Guzman y Gomez: the recipe for fast food success is simpler than you’d think!
- Thu 27 June 2024
- 3 MIN READ
What’s the secret recipe for a successful fast food chain?
According to Guzman y Gomez founders Steven Marks and Robert Hazan, a passion for quality, authenticity, a commitment to core values and the ability to have some fun. The New York natives turned their dream of “reinventing fast food to change the way the masses eat” into a thriving international franchise.
A fresh idea for a new market
Guzman y Gomez (ASX:GYG), known to fans as ‘G-Y-G’, approached the idea of takeaway fast food with fresh ingredients, authentic flavours, and a nod to Mexican street art in a convenient and affordable way for people craving a delicious lunchtime burrito or a late-night taco.
The brand's journey began in 2006, with a flagship store in Sydney’s Newtown. Since then, it has grown to 210 restaurants across four countries including Australia, Singapore, Japan and the USA. GYG employs over 10,000 staff and serves more than 600,000 customers weekly, making them a household name to many Australians. On 20 June 2024, the company listed on the Australian Securities Exchange (ASX) under the ticker code ASX: GYG with a pre-trading valuation of $2.2 billion. Upon opening the stock surged 36 percent to close the day with a value of $3 billion, making it the largest IPO on ASX since 2021.
Marks, a former hedge fund manager, and Hazan, who worked in fashion, relocated to Australia in 2002. They noticed a gap in the market for the fresh, clean Mexican food they loved in America. With this realisation, they set about building a brand centred on five core values encompassing high quality food, an amazing customer experience, authenticity, a safe work environment, and accountability. Unsurprisingly, these principles have been instrumental in GYG’s growth as a business in the lead up to listing.
First in first serve
The initial public offering (IPO) saw enormous demand and the offer was upgraded from $242.5 million to $335.1 million in June to accommodate Capital Research Global Investors, known for stakes in Chipotle, Yum! Brands, and Mediterranean food chain Cava. Despite the high demand, about $120 million worth of shares remained for allocation after $210 million were reserved for cornerstone investors.
Upon opening, the stock surged 36 percent to close the day with a value of $3 billion, making it the largest IPO on ASX since 2021.
In the prospectus, the company outlined growth to over 1,000 Australian stores within the next two decades as its goal, stating it is confident it has the pipeline and infrastructure to support 30 new restaurants per annum, increasing to 40 per annum within the next five years. The company states that the proceeds from the float will be used for exactly that - funding growth and expanding its restaurant network in Australia.
On summarising the magnitude of the day, Marks said “It hadn’t really settled in until we were up there and ringing that bell, but it was a lifelong dream. Not just mine, but for everybody at GYG. When you have more than 10,000 people in the restaurants, these amazing franchisees and everybody’s involved, you know, it’s just surreal and I couldn’t be happier.”
With the Quick Service Restaurant (QSR) industry going from strength to strength and extraordinary investor support, the market is excited to see what the future holds for this Mexican flavoured Aussie brand.
ASX welcomed Guzman y Gomez to the Australian Securities Exchange on 20 June 2024. Watch the video to experience the excitement on the day as everyone celebrated their public listing.
About the author
