Guzman y Gomez closes US operations, citing market challenges

Guzman y Gomez is closing its U.S. business after failing to gain traction in a market already saturated with Mexican food, reinforcing the country’s reputation as a graveyard for Australian fast-food chains.

The Mexican-themed chain informed shareholders Friday that the performance of its U.S. stores had not met acceptable levels, despite its well-publicised plans to become the best and biggest restaurant company in the world.

It currently lists eight stores in the Chicago area on its U.S. website. The closures are expected to cost GyG up to US$40 million (A$56 million) in one-off costs.

Steven Marks, founder and co-chief executive of GyG, said the performance of the U.S. business could no longer justify the required investment.

“I have always been confident in the differentiation of our food and guest experience, however this was not translating to an improvement in sales momentum,” Marks said Friday.

“Having spent the last three months in the US, I realised this was going to take significantly more time and capital than we had expected.”

Some analysts had not expected the U.S. business to break even for at least another decade.

The United States has been described as a graveyard for Australian companies, particularly those in fast food. It has previously proven too challenging for chains such as Crust Gourmet Pizza and Oporto.

Analysts had earlier raised concerns that GyG would struggle to compete with established Mexican-themed chains like Chipotle, along with numerous Latin American restaurants.

GyG offered larger burritos in the U.S. than in Australia in an attempt to woo American customers, who typically demand bigger portions.

RBC Capital Markets analyst Michael Toner said the U.S. exit was a positive development.

“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,” Toner said.

GyG said Australia remains the core focus of the business, although it is also expanding in Singapore and Japan.

At the end of 2025, there were 237 GyG stores in Australia, according to data analysis company GapMaps, making it the ninth largest chain, just ahead of Oporto.

GyG and rival Zambrero are among the fastest-growing chains, highlighting the popularity of Mexican-themed food in Australia.

The big three chains—Subway, McDonald’s and KFC—are also expanding rapidly, while Domino’s and Red Rooster closed more stores than they opened last year.

GyG listed on the ASX in mid-2024. After an initial period of strong share market performance, its stock price slumped after struggling to meet shareholder expectations.

Its share price rocketed Friday after the announcement, rising more than 15% by late morning trading. However, GyG stock remains priced below the A$22 initial public offer price that retail investors paid.