Steven Marks, pictured in the middle, is a multi-millionaire from the popular franchise. Photo / Supplied
Steven Marks, pictured in the middle, is a multi-millionaire from the popular franchise. Photo / Supplied
A single fast food store that began in a trendy Sydney suburb has led to a company that is set to reach unicorn status the year after next.
Popular Mexican restaurant franchise Guzman Y Gomez is projected to hit an eye-watering $1 billion in revenue by 2025.
The first Guzman Y Gomez store, referred to as GYG or Guzman by Aussie fans, opened up in Newtown, in Sydney’s inner west, in 2006.
Since then, it has expanded nationally and even globally, with more than 180 restaurants across Australia, the US, Singapore and Japan.
Steven Marks, who cofounded GYG alongside fellow New Yorker Robert Hazan, admitted the journey hasn’t been an easy one, with it taking two years before the business even broke even.
The chief executive couldn’t even afford to pay himself a salary until five years after he opened the first store.
“The Newtown store wasn’t doing well, I thought ‘we’ve go to look like we’re doing better,’ so we opened up (a store in) Bondi Junction, it wasn’t doing well,” Marks told news.com.au.
The company used to have a replica Mexican taxi that would take guests to the nearest GYG store. Pictured in the centre is Steven Marks. Photo / Supplied
The now 50-year-old then opened up a Kings Cross store but that wasn’t performing well either.
But one-day things reached a turning point because “they were starting to lose less and less money”, he said.
Fast forward 17 years and GYG has made over AUD$500 million ($546 million) in revenue and this year is expected to exceed AUD$700 million ($767 million).
Raised by a single mum with two other siblings including his twin brother and with a father incommunicado due to various addiction problems, Marks said he had always been an entrepreneur at heart.
His first job involved shovelling driveways and he also sold T-shirts.
He went to university and got a job on Wall Street working for a hedge fund. This job eventually brought him to London.
“In New York back then, there weren’t any Australians,” he said.
“Moving to London was the first time I met Australians, they kept showing pictures from Bondi Beach.”
On a whim, and done with his time on Wall Street, Marks booked a one-way ticket to Sydney with plans to open a hotel in the beachside suburb he’d heard so much about.
“When I got here I didn’t realise how over-governed things were. I didn’t get the hotel off the ground,” he said.
The company is on track to hit $1 billion in revenue in two years’ time. Photo / Supplied
He tried all kinds of things, including a fashion business, a record label and a bar in Paddington but nothing took off.
Ever the entrepreneur, the New Yorker, who has since become an Australian citizen, discovered a gap in the market due to the small number of Mexican restaurants available.
He flew a chef over from Mexico and things went from there.
Marks poured millions, all the money he had made in his financial job, into the venture.
“I was all-in, I was lucky I did well in Wall St to fund this. It was millions.”
But the big problem, he found, was Australians didn’t really have an appetite for Mexican food.
“I over-estimated how long it would take to educate people on Mexican. We worked harder, made sure the food was presented better. Whenever we opened a restaurant we gave out free burritos.”
A humourous exchange with his brother two years into the business still sticks in his mind.
“At one point, we had four stores, they all broke even, my twin goes ‘aren’t you supposed to make money’?” he recalled with a laugh, adding that at times it was “a painful journey”.
The dad-of-two acknowledged: “There were scary times when you’re about to run out of money but we never compromised”.
Despite the Covid-19 pandemic and the cost of living crisis, Guzman Y Gomez continues to expand as punters flock to its stores to buy low-priced Mexican cuisine.
GYG plans to launch at least 30 new restaurants this year.
GYG is one of Australia’s biggest buyers of avocado to make their guacamole. Photo / Supplied
In fact, during the many lockdowns across Australia beginning in March 2020, GYG didn’t qualify for JobKeeper as they were making too much money.
They even reduced the price of their food during lockdowns, selling AUD$9.90 burrito and bowls when the actual price was AUD$12.90 prior to the pandemic, to make their brand more affordable for pandemic-stricken Aussies.
“Last year we went through 8.5 million avocados, we’re the largest buyer (of avocados) outside of supermarkets,” Marks said.
GYG sold over 27 million burritos and bowls last year.
A burrito is rolled every two seconds across their stores on average while more than 700,000 people eat at a GYG restaurant every week.
They sold 23 million servings of guacamole last year.
