Australian chain immediately closes all US outlets; Faces class action
Listed Australian-based Mexican food chain Guzman y Gomez (GYG) has announced the immediate closure of all its outlets in the United States at an estimated cost of USD$40 million in addition to existing losses, according to a media report.
In an announcement to the Australian Stock Exchange (ASX), the company explained the US expansion would take considerable more money and time than anticipated, praised their staff for their “passion, professionalism and conviction to bring GYG to a new market”, and pledged to support every member of the US team through the transition. Around 300 US workers have lost their jobs due to the closures, with a class action by workers launched just two days after the closure claiming that a 60-day minimum notice of redundancies was not provided (see separate story below).
GYG opened its first store in the US in Chicago in 2020, prior to its listing on the ASX in 2024. Since 2020, GYG has invested at least $115 million into its failed US expansion, with its Australian business subsidising US losses. After initially targeting 15 stores in the US market, GYG opened eight before exiting the market, with analysts predicting it would be 2037 before GYG would break even in the US.
Shares in GYG rose after the announcement that it would close its US operations, which is estimated to cost up to USD$40 million. The company says it will now focus on expanding its footprint in Australia where it operates 242 stores with another 32 to open before the end of FY26, and a long-term target of 1,000 stores. It also operates in Japan and Singapore, where it has five and 24 stores, respectively, and expects further growth.
GYG listed on the ASX in June 2024 at $22, and peaked at $45.99 less than six months later, but its share price has been in decline since as lower than expected local sales and higher than expected losses for its US operations resulted in missed estimates for FY25. In the 12 months prior to the company’s announcement, GYG’s share price fell more than 40%, which rose to $21.80 by the end of trading on the day of the announcement, which remained lower than its 2024 list price. Read more 1; Read more 2; Read more 3; Read more 4; Read more 5
Coffee chain CEO fired for marketing blunder
The chief executive officer of Starbucks Korea has been fired over a marketing promotion which was perceived as inappropriately referencing a bloody incident in the country’s history, and which was launched on the anniversary of the incident, according to a media report.
The promotion, launched on May 18, used the English words “Tank Day” in a promotion for the company’s Tank Series drink tumblers which have “spacious volume” for large amounts of coffee. The launch coincided with the start of the Gwangju Uprising crackdown on 18 May 1980 which lasted 10 days and resulted in the deaths of hundreds of demonstrators. Later it was also confirmed that troops deployed to quell the uprising also committed rape and sexual assault. Many Koreans reportedly felt Starbuck Korea’s “tank” motif related to military government vehicles deployed to crush the pro-democracy protestors.
Starbucks Korea was sold off by the United States-based Starbucks Coffee Company in July 2021 and is majority owned by a subsidiary of South Korean multinational retail company Shinsegae and Singapore’s sovereign wealth fund. The marketing blunder prompted a harsh rebuke from South Korea’s president, an apology from Shinsegae, the sacking of the chain’s CEO, an apology from Starbucks’ headquarters in the US, and a written pledge from Shinsegae to thoroughly investigate approval procedures and re-examine the review process for marketing content across all its affiliates. Read more
June 10 is World Franchise Day
The second annual World Franchise Day to celebrate the impact of franchising on communities around the world will be held on Wednesday, June 10.
The annual day held on the second Wednesday of June, is an initiative of the World Franchise Council, the global body for 45 national franchise associations, including the Franchise Council of Australia (FCA) and the Franchise Association of New Zealand (FANZ).
Each participating nation will promote awareness among government, business leaders, consumers and potential franchisees of the benefits of franchising and highlight franchisees as small business owners who contribute to their local economies by creating employment opportunities and support local suppliers.
Franchising empowers local entrepreneurs to thrive while benefiting from the support of an established system, and leveraging their own spirit of entrepreneurship, innovation, dedication, and hard work to succeed. The franchise sector in Australia generates revenues of $174 billion across 1,200 brands and more than 94,000 small businesses employing more than 565,000 Australians, according to the FCA. Franchise brands are also encouraged to engage in World Franchise Day by showcasing their franchisees, and in turn, encourage their franchisees to highlight to their customers that they are a locally owned and operated business.
ACCC encourages franchisors to update register listing
The Australian Competition & Consumer Commission (ACCC) has issued a statement reminding franchisors of their obligation to maintain an up-to-date profile on the franchise disclosure register.
The Franchising Code of Conduct requires franchisors to maintain a profile on the register, which must be updated or confirmed annually and no later than five months and 14 days after the end of the franchisor’s financial year. In the past 12 months, at least four franchisors have been penalised for failing to maintain an up-to-date profile ($19,800), failing to include mandatory information ($15,650), and failing to update or confirm their profile ($16,500 each). Read more
Footwear brand plans $50m franchise buyback
The Australian Securities Exchange (ASX) listed parent company of shoe retailer The Athlete’s Foot has provisioned $50 million to buy back 30 remaining franchise stores as it moves to a fully corporate-owned model, according to a media report.
The buyback is part of parent company Accent Group’s five-year plan to grow annual sales across its portfolio of mainly footwear brands to $1.9 billion with a 9% earnings margin by 2030.
The company currently operates approximately 900 stores across Australia and New Zealand. It expects to buy back The Athlete’s Foot franchises between the 2026 and 2030 financial years, with a contribution of $14 million in incremental earnings before interest and tax (EBIT) by 2030.
