Chipotle Prepares To Enter The Burger Industry (NYSE:CMG)

Chipotle Mexican Grill may be preparing to take on the burger industry with a new offering. Reports are showing that earlier this month, the company filed a trademark for the name “Better Burger”with the U.S. Patent and Trademark Office. Some say that this is an indication that the burrito chain is looking to open a new line of hamburger restaurants.

In 2014, U.S. burger restaurants made about $73 billion in sales, according to data from food industry research firm CHD Expert. Roughly 7 percent of all U.S. restaurants nationally are burger restaurants. A new fast-casual burger chain would bring fresh competition to Five Guys Burgers & Fries, Smashburger, and Shake Shack Inc. Earlier this month, Shake Shack reported that its fourth-quarter sales rose 49.2 percent to $49.3 million and same-restaurant sales rose 11 percent.

Chipotle said it has applied for the trademark as part of a business diversification plan. The plan may be necessary for growth as the burrito maker has struggled to recover from health safety issues that damaged its business last year. In February, Chipotle reported its worst quarterly performance as a publicly traded company. Same-store sales tumbled 26 percent in the month, and the company expects to report a loss in the first quarter.

The company believes that the Chipotle model could be applied to a wide variety of foods. It already has two non-Chipotle growth seeds open now ― ShopHouse Southeast Asian Kitchen and Pizzeria Locale. Chipotle opened its first ShopHouse in Washington in 2011 and has since expanded the chain to Los Angeles and Chicago. Last year, Chipotle began expanding Pizzeria Locale beyond its initial locations in Denver and Boulder, Colo.

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