Mexican Grill Inc. said on Monday that it has signed four leases in the Washington, D.C., and Los Angeles markets for its new ShopHouse Southeast Asian Kitchen concept, bringing the planned locations to eight by mid 2014.
The Denver-based chain opened the first of its fast-casual Asian restaurants in Washington in 2011 on Dupont Circle and plans to open a second there in a few weeks in nearby Georgetown. Two more units are under construction in the Los Angeles area, in Santa Monica and Hollywood.
Chipotle said it is planning to add another four of the ShopHouse restaurants to both markets.
Steve Ells, founder, chair and co-chief executive of Chipotle, said the response to the ShopHouse concept has been similar to that of Chipotle in its early days. “People love the food and the experience, and appreciate that we are giving them something that is unique and flavorful, and doing it in a way that is accessible and affordable,” he said in a statement.
The newest leases signed include locations in Los Angeles’ Westwood neighborhood, near UCLA, as well as one in Bethesda, Md., a suburb of Washington. The company plans to open both units this year.
In addition, the company plans to open two more units in the D.C. area by mid 2014: One downtown on 7th Street and one in Rockville, Md., another D.C. suburb.
ShopHouse is designed to follow the same model as Chipotle, with guests building their meal as they walk the service line. Rather than burritos, however, the options at ShopHouse include Southeast Asian-inspired rice and noodle bowl dishes with marinated meats, spicy sauces, and herbs and vegetables.
After Chipotle’s most recent earnings report in April, Ells said the company wasn’t accelerating growth yet but was still “planting seeds” for the concept. The primary focus remains the Mexican-inspired Chipotle brand, which has 1,450 locations in the North America and Europe, he said.
The company expects to open between 165 and 180 Chipotle restaurants this year.
In a call with analysts, Ells said at the time the chain also offered sampling of ShopHouse dishes at company-sponsored “Cultivate” festivals in various cities last year.
“We are really pleased with the response so far,” he said, but the company would not ramp up growth for ShopHouse until “we feel like the teams are ready, the customer acceptance is ready, the awareness is ready.”
Wall Street analysts have expressed optimism that ShopHouse offers Chipotle another huge growth opportunity.
In a report Monday, Stephen Anderson of Miller Tabak + Co. LLC, wrote, “Although we do not expect ShopHouse to grow as large as the flagship Chipotle at this time, we contend the company can open as many as 300-400 ShopHouse locations in the next 10 years in urban/downtown and campus locations, given what we think is its strong appeal to younger demographics.”
Anderson pointed to cities like Chipotle’s hometown of Denver, Chicago and San Francisco as possibly next in line for Shophouse locations. Those cities are also hosting Cultivate festivals this year.