officer)

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EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002