Guzman y Gomez co-founder builds $180m fortune as Mexican fast-food chain lists in Australia
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Guzman y Gomez has 185 restaurants in Australia, 17 in Singapore, five in Japan, and four in the US.
PHOTO: REUTERS
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Wellington – When Mr Steven Marks moved to Australia in the early 2000s, he was struck by the quality of Mexican food. It was, in his opinion, dismal. The American, a veteran of US hedge fund SAC Capital and later Cheyne Capital in London, was so appalled with the burritos and tacos that he resolved to start his own restaurant.
In 2006, Mr Marks and childhood friend Robert Hazan opened the first Guzman y Gomez (GYG) in Newtown, a suburb in Sydney’s inner west. Eighteen years later, GYG has 185 restaurants in Australia, 17 in Singapore, five in Japan and four in the US, boasting network sales of A$759 million in 2024.
GYG shares began trading on June 20 on the Australian Securities Exchange with a valuation of A$2.2 billion (S$2 billion). With a stake worth more than A$200 million (S$180.5 million), Mr Marks, 52, is the second-biggest shareholder after investment firm TDM Growth Partners, according to the Bloomberg Billionaires Index.
The shares closed up 36 per cent at A$30 – an upbeat signal about investor sentiment following the country’s biggest initial public offering (IPO) in a year.
It was the biggest first-day gain by a large Australian company since 2021 and the country’s third-best performing IPO in five years, according to Dealogic.
Taking on McDonald’s
GYG’s offering will raise A$335.1 million, with A$200 million to fund expansion plans and the rest going to existing shareholders. GYG wants to eventually grow to 1,000 restaurants in Australia, about the same number as McDonald’s, and plans to open 30 to 40 new joints each year.
That did not deter Mr Guy Russo, the former chief executive officer of McDonald’s Australia, from investing in 2009. He is now GYG’s chairman and owns a stake worth more than A$140 million, according to the wealth index. His son, Mr Gaetano Russo Jr, is the franchise owner of three GYG restaurants.
It is not the only family connection: The son of GYG’s co-chief executive Hilton Brett has also entered into a letter of intent to become the franchisee of a restaurant later in 2024.
Mr Brett was appointed last October, after the company indicated Mr Marks would be stepping down as CEO due to a health scare that turned out to be minor. The resignation never happened.
GYG’s A$2.2 billion valuation works out to A$10.6 million per restaurant. By comparison, Chipotle Mexican Grill, a staple of the US fast-casual restaurant scene, is valued at more than A$40 million per store, according to data compiled by Bloomberg.
The initial issue was closed to the public, and largely involved selling shares to existing financiers and franchise owners.
Analysts at Morningstar are cautious on the company’s valuation, saying the company with 3.5 per cent of the country’s fast-food market had not established a competitive advantage which would justify its rapid expansion. They estimate shares are worth A$15 each, 32 per cent lower than GYG’s offer price.
On a statutory basis, GYG lost A$2.3 million in 2023 and projected a further A$16.2 million loss for 2024 before a profit in 2025. BLOOMBERG
