Chipotle Mexican Grill has a lot going for it -- an upscale burrito concept, a hip and eco-friendly image, expansion plans galore and a 500 percent-plus stock price gain in just over two years.
And then it has something not going its way -- a federal crackdown on its immigrant labor force that has so far forced Chipotle to fire hundreds of allegedly illegal workers in the state of Minnesota, perhaps more than half its staff there.
The probe is widening. Co-Chief Executive Monty Moran told Reuters on Friday that U.S. Immigration and Customs Enforcement (ICE) has also issued "notices of inspection" for restaurants in Washington D.C. and Virginia.
Investors in the Wall Street darling are taking note and one firm, Calvert Investments, plans to talk to Chipotle about the large number of undocumented workers uncovered.
Dependence on illegal labor is the elephant in the room for the U.S. restaurant business. And experts say the Chipotle ICE investigations are a wake-up call for an industry that is one of America's biggest employers and generates over $300 billion in annual sales, according to research firm IBISWorld Inc.
Chipotle -- a Denver-based company whose motto is "Food With Integrity" -- is one of the most well-known names caught in the immigration enforcement shift that began two years ago.
At that time, Barack Obama, a proponent of immigration reform to help manage the 11 million undocumented immigrants in the United States, became president. Also at that time, immigrant hiring by restaurants began to rebound.
Obama has had to walk a fine line on the issue. He must uphold the law and appease Americans resentful of illegal immigrants working as the unemployment rate stubbornly sits at 9 percent. But he needs to do it in a way palatable to Hispanic voters who will be key to his re-election in 2012.
Gone are the days of big raids that snared large numbers of workers, mostly from Mexico and Central America. Under Obama, immigration enforcement agents are cracking down on employers with so-called "I-9 audits" -- I-9 being the employment eligibility verification form.