In 2015, the fast casual chain Chipotle had over 500 custome…
In 2015, the fast casual chain Chipotle had over 500 customers in 43 different stores become ill from food that was contaminated with salmonella and E. Coli. In the weeks following this event, Chipotle had its biggest decrease in customer traffic, and in turn revenue, in company history. This spawning from significant negative publicity from news outlets and social media. As a result, Chipotle settled a lawsuit with the victims of the food-borne illness, where the company paid a total of $25 million in the class-action settlement. Additionally, Chipotle invested another $10 million in increased food safety programs for the entire company, to help minimize the likelihood of another major food-borne illness from occurring again. In terms of the Cost of Risk to an organization: what does the $10 million food safety program represent for Chipotle?
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