Fast-growing Mexican food chain Guzman y Gomez (ASX: GYG) is set to accelerate its expansion strategy by opening 12 new stores in the final quarter of 2025, accounting for 40 percent of its new store openings for the financial year. These 12 locations will be spread across Victoria, New South Wales, Queensland, and the Australian Capital Territory (ACT), underscoring the company’s commitment to strengthening its presence across Australia.
Despite facing challenges in the stock market, with GYG shares currently 56 percent below February levels, the Sydney-based company remains optimistic. Its net profit after tax (NPAT) stands at just over 1 percent of the company’s record $1.2 billion in network sales for FY25. However, Guzman y Gomez is confident in its growth trajectory, with plans for 32 store openings in FY26. The company intends to achieve these ambitious targets through a mix of corporate-run stores and franchises.
Expansion Plans and Franchise Growth
Of the 12 new locations scheduled for opening between October and December, five will be directly managed by the company, while seven will be franchised. This marks an important milestone for GYG as it welcomes five new franchisees into its network, continuing its strong franchise business model.
This expansion follows a similar pace seen in 2024, where 11 new locations were opened in the last quarter of the year. GYG aims for a consistent rhythm of 40 new store openings annually as it strives to reach 1,000 locations in the long term. Currently, the company has more than 250 stores across Australia.
“We are committed to building a long-term, sustainable restaurant business with real food, high volumes, and strong unit economics,” said Steven Marks, co-founder and CEO of GYG. “These new openings showcase the strength of our model and the confidence of our franchise partners.”
Franchise Model and Employment Growth
Guzman y Gomez’s franchise model has proven successful, with franchisees achieving a median return on investment (ROI) of 50 percent, positioning the brand as one of the most profitable opportunities in the food and hospitality sector. The new store openings will not only expand GYG’s reach but will also create approximately 750 new jobs, contributing to both employment and small business growth across Australia.
Among the new franchisee teams, three have come through GYG’s internal pathway, while two represent further expansion by existing franchisees, reinforcing the company’s deepening network of successful partners.
Market Performance and Stock Outlook
Despite the recent dip in stock price, GYG’s shares have shown a slight recovery, up by 2.57 percent this morning to $25.54. This is still far below the levels seen in April, when shares were trading above $45, and the pricing around $29 before the company released its annual results last month. Nevertheless, the company’s expansion plans and franchise success signal long-term growth potential, which may positively impact its stock performance moving forward.
