Franchise Marketing Case Study: Guzman y Gomez

Who doesn’t love Mexican food? There’s something special about treating yourself to a burrito, maybe a taco or even some traditional chips n salsa. While Mexican food carries with it a rich heritage; bringing over that culture into a new country and succeeding is a whole different story. However, this is precisely what Mexican fast food chain Guzman y Gomez (GyG) has accomplished over the years. It started as a casual Mexican taqueria in the streets of New Town in Sydney. Today, it is becoming one of Australia’s biggest culinary franchises. In this article, we’re talking all about franchise marketing as we highlight GyG’s success story in prime fashion.

Early Days…

After landing a job on New York’s Wall Street as a hedge fund manager, Steven Marks thought he had it all. A few years in with brief stints in New York and London, Marks wanted a fresh start and moved to Australia. Pursuing his love for Mexican food, Marks was able to see a visible gap in the Australian market. 

They didn’t know what good mexican food was in Australia. Most people thought black beans were olives.”

~Steven Marks

From then on, Marks decided to take matters into his own hands. The goal was not just to penetrate the fast food market, but to educate the Australian customers about good Mexican food. With a handful of staff and chefs from Mexico and Latin American restaurants, Marks knew something big is coming. Later, he invested his savings from his earlier career and set up the Mexican takeaway chain titled ‘Guzman y Gomez’, also known as ‘GyG’. Today, GyG has grown to be Australia’s fastest growing quick-service restaurant (QSR) chain. The ambitious food venture in Sydney, has opened in 130 national locations and globally in countries like Japan, Singapore and USA.

Branding & Marketing Success:

In a business landscape like Australia, labour costs are high and rent and food can be expensive. Building a brand here that people can love and resonate with is a sure-shot recipe for success. Secondly, GyG was marketed and sold with the idea of ‘using fresh ingredients with no preservatives or additives’. This, along with the inclusion of traditional Mexican and Latin American chefs helped curate an authentic menu for the restaurant. It wasn’t long before customers realised GyG is the real deal. 

Our strategy focused on educating customers by celebrating street food origins and positioning Guzman y Gomez as an authentic and contemporary Mexican cuisine authority.”

~Guzman y Gomez team

In a restaurant, the ambience and general ‘vibe’ of the place can make a significant difference in the overall customer experience. In GyG’s case, the following features helped strengthen its brand identity for customers:

  • Background Music: Traditional folk music that helped retain a strong cultural relationship with Mexican food.
  • Visuals and Lighting: Using professional photographers to document streets of Mexico and incorporate the images into the restaurant. Curated images helped customers connect better to the Mexican culture.

  • Menu and Packaging: Simple, street-style based writing and wrapping that drew inspiration from Mexican street vendors. Use of Spanish and English delivered authenticity and credibility for the brand with franchise marketing.

Keeping customers within the loop

Soon enough, customers began flocking towards GyG’s fast food chains seeking burritos, tacos, nachos and more. Marks set out to revolutionise the fast food industry in Australia, and was on the right track. However, the main challenge was keeping customers happy. Given the cutthroat nature of the fast food market, GyG was competing against big time companies. American franchise marketing giants such as Macca’s, Hungry Jacks and KFC, as well as local companies like Zambrero and Mad Mex.

GyG’s genuine concern and support for customers during COVID-19 helped the company maintained strong brand loyalty. GyG coordinated a free delivery campaign for its food with delivery agents like Uber Eats and Deliveroo. Certain food items such as Burritos and bowls were priced at a modest $9.90. GyG also introduced their mobile application to further increase customers’ ease of use.

Acknowledging the way in which COVID-19 affected customers, GyG’s unconditional support to its member base eventually strengthened its brand loyalty. From a Branding and Marketing stance, big success. The next step, was to succeed in franchise marketing.

Franchise Marketing Strategy:

A significant challenge in GyG’s journey was investor skepticism surrounding fast food stocks. Rising regulatory concerns about franchising made the process difficult for the brand when it came to franchise marketing. Marks knew that the key to success was to stand out from all of the other fast food chains. To kick things off, Marks decided to concentrate the brand’s focus in Sydney, before expanding to other areas.

“A lot of entrepreneurs make the mistake of going wide and spreading their business too thinly. I was obsessed with making people love the brand.”

~Steven Marks

GyG was set up in certain, high end, ‘Triple A real estate’ areas of Sydney. This helped established a strong following in the area, and soon attracted the attention of investors. Marks knew that it was important to work with investors who shared his vision. Business owners and franchisees having the same vision was crucial in order for GyG’s franchises to succeed. GyG also embraced a certain degree of independence passed down to business owners, a key to effective franchise marketing. Secondly, franchise owners were given independence of small business ownership, along with a large business network. Franchise marketing support, existing brand awareness, and established systems in place to utilise further aided the local owners.

Maintaining brand values

A strong system of training and operation helps retain the brand’s core values, to prepare fresh and nutritious fast food without compromising on quality. GyG was successfully reflecting its goal of spreading Latin American culture and heritage across Australia with each franchise. Local marketing attempts designed to appeal to certain customer segments helped settle into the various locations. For example, including drive-thru restaurants in specific surburban areas with high customer traffic resulted in higher sales during peak hours.

This mentality also helped GyG penetrate into the American market. Secondly, established, incumbent Mexican food chains in the U.S such as Chipotle and Taco Bell made it difficult initially. However, by capitalising on high quality food and customer service, GyG would deliver a unique customer experience to set itself apart. GyG stood strong and saw visible growth in its customer base, in Australia as well as in USA.

Final thoughts:

Franchise Marketing can be a challenging, yet rewarding business experience. By embracing its core brand values, building a strong customer base and spreading gradually across various locations, GyG was able to establish strong authority in the Australian market. With new locations opening up within Australia, as well as internationally, it doesn’t seem like Marks and his Mexican taquiera are slowing down anytime soon.

How did Guzman y Gomez start building their brand?

GyG founder Steven Marks knew that he would be competing against fast food chains like Macca’s, Hungry Jacks, KFC and Zambrero. The best way to stand out in the Australian market, was to market themselves to be inherently different than all the other brands. GyG primed itself to use natural ingredients, prepared in a healthy way so that fast food can be nutritious as well. Marks hired experienced chefs from Mexico and Latin American restaurants for extra authenticity. The goal was to educate the Australian market on what true Mexican cuisine is, which is what GyG focused on during the initial days.

What makes GyG different from other brands?

Marks wanted to make the restaurant chain as authentic and close to Mexico as possible. Apart from hiring the best Mexican food chefs, Marks incorporated multiple ways of reinforcing Mexican culture and heritage. Restaurants were themed like the street food alleys of Mexico with photographs of the local areas. Latin American folk music, packaging, menu designs and ambience helped customers get a better sense of Mexican cuisine.

GyG also showed support for customers during COVID-19, by providing food for a discounted rate with no overhead costs.

How did GyG become a franchise marketing success?

GyG started slow and steady, with the goal of building a strong customer base before expanding outwards. Marks concentrated franchises and growth in Sydney, and visibly saw GyG’s brand identity grow. Thereafter, GyG opened up in multiple locations, without compromising on the brand’s core values. Franchise owners were given independence and autonomy as long as GyG’s brand identity is maintained. This incentivised local business owners to invest time, money and effort into the franchise as they had ample control.

GyG used the same strategy to expand internationally and penetrate into the American and Japanese markets. By focusing on their strengths and adapting to changes, GyG has established itself as a successful franchise marketing business.

In case you missed it, check out our in-depth case study on Afterpay and secret to their success here.

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