Guzman y Gomez scores $44 million investment to grow to 500 stores in Australia and launch in the US
Tuesday, August 14, 2018/
Local Mexican fast-food chain Guzman y Gomez has secured a whopping $44 million investment from local investment firm TDM Growth Partners as the company plans its US expansion and an eventual stock exchange listing.
Founded 12 years ago back in 2006, Guzman y Gomez is Australia’s largest Mexican fast food franchise, headed up by founder and global chief executive Steven Marks. The company has experienced significant growth in recent year; it now boasts $200 million in annual turnover, up from $150 million in 2016, with revenue increasing 30% year-on-year.
The company began its search for investment around six months ago, calling on local funds to back the business so it could continue to roll out restaurants across Australia, as well as growing into US markets.
Speaking to SmartCompany, Marks says he first realised the company would need additional investment back in October 2017 when it was gearing up to celebrate the anniversary of opening its first store 12 years earlier.
“It’s been an incredible amount of hard work, and for it to pay off and for us to have a shot at being the best restaurant company in the world, I knew I would need a partner,” he says.
After an “extensive” search, the company settled on TDM, an established investment firm with a strong track record of investments, including Baby Bunting, LogMeIn and Aconex.
“They’re the best investment team in the country, and they’re so aligned in our vision. They’re awesome people and customers of ours, so we were keen to have them come in to support us,” Marks says.
The $44 million investment is a sizeable one, and the sort of investment which is rarely reported with such level of specificity. Marks says the reason for being so public about the deal is a testament to Guzman y Gomez’ culture of transparency, saying “they asked for the number and I gave them the number”.
“We wanted people to know this is a meaningful investment for TDM and they’re serious about building this business with us,” he says.
In a statement, Tom Cowan, partner at TDM Growth Partners, said the company is “immensely proud” to be joining Guzman y Gomez on its next stage of growth.
“We are incredibly impressed by the quality of both the management team and the board of directors. We love the passion they have for their business, and importantly, their focus on culture — a value that is at our core,” he said.
“We believe people and culture are critical to driving a competitive advantage, and [Guzman y Gomez] has fostered this from day one.”
IPO on the cards
Marks’ plans to continue building Guzman y Gomez will entail huge growth both locally and abroad, with the fast-food company looking to grow its 117 Australian stores to 500, and open its first US store in Chicago in the first few months of 2019.
These roll-outs will be aided by the company’s recently established drive-through model, which New York-bred Marks thinks will thrive in the US.
“Once we started opening up our drive-throughs, a lightbulb went off. We want to reinvent fast food in the states, and though people say there’s a lot of competition and a lot of Mexican, there are a lot of people there, and lots of people supports mediocrity,” he says.
“The Guzman y Gomez brand will be a contender at the forefront of fast food in the US once we start opening up our drive-throughs thanks to the power and capacity of our kitchens.”
Asked if an ASX-listing is on the cards for Guzman y Gomez, Marks says he’s both a former hedge fund manager and a “crazy fucking guy”, and confirmed the company would look to undertake an initial public offering in the future.
“I was always my dream as a kid to list something, so we’re looking to IPO Guzman y Gomez at some point, mainly because I want the public to have a chance to own a piece of something they love,” he says.
But right now, Marks says it’s all about getting back to work.
“You go through these investment phases and it takes a lot of energy, so now it’s about getting back to work,” he says.
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