If Wendy's Can Recover From A Finger In Its Chili, Chipotle Can Recover From E Coli Outbreaks

Anna Ayala claimed she was distraught, and authorities believed her.

The Las Vegas woman called police on March 22, 2005, and said she'd found a human finger in a bowl of chili she'd ordered from a Wendy's restaurant in San Jose, California, The Smoking Gun reported.

Within two days, the story went national; several news sites and newspapers ran prominent stories about the gruesome discovery, alongside photos of the severed finger that had been turned over to authorities.

The story snowballed, late-night comedians had weeks' worth of fodder for jokes about the secret ingredient in Wendy's chili, and the fast-food chain lost millions in revenue as disgusted customers stayed away.

By the time Ayala was arrested and her claim was exposed as a hoax -- she'd gotten the finger from a friend who suffered an industrial accident -- the damage to the Wendy's brand had been done.

Now, another fast-food chain is facing a test to its reputation, and its executives can learn from the Wendy's chili debacle.

Chipotle has not had a good couple of months; the company closed dozens of locations in late October 2015 after an E. coli outbreak sickened 55 customers in 11 different states, according to the FDA. Twenty-one of those victims were hospitalized.

A second, smaller outbreak was tracked to Chipotle restaurants in December 2015, and the two incidents combined prompted a federal investigation into the company's methods and protocols for things like cleanliness and sick leave.

The outbreaks have hit the Mexican food chain hard, with sales in January plummeting by 36 percent, according to the Daily Mail. Quarterly earnings declined for the first time since the company went public in 2006.

Realizing they have a long road ahead of them in terms of winning back customer trust, Chipotle executives tried to combine transparency, apologies and free food as a mea culpa to put-off customers. On Feb. 8, they rented 400 theaters and conference rooms across the country for an all-hands presentation to the company's 50,000 employees. Chipotle bigwigs talked about changes to the way the restaurants handle everything from marinating meat to chopping vegetables.

But the presentation wasn't just for employees; the company, which styles itself as a healthy alternative to other fast-food restaurants, simulcast parts of the meeting online and live-tweeted the presentation to its 730,000 Twitter followers.

"We've come together today to make sure Chipotle is not just the most delicious place to eat, but also the safest," co-CEO Monty Moran said, according to CNN. "We worked with experts who helped us create the most effective food safety program possible."

Because stores were closed for four hours, Chipotle offered free burritos to anyone who texted the word "raincheck" to a dedicated number during the meeting.

Those are the first, small steps toward reconciling with customers. A full recovery is going to take more effort, including convincing customers that Chipotle is really making an effort to ensure sick employees stay home and running specials to lure diners, who have many other options in a crowded fast-food market.

Without missteps, Chipotle will recover. Like Wendy's' recovery, it won't be instantaneous, and shareholders will need to exercise patience. But there are takeaways from the Wendy's incident that may apply to Chipotle's woes: The public has a short memory, and time heals all wounds.

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Sources: Daily Mail, FDA, CNN, AP via NBC, The Smoking Gun / Photo credit: Chipotle/Twitter

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