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TheStreet Open House

Chipotle's Monty Moran Unwraps the Restaurant's Success Story

Stocks in this article: CMG MCD SBUX

NEW YORK (TheStreet) -- Chipotle (CMG - Get Report)  , led by co-CEOs Monty Moran and Steve Ells, is something of a phenomenon in the American dining industry. Pictures of enormous Chipotle burritos light up Twitter feeds across the country almost around the clock, while Vine videos showing long lunch lines at newly opened locations flood Facebook.

The company also has become a phenomenon on Wall Street for its aggressive number of annual new restaurant openings and robust sales growth from pre-existing sites.

Read More: Buffalo Wild Wings CEO Tackles the Future with Innovation

But staying in the good graces of hungry consumers and Wall Street won't be easy tasks for Chipotle as copycats of its successful business model sprout and investors demand ever-higher profits. To ensure there are no disappointments, Chipotle is staying true to what has made it so successful: It remains focused on the guest experience and responsibly raised ingredients that are making folks question the origin of traditional fast food, and the necessity to eat it.

Read More: Domino's Pizza CEO Says Big Ideas are in the Oven

The attention to the smallest of details continues to pay dividends for the company. Chipotle's five-year compound annual growth rate (CAGR) in revenue is 19.27% compared to an industry average of 5.49%, according to Bloomberg. Gross profit margins in 2013 of 66.6% far surpassed Starbucks' (SBUX - Get Report) 57.1% and McDonald's (MCD - Get Report)  56%.

More recently, Chipotle's same-restaurant sales have accelerated for three-consecutive quarters, notching a 17% increase in the second quarter. By comparison, the domestic business of Starbucks recorded a second-quarter same-restaurant sales gain of 6%, McDonald's a 1.5% decline for its U.S. division.

Chipotle's Moran talked exclusively with TheStreet about how the company is preserving its unique employee culture, one that is grounded in promoting from within through its restaurateur program, as the chain grows both with its namesake and with new concepts. Moran also addressed how the company's business model is upending the traditional fast food industry.

Brian Sozzi: How are you implementing what has worked so well with Chipotle's culture into your newer concepts ShopHouse and Pizzeria Locale?

Moran: Our vision is that any concept we are involved with will benefit from our unique people culture. We think that the people culture and food culture, as well as the unit economic model, are what yields the extraordinary success that we've had, and are keys to any concept going forward.

With ShopHouse, there are already a couple of restaurants that have become restaurateur restaurants. In fact, there are four that have become restaurateurs already out of seven total restaurants. They have bought into the people culture. With Pizzeria Locale, it's also their intent to operate their restaurants with a unique culture.

Sozzi: And at the still new international locations?

Moran: It's going really well. It's too early for me to tell in Germany, as I haven't gone to the German restaurant since it has been opened. But from what I understand the team is very dedicated and the restaurant runs well. I have spent a fair amount of time in the restaurants in France, and a whole bunch of time in the restaurants in London. We have had some restaurateurs that have left the U.S. to go to work in England and France who have done a marvelous job of putting in place that people culture.

In the U.K., we have four out of six total restaurants that are now restaurateur restaurants.

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