Guzman Y Gomez (GYG) is immediately closing its restaurants in Chicago and winding down operations in the US after its founder said the expansion would take more time and cost more money than expected.

Eight restaurants will close following the announcement.

The Mexican-inspired restaurant chain entered the US in 2020, following a $44 million investment from TDM Growth Partners. The investment also supported its ongoing operations in Singapore and Japan; GYG said it opened its 24th restaurant in Singapore this week.

“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,” Steven Marks, founder and Co-CEO of GYG, said.

This admission comes after a period of change atop GYG’s business. Global chief marketing officer Lara Thom resigned from the company in April, and the company announced in March that its co-CEO, Hilton Brett, would undergo a kidney transplant. 

“Having spent the last three months in the US, I realised this was going to take significantly more time and capital than we had expected,” Marks added. “In assessing the trajectory of the current network, the board and I have concluded that the business is unlikely to deliver the performance that would justify continued investment of shareholder capital.”

GYG maintains that its presence in Australia is in good standing; it continues to target 1000 restaurants, with 32 more openings planned this financial year.

In its latest fiscal quarter – ending March 31 – GYG recorded $345.9 million in revenue in Australia, a near-20 per cent increase year-on-year. Marks, however, did not close the door on future international projects.

“We are very proud of our international partners in Singapore and Japan and see substantial growth ahead in each market,” he said. “Beyond Singapore and Japan, we continue to believe there will be the right opportunities, in the right markets, with the right models. 

“When those opportunities arrive, we will be ready. Today’s decision is about the US specifically; it is not a statement about GYG’s global potential.”

At the time of its full-year financial results, GYG expects the US exit to result in a one-off loss between $42 million and $56 million, the company told the ASX.