1. The Bottom Line: What Happened to GYG

Guzman y Gomez shut down all of its Chicagoland restaurants on the night of May 21, 2026, with no advance notice to customers or staff. The following morning, May 22, the company confirmed the decision publicly: GYG was permanently leaving the United States after six years of operating in the Chicago market.

Founder and co-CEO Steven Marks made the call after spending three months in the US assessing the business firsthand. His conclusion was that turning the US operation around would require substantially more time and capital than the company was prepared to invest. The closures were immediate, and a lawsuit followed within days.

Within days of the announcement, outlets including Fox Business and NBC Chicago were covering not just the closure but a growing legal dispute over how it was carried out. Former employees filed a federal class action alleging violations of the federal and Illinois WARN Acts for failing to provide legally required advance notice of the mass layoff.

2. Who Is Guzman y Gomez?

GYG was founded in Sydney, Australia, in 2006 by Steven Marks, a native New Yorker who wanted to bring the bold, fresh Mexican food he grew up with to a country that had little exposure to it at the time. The chain grew steadily across Australia and expanded into Singapore and Japan, building a network of more than 250 locations.

The brand built its identity around cleaner ingredients: no artificial flavors, no added colors, and no preservatives. That message resonated well in Australia and helped GYG attract a loyal following. The company listed on the Australian Securities Exchange (ASX) in 2024, drawing considerable investor attention as a fast-growing restaurant chain with an established track record in its home market.

In 2020, GYG entered the United States, opening its first American location in Naperville, Illinois. Over the following six years, it expanded to eight Chicagoland locations, including Evanston, Schaumburg, Buffalo Grove, Crystal Lake, Deerfield, Des Plaines, and a recently opened spot in Chicago’s Bucktown neighborhood. The stated ambition was to eventually open hundreds of US locations and establish GYG as a credible alternative to Chipotle.

3. Why Guzman y Gomez Struggled in America

Several overlapping factors explain why GYG was unable to build the momentum it needed in the US, despite a strong overseas track record.

Sales Did Not Follow the Brand

CEO Marks was direct in his public statement on the exit: “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.” Customer feedback on the food tended to be positive, but consistent foot traffic and repeat visits were not growing at the pace the business required.

Competing Against a Deeply Entrenched Rival

Chipotle operates roughly 4,000 restaurants across the United States and has spent more than two decades building brand recognition and customer loyalty in the fast casual Mexican category. For a newer entrant like GYG, breaking through that kind of established presence requires both a compelling point of difference and the marketing budget to make it visible. GYG faced real difficulty communicating why an American consumer should try it instead of the chain they already knew.

Strategic Missteps on the Ground

Marks himself acknowledged that some early decisions did not work in the company’s favor. He specifically pointed to the choice of Chicago as the launch market and an over-reliance on drive-through locations as contributing factors. Chicago’s harsh winters are not ideal for a burrito chain trying to build suburban drive-through volume, and the format added operational complexity without delivering the sales results needed to justify it.

The Math on Capital Did Not Work Out

GYG’s board ultimately concluded that continued US investment was unlikely to deliver returns that would justify deploying shareholder capital at the scale required. The company expects the exit to result in a one-time financial impact of between US$30 million and US$40 million in its 2026 full-year results, with the cash component not expected to exceed US$15 million. Meanwhile, GYG’s Australian business is performing well, with 237 locations currently open and a long-term domestic target of 1,000. Redirecting focus to where the company already wins made clear financial sense. Investors agreed: GYG shares rose more than 20% on the ASX on the day the US exit was confirmed.

4. The Lawsuit: Alleged WARN Act Violations

The closure itself drew wide coverage. The manner in which it was carried out turned it into a legal dispute.

On the evening of May 21, 2026, workers at GYG’s Chicagoland locations received a message through an internal company platform stating that the restaurants would not reopen the following day. There was no formal written notice. No advance warning. By the morning of May 22, all eight US locations had ceased operations permanently.

The federal Worker Adjustment and Retraining Notification Act, commonly known as the WARN Act, and the parallel Illinois WARN Act require employers meeting certain size thresholds to provide at least 60 days written notice before a mass layoff or facility closure. The lawsuit filed against GYG alleges the company did not comply with either requirement.

On Sunday, May 24, two former employees filed a class action complaint in the United States District Court for the Northern District of Illinois. The lead plaintiffs are Monica Martinez, who worked at the Evanston location, and Yomira Gomez, a shift leader at the Des Plaines location. The complaint, filed by Chicago attorney Syed Hussein, alleges violations of the federal and Illinois WARN Acts and estimates that more than 500 workers may have been affected by the abrupt closures. The plaintiffs are seeking 60 days of back wages and benefits for all class members, as well as maximum civil penalties permitted under the applicable statutes.

According to court documents, one of the plaintiffs first learned of the closure through a leaked internal company message rather than any official communication. “There was no notice. It happened Thursday night and all operations were closed by Friday morning,” Yomira Gomez stated in remarks reported by local outlets. Protests by former workers and their families were reported near closed GYG locations in Evanston and surrounding suburbs over the weekend.

5. What This Means for Diners, Workers, and the Industry

If You Were a GYG Customer

All US locations are permanently closed with no plans to reopen. The GYG US website posted a farewell statement that read in part: “After six years of burritos and big dreams in Chicagoland, we’ve made the difficult decision to close our US restaurants.” The chain continues to operate in Australia, Singapore, and Japan, so if you find yourself in one of those markets, the menu is still available.

If You Were a GYG Employee

A class action lawsuit is actively proceeding in the Northern District of Illinois on behalf of workers who were terminated without the required advance notice. If you worked at a GYG location in the Chicagoland area, consider consulting an employment attorney to understand whether you may be eligible to participate in the class. Court filings are publicly available through the federal court’s PACER system.

A Broader Lesson for the Restaurant Industry

GYG’s US exit is a concrete example of how difficult it is for even well-funded, internationally successful brands to break into the American fast casual market from scratch. Building consumer awareness in a country where you have no existing recognition requires sustained investment over years, and competing in a category where Chipotle has near-total dominance raises the bar further. For any international restaurant brand considering a US entry, GYG’s experience is a useful data point on the real costs involved.

For workers in the restaurant industry, this case is also a reminder that US labor law does provide meaningful protections when mass layoffs occur. The WARN Act exists precisely for situations like this one, and the pending lawsuit shows that those protections can be enforced even when the employer is a foreign-listed company.

6. Summary

Guzman y Gomez set out to do something ambitious: build a fast casual Mexican brand in America capable of standing alongside Chipotle. The product earned genuine praise. But the financial and competitive realities of the US market proved too steep to justify continued investment at this point in the company’s growth. The decision to exit and refocus on Australia is a pragmatic one, and the market has rewarded it.

What remains unresolved is the question of how the exit was handled. The pending class action will determine whether GYG owes its former US employees compensation for the advance notice they allege they never received. That outcome may have implications beyond this case, for how other global brands manage their obligations to local workforces when they decide to leave the US market.

Sources & Further Reading

• Fox Business: Chipotle Rival GYG Closes All US Restaurants
• NBC Chicago: Guzman y Gomez to Close All Chicagoland Restaurants

About

This article was published by Roa — Roasted Almond North America, a blog covering food culture, restaurant industry news, and everyday North American dining. All information is sourced from publicly reported news and reflects events as of May 25, 2026.