Mexican fast-food chain Guzman y Gomez (GYG) has announced the closure of its eight restaurants in Chicago, ending its six-year expansion into the United States market. The company will redirect its resources toward its core Australian operations, where it aims to grow from approximately 250 stores to 1,000 stores.
Decision and Rationale
On Friday, GYG announced it would cease trading at its US restaurants immediately.
Founder and co-CEO Steven Marks stated that the US business was not meeting internal financial targets and that sales momentum was not improving sufficiently to justify continued investment.
According to Marks, after spending three months in the US, he determined that achieving success in the American market would require significantly more time and capital than anticipated. In a statement to the Australian Securities Exchange, Marks said: “In assessing the trajectory of the current network, the board and I have concluded that the business is unlikely to deliver the performance that would justify continued investment of shareholder capital.”
RBC Capital Markets analyst Michael Toner described the exit as positive, stating: “On current unit economics, we believe the US business had very low prospects of being successful, and the losses of the business were weighing down the earnings of the group so the sooner exit than anticipated is positive.”
Financial Impact
The US exit will incur an estimated one-off charge of US$30-40 million ($42-56 million), with some sources projecting a total cost of approximately $50 million in the company's 2026 full-year results. Cash costs are expected not to exceed US$15 million. The charge is not expected to affect the final dividend.
GYG reported that US sales fell from $4.1 million to $3.9 million in the second half of 2025. The company had invested tens of millions of dollars in the US market over several years.
Australian Market Focus
GYG stated that Australia remains the core focus of its business. The company expects to open 32 restaurants in Australia this financial year. Its FY26 Australian segment underlying EBITDA is projected at approximately $85 million, representing a 29% increase from the previous year. In February, GYG reported Australian store sales growth of 17.4% to $632 million in the second half of 2025.
The company targets 1,000 Australian restaurants and an underlying EBITDA margin of 10% of network sales. As of end of 2025, GYG had 237 stores in Australia, making it the ninth largest chain ahead of Oporto.
Colliers retail leasing manager Nathan Brown stated that GYG's 1,000-store target is "practically happening on the ground." Brown also noted: "From an Australian point of view, they only take the A-grade sites... they're extremely tough negotiators." Commercial property experts cited challenges in securing suitable land due to competition from residential development.
GYG's Australian operations face competition from other fast-food chains including El Jannah, Grill'd, Zambrero, Taco Bell, Betty's Burgers, Wendy's, McDonald's, KFC, and Hungry Jack's.
International Markets
The company continues to expand in Singapore and Japan and remains open to entering other markets.
Company Background
GYG was founded in Sydney in 2006. The company listed on the Australian Securities Exchange (ASX) in mid-2024. Its initial public offer price was A$22 per share. Following the US exit announcement, GYG's share price rose over 15% in late morning trading, though it remains below the IPO price.
Industry Context
The US has been referred to by some analysts as a "graveyard" for Australian fast-food companies, with prior closures including Crust Pizza and Oporto.
Alba Prop director Tom Mifsud commented: “What works here is not a pick-and-drop exercise into different countries... There are lessons learned on both sides.”