Guzman y Gomez expands restaurant empire in USA with more Australian stores opening

The founder of Aussie taco chain Guzman y Gomez has just opened a new US restaurant as he continues to expand his empire — with more Aussie stores coming. See the full list.

Justin Vallejo

@justinjvallejo

5 min read

January 20, 2023 - 10:46PM

News Corp Australia Network

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He’s not quite selling ice to an Eskimo (yet). But the irony of an Australian taco chain capturing the attention of Americans, intensely proud of their Mexican cuisine, is not lost on Steve Marks.

The Guzman y Gomez founder and CEO this week opened the company’s second location in the United States, which is home to more Mexicans than Australia has people.

“It’s funny, when people heard we started in Australia they think it’s ‘Australian-Mexican’. It just happened to be started in Australia,” Marks tells News Corp Australia from the unassuming Illinois suburb of Schaumburg, a 45-minute drive northeast of downtown Chicago where they sold 4536 burritos and bowls on day one.

“We don’t have crocodile tacos on the menu,” he laughs.

“When we opened up in Naperville, they see a bunch of Australians so they don’t know what to expect.”

Guzman y Gomez founder and CEO Steven Marks at the opening of his second US location in Chicago.

Beating Taco Bell, Chipotle and an infinite number of taco carts at their own game, on their home turf, will take more than the company’s newly-minted valuation of $1.5 billion.

Or the backing of high-profile Aussie athletes, like Western Sydney Giants’ star Matt de Boer, Wallabies captain Michael Hooper, or NBA champion Matt Dellavedova.

Even the deep pockets of private equity behemoth Aware Super, which scooped up much of the selldown by Magellan Financial Group last year, aren’t the secret ingredients behind the company’s explosive growth plans. Winning in the US’s cutthroat fast food market will take equal parts of the burrito king’s special sauce: Australian-made, New York-grade.

Guzman y Gomez meals served at the opening of Marks’ second US location in Chicago.

Combining Australian ingenuity and an American’s gift of the gab, the New Yorker-turned Sydneysider returned to his home country to restart Covid-delayed plans for global guacamole domination; with all the boom and bullishness of a former Wall Street hedge fund manager from Queens.

Marks is more of a master salesman than a master chef.

Guzman y Gomez burritos being served in Chicago.

He leaves the kitchen to authentic Mexican cooks. The rapid rise from one store in Newtown in 2006 to 170 globally today is testament to the confidence in his pitch as much as the consumption of his pinto beans.

When Guzman y Gomez Steven Marks first opened his Newtown store in 2006.

He has a knack for staying on message. Focusing on the product. And drumming up investment. All while putting the right people in place to keep the drive-through rolling as he moves on to the next opening.

Now Guzman y Gomez founder and CEO Steven Marks continues to expand his empire overseas.

It’s a masterclass in messaging. Budding entrepreneurs could take note.

The US is not the Mexican food desert Marks found when he moved to Australia almost two decades ago. How can an Aussie upstart possibly compete with massive global brands?

“We truly believe that our quality is better than anybody here in the US and we believe that the experience we deliver is second to none,” Marks says. “In Australia, because of the limited population, we’ve worked so hard … The number one priority is food quality and people that will never compromise. I think that’s been diluted a lot in the US. I think we bring that GYG energy, and our focus on food, people and service, that we can’t be beat in the US”.

Guzman y Gomez is now in Chicago as the company expands.

With a bell curve from Sydney, to Singapore, to Japan, to the US, are all roads leading to the United Kingdom?

“What’s great about Singapore, our chicken burrito is the number one product delivery throughout the whole country for three years in a row,” Marks begins, staying focused on both food and growth. “UK one day, Europe one day, but right now we’re really focused on Australasia and the United States.”

Guzman y Gomez was reported to have postponed listing on Australian Stock Exchange last year, what happened?

“We were never listing last year, we get that question all the time,” he says. “When it’s the right time to list, we’ll list. It could happen in the next few years, the business continues to get stronger, the stores continue to grow in revenue. The company’s very profitable and we’re actually in no rush.”

Guzman y Gomez has landed with a drive-through in the US in Chicago.

How did the company fill the void left by Magellan Financial Group selling off its 11 per cent stake last May?

“Before the listing,” Marks begins. “Most employees at GYG, especially at head office, own options. We want to make sure that they’re incentivised. So we do a liquidity event probably every year. And we were really fortunate last year to have Aware Super come in, which is obviously one of the largest super funds in Australia, so they’ve been our latest partner to join us on this amazing journey.”

Matt de Boer of the Giants takes a mark during the round three AFL match between the Greater Western Sydney Giants and the Gold Coast Suns. Picture: Getty

Matthew Dellavedova shoots a free throw during the round one NBL match between Sydney Kings and Melbourne United. Picture: Getty

Are any new Aussie sports stars bankrolling the expansion?

“Athletic Ventures came in about four years ago, they actually took part in this liquidity event as well. We have six of the highest-performing athletes in Australia that are shareholders,” Marks says. “And we ask nothing from that. I mean, they’ve come on board because they love the brand. That’s where they eat.”

Clean food is a moving target. Carbs can be good or bad, depending on who’s asked. Gluten has magical properties. Keto is the trend that keeps on trending. But does Guzman y Gomes use seed oils?

“We’re food people. That’s number one. Our first value at GYG is all about the food,” Marks says. “So no artificial flavours, colours, preservatives, unacceptable additives. That’s food. If you walk in right now, people are always blown away by the freshness of what we have. The thing to me, the Holy Grail, is how do you have people trade up, you know, from a Taco Bell?”

A number of Australian athletes have invested in Guzman Y Gomez through the investment syndicate Athletic Ventures. From Left to right: Steven Marks, GYG CEO & Founder; Matt De Boer AFL GWS Giants & Athletic Ventures Founder; Maddy Proud Super Netball, NSW Swifts; Lach Keefe AFL GWS Giants; Cam Murray NRL Rabbitohs; Cal Sinclair AFL Sydney Swans; Toby Greene AFL GWS Giants; Mike Hirshowiitz CFO & COO.

GYG energy. Celebrities. Growth. Investors. Liquidity. And, above all, food quality. Marks hits all the high notes without giving too much away, deftly sweeping away the odd googly, and always returning to the company’s value proposition.

All while his US team, about five in senior leadership and 150 across two current restaurants and the third planned to open in Crystal Lake, runs well-oiled system that Marks developed, with that Australian ingenuity, that put GYG on par with McDonald’s as the fastest fast food company in the business.

The result: 170 restaurants currently opened with plans for another 40 locations per year over 15 years. New York may soon join that ambitious list of 600 new locations. Making his mum his happiest customer. But Marks says he isn’t shopping around a pitch deck for US investors. Or eyeing an IPO listed on the New York Stock Exchange to return to Wall Street, where he cut his teeth at the hedge fund of infamous New York Mets owner, Steve Cohen.

“I’m shopping around burritos, bowls and nachos,” Marks laughs. “We were born in Australia, the listing probably would happen in Australia.”

Probably. At least until the Eskimo Stock Exchange rings its opening bell.