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Guzman y Gomez is shifting focus back to Australia after dumping its failed US expansion, with commercial property experts tipping a fierce battle for prime suburban fast-food sites.<\/p>\n
Fast-food giant Guzman y Gomez is shifting focus to an aggressive 1000-store land grab across Australia after dumping its failed American expansion.<\/p>\n
The ASX-listed burrito chain has abandoned its struggling US restaurants and flagged a $US30m ($42m) to $US40m ($56m) hit to exit America and refocus on its core Australian market.<\/p>\n
Investors sent GYG shares almost 20 per cent higher on Friday, despite the one-off cost, as the company moved to end a costly six-year push into the world\u2019s biggest fast-food market. But commercial property experts say the real battle is now at home, where GYG is chasing prime suburban sites as part of a long-term plan to grow from about 250 Australian restaurants to 1000.<\/p>\n Colliers retail leasing manager Nathan Brown said GYG remained one of the strongest quick-service restaurant tenants in the country, despite its US retreat.<\/p>\n \u201cFrom an Australian point of view, they only take the A-grade sites,\u201d Mr Brown said.<\/p>\n \u201cThey do not take the B-grade, C-grade sites, which some of these other tenants, like Taco Bell or Carl\u2019s Jr, have taken in the past.<\/p>\n \u201cAnd they\u2019re extremely tough negotiators.<\/p>\n \u201cThey\u2019re easy to deal with, but they\u2019re tough negotiators.\u201d<\/p>\n Colliers retail leasing manager Nathan Brown said Guzman y Gomez remained one of Australia\u2019s strongest quick-service restaurant tenants, but its 1000-store target would depend on securing scarce A-grade sites.<\/p>\n Mr Brown said the failed US expansion was unlikely to hurt GYG\u2019s standing with Australian landlords.<\/p>\n \u201cI don\u2019t really think it\u2019s going to affect them, because they\u2019ve built a certain brand here in Australia now,\u201d he said. \u201cMaccas has probably dropped back a bit. KFC has probably dropped back a bit.<\/p>\n \u201cThat whole clean, fresh eating campaign that you consistently hear on radio or see on television definitely translates with what the Australian market wants these days.\u201d<\/p>\n Mr Brown said GYG\u2019s 1000-store ambition was real, but finding the right land would be a major challenge as fast-food operators competed with housing developers for scarce suburban blocks.<\/p>\n \u201cEvery time a retailer puts a number of stores out there, that\u2019s very much a blue-sky goal,\u201d he said.<\/p>\n \u201cWhat is the actual realistic chance of that happening? I think it\u2019s a bit lower than that.<\/p>\n Guzman y Gomez founder and co-chief executive Steven Marks has pulled the pin on the chain\u2019s US restaurants after conceding the American expansion would take more time and capital than expected.<\/p>\n \u201cBut where that typically comes from is those brands mapping out wish locations where they would like a site.<\/p>\n \u201cAnd albeit they might like that location, it might be extremely hard to find that piece of real estate in that location.\u201d<\/p>\n He said established suburbs were particularly difficult because the kind of large, prominent blocks fast-food chains wanted were often worth more as residential development sites.<\/p>\n \u201cIf I use the example of Caulfield in Victoria, where are you going to find a 2000sq m piece of land where you\u2019re going to be able to build a fast-food restaurant on it over residential or mid-rise residential?\u201d he said.<\/p>\n \u201cYou\u2019re not. That\u2019s not the highest and best use for that location.<\/p>\n \u201cSo, albeit they want those locations, that doesn\u2019t necessarily mean they can actually materially get it.<\/p>\n \u201cThere might be only one or two sites in that whole suburb that relate to the requirements they have.\u201d<\/p>\n Steven Marks said the US business was unlikely to justify further shareholder investment, with GYG now expected to sharpen its focus on its Australian growth plans.<\/p>\n Mr Brown said GYG\u2019s store target was not just a public relations number.<\/p>\n \u201cFrom dealing with them, that 1000 number is bang on,\u201d he said.<\/p>\n \u201cI was in a meeting with them two days ago and that was reiterated, that the 1000 mark is the number they want to hit.<\/p>\n \u201cSo it\u2019s practically happening on the ground as well and not just a number that\u2019s put out there in the consumer and media world.\u201d<\/p>\n Guzman y Gomez has abandoned its Chicago restaurants after a costly six-year push into the US, but its Australian store ambitions remain firmly on the menu.<\/p>\n Alba Prop director Tom Mifsud said GYG\u2019s American exit showed even successful Australian food brands could not assume their local model would translate overseas.<\/p>\n \u201cWhat works here is not a pick-and-drop exercise into different countries,\u201d Mr Mifsud said.<\/p>\n \u201cThat means costs, wages, product type, product positioning, the makeup of the food, the whole lot.<\/p>\n \u201cSo there are lessons learned on both sides.\u201d<\/p>\n Alba Prop director Tom Mifsud said GYG\u2019s US exit showed Australian brands could not simply drop a local fast-food model into overseas markets and expect it to work.<\/p>\n Mr Mifsud said the company\u2019s US retreat would become a test case for other Australian companies with global ambitions.<\/p>\n \u201cWhat you will find is that GYG\u2019s expansion becomes a great test case for other ambitious entrepreneurs and business owners who are looking to globalise,\u201d he said.<\/p>\n \u201cWhen they go overseas and look to deploy their product, they can avoid those learnings, make it less costly, and capitalise on the learning.\u201d<\/p>\n Guzman y Gomez has about 250 Australian restaurants and is chasing a long-term 1000-store target, putting it in a growing fight for suburban sites with major fast-food rivals. Picture: Brendan Radke<\/p>\n He said he did not expect the failed US expansion to damage GYG in Australia, where the brand was already well understood by consumers.<\/p>\n \u201cGYG is here. We know it, we understand it,\u201d he said.<\/p>\n \u201cPeople get behind great Aussie ventures, and it\u2019s iconic to the Aussie brand.<\/p>\n \u201cPeople look at the brand and affiliate it with Australians, and that\u2019s what we\u2019re all about.\u201d<\/p>\n GYG\u2019s renewed Australian focus comes as the local fast-food market becomes increasingly crowded, with El Jannah, Grill\u2019d, Zambrero, Taco Bell, Betty\u2019s Burgers, Wendy\u2019s, McDonald\u2019s, KFC and Hungry Jack\u2019s all competing for customers and prime suburban locations.<\/p>\n The US might have rejected GYG, but its next fight will be much closer to home.<\/p>\n Sign up to the Herald Sun Weekly Real Estate Update. 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\u201cI think in terms of sentiment, the most popular brand in Australia right now is most certainly GYG with consumers, in my opinion.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/05\/capi_0415164e49615e39c58d2f92ed07a897_7d69cb6a50e1030dc75773a5fef8d748.jpeg\")
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