Chipotle is set to offer an 11-year, $5 billion contract to buy back and replace its more than 5,000 restaurants.
The deal is a boon for Chipotle.
The chain’s shares have risen nearly 4% this year and the company is already seeing a significant uptick in its profits.
Chipotle had a $4.5 billion market cap before the merger with Yum Brands, and has a projected net profit of $5.4 billion for fiscal year 2021.
The company said in January that it planned to raise $7 billion in the deal.
This deal could be a boon to Chipotle, which has struggled in recent years due to the food chain’s growing competition.
Chipotle said in February that it plans to increase its revenue and margins, though its financials are still not quite where they should be.
The company’s new CEO, John Mackey, also said he wanted to improve customer service in the restaurant.
“We’re going to make sure that people are getting the value they deserve and we’re going the extra mile to make that happen,” Mackey said in a recent interview with CNN.
“I’m going to do that to Chipleyl, and I want to do it right.
I want people to come back, we want to make the experience better.”
For years, Chipotle has had a reputation for being a little pricey.
It has also been plagued by problems with food safety, and in 2015, Chipotles supplier, Aramark, reported it would be closing nearly a quarter of its restaurants.
But in 2018, the company reported record revenue for the year.
Mackey is set on making the restaurant chain more affordable, and he said the restaurant will be profitable.
“The restaurants will be as good as they can be and we will keep spending money,” he said.
“Our customers will come back.”
The deal is expected to close by the end of the year, according to The Wall Street Journal.
In 2018, Chipoltes stock rose about 6%, from $11.35 to $15.60.