An Australian fast-food chain that aimed to rival Chipotle in the United States has announced it is closing all its American locations after six years of operation. Guzman y Gomez, which had opened eight stores in the Chicago area, will cease trading in the US immediately.
Founder Cites Lack of Sales Momentum
Founder Steven Marks expressed confidence in the quality of the food and guest experience but acknowledged that these factors were not translating into improved sales. '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,' he said in a statement.
Expansion Plans Abandoned
The chain opened its first US store in January 2020 with ambitious plans to expand to 'hundreds, if not thousands' of locations nationwide. However, the sudden closure has dashed those dreams. Executives clarified that the decision pertains solely to the US market and does not affect the brand's operations in Australia, Singapore, or Japan, where it has around 267 locations.
'If you're ever in Australia, Singapore or Japan, come find us - we'll have your favs waiting for you,' the company wrote in a farewell statement.
Legal and Customer Backlash
Shortly after the announcement, former employees filed a class action lawsuit alleging that the company failed to provide the required 60 days' notice before mass layoffs. A company spokesperson said they are confident they have met all legal obligations.
Customers took to social media to share their lack of surprise. One Reddit user recounted a negative experience with a wrong order, while another described the food as 'terrible.' A third user commented, 'The Australian company masquerading as a Mexican restaurant couldn't make it in a country with 37 million Mexican Americans.'
Competitive Landscape
Guzman y Gomez faced stiff competition from established chains like Chipotle and Qdoba. Chipotle, with over 4,000 locations across 49 states, continues to innovate, recently introducing a High Protein Cup and Honey Chicken to cater to changing customer preferences.
