Guzman y Gomez exits US market after failing to establish itself
Consensus Summary
Guzman y Gomez (GyG) announced the closure of its US operations on May 22, 2026, after failing to achieve sales targets in its eight Chicago stores despite significant investment. The decision followed a three-month effort by founder Steven Marks to revive the struggling business, which had been losing money for years. GyG cited the US marketâs competitive nature and the difficulty of establishing a new fast-food brand in a space dominated by established players like Chipotle. The closures will cost up to US$40 million and result in 300 job losses, but analysts and investors reacted positively, with GyGâs share price rising sharply. The company will now focus on its core Australian market, where it operates 242 stores and plans further expansion, alongside smaller operations in Singapore and Japan. GyGâs US exit underscores the challenges Australian fast-food chains face in entering the US market, often referred to as a 'graveyard' for such ventures.
â Verified by 2+ sources
Key details reported by multiple sources:
- Guzman y Gomez (GyG) is closing its US business after failing to meet sales targets, with up to US$40m (A$56m) in one-off costs expected.
- GyG founder and co-CEO Steven Marks stated the US business performance was 'not acceptable' and could not justify further investment.
- GyG had eight stores in Chicago, which are now closing, and will result in about 300 US job losses.
- GyGâs US stores were required to hit sales targets of US$60,000 ($84,000) per week per restaurant to validate expansion, but underperformed expectations.
- GyGâs share price rose by approximately 9-18% on the day of the announcement, closing at $19.81.
- GyG has 242 stores in Australia and plans to open 32 more before the current financial year ends, with a long-term target of 1,000 restaurants globally.
- GyG has previously invested at least $115 million into its failed US expansion.
- GyGâs Australian business remains its core focus, with strong growth in Australia, Singapore (24 stores), and Japan (5 stores).
- GyGâs US exit was described as a positive move by analysts, including RBC Capital Marketsâ Michael Toner, who stated the US business had 'very low prospects of being successful'.
Points of Difference
Details reported by only one source:
- GyGâs US stores offered bigger burritos than in Australia to attract American customers.
- GyGâs stock price rose more than 15% by late morning trading after the announcement.
- GyGâs initial public offering (IPO) price on the ASX was $22, and its current share price remains below that level.
- GyG was described as a 'graveyard' for Australian fast food chains, citing previous failures like Crust Pizza and Oporto in the US.
- GyGâs founder Steven Marks grew up in New York and claimed the chainâs name was inspired by two Mexican childhood friends.
- Steven Marks moved to Chicago for three months in a last-ditch attempt to turn around the US business, arriving in late February 2026.
- Marks had previously stated in 2021 that GyG would 'take care of the US first, then move south' and was 'very tied to Mexico'.
- GyGâs IPO in mid-2024 saw its market value soar above $3 billion at a burrito-serving event.
- GyGâs share price initially surged 18% before paring back to 9.6% by late afternoon.
- GyGâs US business was described as a 'distraction' by ECP Asset Management partner Jason Pohl, who emphasized the Australian businessâs 'strong economics'.
- GyGâs US stores were not forecast to break even until 2037, according to RBC Capital Markets.
- GyGâs Australian business had 237 stores at the end of 2025, making it the ninth-largest chain in Australia, ahead of Oporto.
Contradictions
Conflicting information between sources:
- The Guardian states GyGâs share price rose more than 15% by late morning, while SMH reports it initially surged 18% before paring back to 9.6% by late afternoon.
- The Guardian mentions GyGâs stock price remains below the $22 IPO price, while SMH does not explicitly state this but notes a steady decline since the IPO.
- The Guardian says GyGâs US stores were not forecast to break even for 'at least another decade,' while SMH specifies the break-even point was projected for 2037.
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Company founder Steven Marks says US stores will close as it can no longer justify cost of trying to break into crowded market Follow our Australia news live blog for latest updates Get our breaking news email , free app or daily news podcast Guzman y Gomez is closing its US business after failing to establish itself in a market already rich with Mexican food, confirming the American countryâs reputation as a âgraveyardâ for Australian fast food companies. The Mexican-themed chain told sharehold