The Athlete’s Foot has been operating in Australia for more than 45 years and has approximately 150 stores. It is not the first listed company to exit franchising, and follows the Bank of Queensland and fuel retailer Caltex who have bought back or otherwise ended their franchise agreements in recent years. Read more
Australian pharmacy chain to enter UK market
Australian retail pharmacy chain Chemist Warehouse will enter the United Kingdom market after parent company Sigma Healthcare signed a Memorandum of Understanding with London-based employee-owned pharmacy group GreenLight Healthcare Limited, according to a media report.
The joint venture between Chemist Warehouse and GreenLight will see 75% of GreenLight’s 22 stores rebranded as Chemist Warehouse with Chemist Warehouse providing intellectual property and retail support. GreenLight will meet dispensary and professional services requirements and provide back-office support.
Chemist Warehouse already operates in New Zealand and Ireland. Its entry into the UK will commence with five GreenLight outlets being developed into Chemist Warehouse stores in Phase 1. Read more
Multi-unit franchisee wound up by ATO
A multi-unit franchisee of Boost Juice which operated four outlets on the Gold Coast has been wound up by the Australian Taxation Office (ATO), according to a media report.
Abadell Pty Ltd, the operator of four Gold Coast locations including Robina, Australia Fair, Paradise Centre and Surfers Paradise, was wound up the Federal Court on May 1, following a winding-up application by the Deputy Commissioner of Taxation in December last year. All four stores have been marked as temporarily closed, however franchisor Boost said all stores would reopen, according to the report.
“We recognise this is a difficult time for all involved. We are committed to supporting our Franchise Partner throughout this process,” Boost noted, and confirmed that the stores would reopen under interim management.
Applications by the ATO to wind up a company arise from unpaid tax debts. Abadell Pty Ltd registered business names for the Gold Coast Boost Juice stores progressively from August 2003 until March 2009, indicating when it may have commenced its Boost franchises. Read more 1; Read more 2
Union win opens national bargaining for fast food chain
A recent landmark decision by the Fair Work Commission opens the way for more than 100,000 workers across 1,100 McDonald’s outlets in Australia to negotiate together for a single bargaining agreement for the first time in years, according to a media report.
The decision means the Shop, Distributive and Allied Employees Association (SDA) can engage in collective bargaining with McDonald’s after the brand abandoned previous agreements and refused to negotiate with the union seven years ago.
The SDA is expected to seek improved job security and access to hours for workers, as well as better dispute resolution processes and strong protections around rostering, shift changes, safety and clearer classification structures.
In 2025, a Fair Work Commission decision resulted in 18 McDonald’s franchisees in South Australia being forced to collectively bargain with workers, and which contributed to the latest decision. However whereas the South Australian decision has resulted in an ongoing bargaining requirement, the national bargaining orders only last for 12 months, and carve out the South Australian franchisees.
McDonald’s is also facing a class action claim in South Australia based on an interpretation of the state’s Public Holidays Act dating back to 1910 that treats every Sunday as a public holiday, with lawyers and the Retail and Fast Food Workers Union arguing that staff who have worked on Sundays have historically been underpaid. Read more
Pharmacy franchisee warned of debt risks before collapse
Infinity Pharmacy, the collapsed multi-unit franchisee of 72 Priceline and 20 other pharmacies, was warned in writing by lenders about debt risks more than a year before its collapse, according to a media report.
Specialist credit solution provider, GCI Funds first recorded their concerns in correspondence with Infinity in November 2024 in which they demanded the company agree to an 11-step plan including the restructuring of multiple debt facilities and creating a board to oversee a divestment program. It is reported that before entering administration, Infinity never had a formal board, but instead had eight senior shareholders who acted as directors, two of which controlled a total of approximately 52% of the company. GCI is owed about $60 million by Infinity.
Infinity, the single-largest franchisee of Priceline, was forced into receivership in December 2025 after Priceline franchisor and drug wholesaler Australian Pharmaceuticals Industries (API) discontinued its support for a last-minute rescue deal for the ailing company which owes creditors in excess of $400 million. API is owned by publicly-listed Wesfarmers, the parent company of hardware chain Bunnings. Read more
Improve Franchise Advisory Council feedback
A course on how to set-up, support and improve the outcomes achieved by Franchise Advisory Councils (FAC) will be held in September.
The course will focus on the importance of a charter to establish guidelines for an FAC, as well as how a council is structured including membership criteria, election and induction processes. It will be held in two live and interactive online sessions on September 15 and 17 from 1-3pm AEST. For more details, click here.
Insights into resolving franchise disputes
A two-part workshop to explore the topic of Resolving Franchise Disputes will be held in September.
The interactive and live online workshop will be conducted in two parts on September 22 and 24 from 1pm-3pm AEST, and will include strategies and tactics to avoid disputes and repair franchise relationships. The course will also explore common causes of disputes and how to avoid them, methods to avoid unnecessary escalation, maintaining continuity of support services during disputes, and the importance of trust, transparency and respect in the franchise relationship. For more information, click here.
Jason Gehrke MBA CFE, Director, Franchise Advisory Centre
Jason has more than 35 years’ experience in franchisee, franchisor, advisor and educator roles.
He teaches franchising best practice to franchise leaders around the world, and writes extensively on the sector. He has worked with hundreds of franchise brands and seen many common (and avoidable) mistakes made by both franchisors and franchisees.
