Chipotle's founder could be the biggest problem the struggling chain's new CEO has to tackle

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Chipotle's founder could be the biggest problem the struggling chain's new CEO has to tackle

Chipotle Burrito

Hollis Johnson

Chipotle has a new CEO.

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  • Chipotle's founder, Steve Ells, is stepping down as CEO, and Taco Bell's CEO Brian Niccol is taking over as chief executive.
  • The new CEO's success will be "directly related" to the freedom he is given.
  • "Niccol will likely face an uphill battle in uprooting some of that heritage, as he's stepping into a role occupied by a founder for the past 25 years," one analyst told Business Insider.

Chipotle's new CEO's biggest challenge could be taking on the chain's founder.

On Tuesday, the company announced that Taco Bell's CEO, Brian Niccol, had been tapped for the top executive position.

Investors and analysts celebrated the pick. Niccol's experience turning around Taco Bell with a mix of clever advertising and wild new menu items makes him an attractive fit to lead Chipotle's turnaround efforts.

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Chipotle Steve Ells

AP Images

Chipotle founder Steve Ells is stepping down from his role as CEO.

But, some people have found it curious that Chipotle picked as its new CEO the man behind the junk-food icon Doritos Locos Tacos.

Chipotle's current CEO and founder, Steve Ells, has long been known for his obsessive dedication to all-natural "food with integrity." Ells will continue to serve on Chipotle's board, focusing on food sourcing and preparation.

Mizuho analyst Jeremy Scott told Business Insider that deciding what Ells' new role will involve is "critical" to the success or failure of the chain's turnaround.

"We believe the success of Niccol will be directly related to how much legroom he has to shake things up," Scott said.

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"Niccol will likely face an uphill battle in uprooting some of that heritage, as he's stepping into a role occupied by a founder for the past 25 years," Scott said. "He needs to be an internal activist."

Ells, for his part, has promised that the new CEO will have plenty of freedom.

"It's a delicate balance bringing in a new CEO," Ells said in a call with investors earlier in February.

"Of course," Ells continued, "you've heard of examples where new CEOs have come in but have not really been allowed to act as a CEO, and I fully intend to have the new CEO be in charge."

Niccol will become Chipotle's new CEO on March 5.

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