Guzman y Gomez’s big challenge? Keeping its franchisees smitten
The growth of the Mexican-themed fast food business is directly tied to its store owners. The experience of other companies shows managing this is no easy task.
Here’s something investors thinking about stumping up for Guzman y Gomez shares should consider. The growth of the Mexican-themed fast-food business is directly tied to keeping its franchisees profitable and happy. The experience of other companies in this space – be it fast food or convenience – shows that will be no easy task.
Guzman y Gomez’ detractors point to its huge valuation – $3 billion on debut last month – and the fact that the company is not profitable. It has an enormous growth target of 1000 stores in Australia in two decades, up from 185. To put that into perspective, McDonald’s has about 1000 stores, and it has been here since 1971.
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Carrie LaFrenz is a senior journalist covering retail/consumer goods. She previously covered healthcare/biotech. Carrie has won multiple awards for her journalism including financial journalist of the year from The National Press Club. Connect with Carrie on Twitter. Email Carrie at carrie.lafrenz@afr.com
Max Mason covers financial crime, courts and corporate wrongdoing. A Walkley Award winner, Max’s journalism has also received awards from the National Press Club of Australia, the Kennedy Awards and Citibank. Message Max on Signal https://tinyurl.com/MaxMason Connect with Max on Twitter. Email Max at max.mason@afr.com
