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Fans of the Mexican casual food chain Guzman y Gomez were surprised to learn last week that the Australia-based competitor to Chipotle Mexican Grill had abruptly closed all of its U.S. locations.<\/p>\n
And the chain\u2019s customers weren\u2019t the only ones surprised by the news. Now, some of its former employees are suing the company over the unexpected closures. Here\u2019s what you need to know.<\/p>\n
On May 21, Guzman y Gomez, a chain of Mexican fast-casual restaurants based in Australia, abruptly announced that it was closing all of its U.S. locations.<\/p>\n
According to the company\u2019s Australian website<\/a>, Guzman y Gomez was founded in Sydney in 2006 with the aim of bringing more authentic Mexican cuisine to Australia. <\/p>\n Since then, the company has expanded into other countries in the Asia-Pacific region, including Singapore and Japan. It now has over 260 restaurants globally.<\/p>\n Until recently, those restaurants included some in America. But as of May 22, the chain’s U.S. locations have now shuttered. <\/p>\n A visit to the company\u2019s U.S. website states<\/a> that \u201cEffective from May 22nd, GYG USA restaurants will cease trading.\u201d<\/p>\n \u201cAfter six years of burritos and big dreams in Chicagoland, we’ve made the difficult decision to close our US restaurants,\u201d the website reads. \u201cTo every guest who came through our doors – you chose us, and we never took that for granted. To our team – thank you. Your passion and your purpose built something special.\u201d<\/p>\n Fast Company<\/em> has reached out to Guzman y Gomez for comment.<\/p>\n While the company\u2019s website no longer lists the chain\u2019s former U.S. locations, the Chicago Tribune<\/em> reports that the first Guzman y Gomez store in the U.S. opened in Naperville, Illinois, in 2020. <\/p>\n The chain then opened another seven stores in the state, where all its U.S. locations were based.<\/p>\n Guzman y Gomez\u2019s eight U.S. locations were in the following cities:<\/p>\n Additionally, the Chicago Tribune<\/em> reported<\/a> that Guzman y Gomez had planned to open three more locations in Illinois in 2026, but those plans have been abandoned following the company\u2019s exit from the U.S. market.<\/p>\n It is notoriously hard for international food chains to operate in the U.S. market. Not only is the American marketplace crowded with U.S.-based rivals, but in recent years, even U.S.-based chains have struggled with declining foot traffic and rising costs as inflationary pressure bites consumers and businesses alike.<\/p>\n Mexican restaurants and fast food chains are also abundant in America, unlike in other parts of the world where Guzman y Gomez operates. <\/p>\n This means that Guzman y Gomez already had an uphill battle in a country where, for instance, Chipotle Mexican Grill already dominates, with more than 4,000 locations.<\/p>\n On May 21, Guzman y Gomez\u2019s co-CEO, Steven Marks, explained the abrupt U.S. pullout on a call with investors, telling them that the chain\u2019s poor U.S. sales didn\u2019t justify keeping the stores open any longer.<\/p>\n \u201cThis means ceasing to trade at our restaurants from today and proceeding with an orderly wind up of our operations in the U.S.,\u201d the Tribune<\/em> quoted Marks as saying \u201cNotwithstanding the progress made by the team, the financial performance of the U.S. has simply not been acceptable.\u201d<\/p>\n He added: \u201cStarting with suburban drive-thrus has made it difficult to build brands in the U.S. Chicago has also been difficult. What is important is that we make changes when we need to.\u201d<\/p>\nWhich Guzman y Gomez locations have closed?<\/h2>\n
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Why did Guzman y Gomez close its US stores?<\/h2>\n
How have Guzman y Gomez\u2019s employees responded?<\/h2>\n