brand’s rapid growth in its homeland and expansion into Japan and Singapore. The pitch was irresistible, the execution was not. What unfolded in the months that followed was a masterclass in the perils of founder-led optimism outpacing market reality and a cautionary tale about the structural impossibilities of entering the world’s most competitive fast-food market without the balance sheet to sustain a war of attrition. The American dream Steven Marks, the exuberant New York-born co-CEO who founded GyG, was never shy about his ambitions. The US represented a AU$400 billion fast-food market, and Marks spoke about it with the evangelical fervour of a convert. The chicken was “incredible”. The suppliers were “exceptional”. New menu items gave him a genuine “high”. The US, in Marks’ framing, was not a gamble – it was an inevitability. The Chipotle comparison, while flattering, was always analytically fraught. Chipotle is a AU$60 billion juggernaut with decades of brand equity, a coast-to-coast supply chain and the marketing firepower to outspend any challenger before it serves its first bowl of guac. GyG, by contrast, was a scrappy Australian chain with eight stores clustered across suburban Chicago – locations that, in hindsight, compounded the brand-awareness problem rather than solving it. As Marks himself would later concede, the first few stores were an hour apart, and American diners were simply not prepared to travel that far for a brand they barely knew. As recently as February 2026, at GyG’s half-year results, Marks was still pushing back against analyst scepticism. “It’s taken a little longer than I hoped, but we are exactly in the spot we want to be in the US to grow,” he told the room. The market, unconvinced, had been quietly pricing in the probability of failure for months. The great retreat The white flag came swiftly. On 22 May 2026, GyG announced the immediate closure of all US stores, a decision that sent the share price rocketing as much as 19 per cent as relieved investors essentially celebrated the end of a money pit. RBC analyst Michael Toner had projected the US business would not break even until 2037. The market had long since stopped believing in the Chicago experiment; it had simply been waiting for management to catch up. Chief financial officer Erik Du Plessis framed the decision in the clinical language of capital allocation. “It’s not just because of the performance this quarter, it’s more about the projections and the capital that we would need to invest,” he said. Translation: even if the food was good, the unit economics were irredeemably broken, and throwing more capital at the problem was a luxury GyG’s balance sheet could not afford. The financial carnage is not trivial. GyG expects to recognise a one-off profit and loss impact of between US$30 million and US$56 million in its fiscal 2026 results – a significant blow for a company that booked only AU$10 million in net profit in the first half of the year. The cash component of exit costs, capped at US$15 million, covers lease liabilities, employee redundancies and contractual commitments. The dividend, management has insisted, will survive intact. Whether that promise survives the full audit review remains to be seen. There is a certain irony in the retreat. Marks spent three months living in Chicago, personally working out of GyG’s struggling stores in a display of founder commitment that impressed almost no one and alarmed some analysts, who worried about the neglect of GyG’s genuinely profitable Australian core. Proximity to the problem did not translate into a solution. The class action The closure also left a legal reckoning in its wake. A class action filed in a US federal court in Illinois by Chicago firm Haseeb Legal alleges that GyG violated federal and state WARN Act obligations by failing to provide 60 days’ advance written notice before conducting a mass layoff. Workers claim they first learned of the closures on 21 May via an internal message on the company’s communication platform. The message was blunt: “After careful consideration, we have made the difficult decision to exit the US market. This means we will be closing all our restaurants from today.” The class action, which names more than 500 affected employees and seeks pay and benefits equivalent to 60 days’ compensation, argues that GyG’s US entity and its Australian parent constituted a “single integrated enterprise” – a legal framing that, if accepted, would significantly broaden the liability exposure for the ASX-listed group. Two named plaintiffs, both former shift leaders earning between AU$21 and AU$23 an hour, allege they received neither notice nor required compensation. GyG has stated it is “confident we have met all of our legal obligations to our US employees”. What comes next? Analysts have taken to describing the US as a “graveyard” for Australian fast-food ambition, a characterisation born out by the earlier failures of Crust Pizza and Oporto. The structural challenges are not mysterious: American consumers have strong fast-casual loyalties, established brands have near-insurmountable scale advantages, and suburban Chicago is an unforgiving launchpad for an unknown foreign brand selling what locals may perceive as a diluted version of a cuisine they already have in abundance. The genuine irony is that GyG’s Australian business is performing well. The company expects to deliver the Australian segment’s underlying EBITDA of approximately AU$85 million in fiscal 2026 – 29 per cent growth on the prior year – and remains on track to open 32 restaurants this financial year, with a long-term target of 1,000 Australian stores. The US distraction, in retrospect, diverted management bandwidth and capital from a compounding domestic growth story. There is one unresolved subplot worth watching. When Chipotle opens stores in Singapore this year, a market where GyG already operates 24 locations, the two chains will finally compete on genuinely neutral ground. “I’m very confident for Chipotle to come into other markets where GyG is, and for us to outperform it,” Marks said on the day of the US closure announcement. After Chicago, he may be forgiven if investors treat that forecast with a degree of scrutiny. Further reading: Inside Guzman y Gomez’s plan to reach $500 million in revenue