GYG Targets 40+ New Australian Restaurants, Margin Up 3.3 Points Since FY20

A Clear Vision for Growth

At the 2025 Macquarie Australia Conference, Guzman y Gomez Limited (GYG) laid out a comprehensive growth strategy that balances aggressive expansion with operational discipline. Central to this plan is the goal of opening more than 40 new restaurants annually in Australia, a significant step up from recent years. This expansion is underpinned by a robust real estate pipeline, with a strong preference for drive-thru locations, which are expected to make up 85% of new sites.

The company’s approach is methodical, prioritising high-quality locations and operational excellence over rapid, unchecked growth. This strategy aims to sustain long-term profitability and brand integrity, ensuring that new openings contribute positively to the network’s overall performance.

Franchise Model and Ownership Dynamics

GYG’s franchise partnerships remain a cornerstone of its business model, with franchise restaurants projected to generate around two-thirds of network sales by FY26. The ownership split is expected to settle at approximately 60% franchise and 40% corporate-owned restaurants. This balance reflects an operational decision designed to optimise individual restaurant performance and network efficiency.

The company emphasises transparency, fairness, and franchisee profitability as key pillars of its franchising philosophy, which supports strong brand alignment and shared value creation. This approach is intended to foster a sustainable and mutually beneficial relationship between GYG and its franchise partners.

Margin Expansion Through Operational Excellence

GYG is focused on driving restaurant margin expansion by leveraging comparable sales growth and operational improvements. The company targets a cost of goods sold (COGS) ratio of around 30%, maintaining uncompromised food quality while working closely with suppliers to manage costs. Labour productivity is enhanced through world-class training and systems, with investments in learning and development aimed at improving crew retention and efficiency.

New restaurants typically experience a 3-6 month ramp-up period before reaching steady-state margins, but the median network drive-thru restaurant margin in Australia has already expanded from 18.6% in FY20 to 21.8% in the first half of FY25. This margin growth is supported by a 2.3x increase in average unit volumes over the same period, underscoring the effectiveness of GYG’s volume-first, price-last sales strategy.

US Market Progress and Infrastructure Investment

GYG’s US expansion remains a key focus, with board approval for 15 restaurants and openings planned in locations such as Des Plaines and Bucktown in the first half of FY26. The company continues to invest deliberately in labour and guest experience to build the brand and improve sales volumes, targeting US$3 million average unit volumes to achieve margins comparable to Australia.

On the corporate side, GYG has built a General & Administrative (G&A) infrastructure designed for scale, investing five years ahead to capture operating leverage. This infrastructure supports real estate, technology, human resources, and supply chain platforms, positioning the company well for sustained growth and cost management despite expected inflationary pressures.

Guidance and Outlook

Importantly, GYG reaffirmed its FY25 guidance, expecting to exceed its NPAT prospectus forecast. The company’s confidence is grounded in the multiple growth levers it has in place, including new restaurant openings, comp sales growth, franchise partnerships, and margin expansion. The strategic focus on drive-thru sites and a balanced ownership mix further supports this outlook.

Overall, GYG’s presentation paints a picture of a company poised for sustained growth, leveraging operational excellence and strategic investments to deliver shareholder value in a competitive fast-food landscape.