Mexican fast food chain Guzman y Gomez (GYG) is planning to open an additional 30 drive-thrus in Australia over the next 12 months, which will bring the company’s total store count to over 180 locations across Australia, Singapore, Japan and the US. Ultimately, GYG founder and CEO Steven Marks believes there’s room for at least 500-600 locations in Australia, where the first GYG opened in 2006. His goal is to turn GYG into the best restaurant company in the world. “It will be – bec
because we’re fanatical about quality and we’re fanatical about people. And if you nail those two things, your guests are going to love you,” Marks told Inside Retail.
The store expansion follows Magellan Financial Group’s $86.8 million investment in the company last December, which valued the business at a reported $870 million. GYG had reportedly been eyeing an IPO before meeting with Magellan, which also holds shares in Starbucks, Yum and McDonald’s.
“I don’t think people understand how significant it is to get an investment from Magellan,” Marks said.
Part of that investment will go towards revamping GYG’s stores to keep up with increased demand for drive-thru and delivery since the start of the global pandemic. Delivery through UberEats, Menulog, Deliveroo and DoorDash now represents around 30 per cent of GYG’s business, according to Marks.
“That definitely got stronger during Covid, but you know what else blew up was our drive-thrus,” he said.
In the US, where GYG opened its first store in a suburb of Chicago in September last year, drive-thru has been critical in allowing the company to trade while dining rooms have been shut.
Marks remains enthusiastic about the potential of the US market, where he believes GYG can differentiate on quality and convenience and benefit from a large population that is already familiar with Mexican food.
“Nothing like this exists in the US,” he said.
GYG plans to have another three to four stores up and running in the US by the end of 2021.
50 per cent comparable store sales
With booming online sales and a growing store network, Marks expects GYG’s annual revenue to be about $500 million next year.
“Every week’s a record week at GYG. The comps [comparable store sales] we’re seeing, I don’t think they’ve ever been seen before in fast food,” he said.
According to Marks, GYG’s comparable store sales were up 30 per cent on average year on year last year, including CBD locations. They’re currently up 50 per cent on average. For comparison, Domino’s same-store sales growth in the first half of FY21 was 8.5 per cent.
“I truly believe that the more people that try GYG, the more they realise that our food quality is exceptional,” he explained.
Marks also credits the company’s franchisees and store teams for creating a point of difference when people walk into a GYG location.
“When you build a brand, what makes you into something special is soul,” he said.
That’s why Marks has no plans to open an automated GYG, where customers can order from kiosks, as other major fast food chains have done in recent years, although the company is investing in digital technology in other areas.
“I like when you walk in and there are these beautiful people that want to engage with you. That’s hospitality,” he said.