Guzman y Gomez is going public: We speak to co-CEOs Steven Marks and Hilton Brett

Bryce: [00:00:31] Welcome to another episode of Equity Mates, a podcast where we explore what's possible in the world of investing. If you've just joined us for the first time, you have joined us for an absolute cracker of an episode. My name is Bryce and as always, I'm joined by my equity buddy, Ren. How are you? 

Alec: [00:00:47] I'm very good, Bryce. I'm very excited for this episode. You say in your introduction, every time we explore what's possible in the world of investing. Yes. Well, here is what is possible. Someone can start a Mexican restaurant and 18 years later, can run a Mexican restaurant empire and list that on the Australian share market. 

Bryce: [00:01:11] Yeah. So to wrap that up, we are very excited because today we have the founder and co-CEO, Stephen Marks from Guzman Y Gomez and his other co-CEO, Hilton Brett, joining us in the studio, because they have just lodged for IPO on the ASX. 

Alec: [00:01:29] Yeah. So that prospectus has been lodged and we, interviewing both of them, maybe the only podcast that got to interview them, maybe, maybe allegedly. But this is really exciting for us because we first spoke to Stephen back in 2019, pre-COVID, and he was so energetic. I think that was one of the few interviews over the years where we've left, and it's just been like, we've been so pumped up, and this was one of them. This guy loves Mexican food. 

Bryce: [00:01:58] Loves Mexican food. Yeah. Well, that episode was actually titled The Ambitions of Going Public. So this has been obviously on the roadmap for a while. The growth story has been pretty phenomenal. And, and we've been lucky enough to have known Steve, for the last four years. So the new part of the story is from today.

Alec: [00:02:14] Well, here we go. I've got their numbers from 2019. They had 120 stores in Australia and 13 stores internationally. At the end of last year, they had 183 stores in Australia and 26 stores internationally. And in terms of network sales, you know, sales from their stores. Yes. In f19 they did 254 million. Okay. Last financial year. Yes, 759 million. Nice. That's a lot of $13 burritos. 

Bryce: [00:02:42] 1380. So there are some pieces of jargon that are likely going to be mentioned a number of times throughout this episode that we should just define. So you're clear on what we're speaking about. The first is QSR which is just quick service restaurants. So that's a category of fast food restaurants. The other is AUV average unit volume. 

Alec: [00:03:03] AUV being average unit volume is like the average sales per store. Just in case we weren't busting that jargon enough.

Bryce: [00:03:11] There are three main models. There's corporate, the corporate model. There's the franchisee model and the master franchise model. The corporate model is obviously stores owned and operated by the head office. The franchise model is where they allow people like Ren and Aya to start a Guzman Y Gomez operation, and we pay the head office the privilege to do so. And then the master franchise model is where it's the same thing. But we get to operate a region. 

Alec: [00:03:38] Yeah, well, and, if we get that region, we can then franchise within that region as well.

Bryce: [00:03:44] So the reason why we just want to make that clear is because there's a, a lot of there will be a lot of discussion on expansion. And that makes up a pretty important part of it. 

Alec: [00:03:52] Yeah. Well, I mean, Guzman runs all three models in Australia. At the end of March 2024, they had 185 stores. 62 were corporate, so they'll run by head office. Then 123 were franchises. Most of those are just the franchise. The second model that you're talking about. But South Australia is a master franchise. Similarly, if you look overseas, Singapore and Japan master franchises in the US, yes, they are in the US. They run corporate stores. So that's just a bit of, I guess, restaurant industry jargon to be familiar with because hopefully we're going to pick their brains on where it all goes. 

Bryce: [00:04:27] And we should have said at the top, but if you have no idea what Guzman Y Gomez is, it's a fast food Mexican restaurant chain. Yes. So yeah. 

Alec: [00:04:36] I reckon most Australians would be familiar with it. If you're not from Australia, if you're from the States, think of it as a better version of Chipotle.

Bryce: [00:04:43] Oh yeah, much better. Anyway, we have the absolute privilege of sitting down with Stephen and Hilton. We'll be covering company history and founding story, looking at where the company is at today and then, importantly, what the future holds. There are some things that Stephen and Hilton aren't going to be able to talk about. And one of those is valuation. So at the end of this episode, Ren and I are going to be comparing Guzman Y Gomez to some of the fast growing global competitors in the quick service restaurant space, and really looking at how they're valued compared to some of their peers. So super important question to answer as, as you're looking to decide if this is an appropriate investment. 

Alec: [00:05:25] So stick around for that. But before then. Let's go to our conversation with Steven Marks and Hilton Brett, the co-CEOs of Guzman Y Gomez. 

Bryce: [00:05:38] All right. Well, Stephen, Hilton, welcome to equity Mates. 

Steven: [00:05:41] Thanks for having us. Good to see you guys again. 

Bryce: [00:05:44] It's a pretty exciting moment Steven, because you've just lodged for IPO and we went back in the history books. We first spoke to you four years ago, Early stages Equity Mates about the ambition to IPO Gomez and here we are. How are you feeling?

Steven: [00:05:59] So excited I mean I actually did listen to it before I got on it just to make sure what I said was accurate. It was fun to have a take on. We're getting ready for the IPO. Well, it's finally come in. Everything great takes time. But you know, reflecting on the process of putting together a prospectus is, you know, just it just shows that, you know, through all these years, you know, with the support of our investors, our board, and obviously the amazing team at GBG that this company has been built really, really strong. And it's just a testament when you get all these external advisors that obviously you have to take part in, you know, and putting together a prospectus is that we've really built an amazing business. And, and it's so great to have Hilton on board and lead us through this process because it's a lot of work. You know, you got to sort of build a prospectus and run the business. So Hilton and the team have just done an amazing job. 

Alec: [00:06:47] Yeah. So you've lived every step of this journey 18 years and counting, 24. 

Steven: [00:06:51] Hours a day? 

Alec: [00:06:51] Yeah, yeah. Hilton, you've come in in the last few years as co-CEO. What's it been like, jumping in and joining this journey as it sort of just goes from strength to strength? 

Hilton: [00:07:01] I've loved every minute. It's such a privilege to work alongside Stephen and really bring his vision and his dream to reality. It's been amazing. Well, I mean, I've been, I mean, with business on the board for six and a half years and joined Stephen back in June last year and, as co-CEO in October. And it's such a privilege to be part of this amazing journey. And, and we are really just getting started. I know it's been 18 years in the making, but the opportunity to, realise this dream of building the best restaurant business in the world and change the way the masses eat is an amazing opportunity to be part of. 

Steven: [00:07:38] You know, we call it a milestone, but it's really just the starting line. And if you like Chase. So we'll let the team and maybe enjoy one day. 

Alec: [00:07:45] That's a deal. After 18 years, you've finally made the starting line. 

Steven: [00:07:51] It's like when people join G2, we always say, man, it's it's an intense place to work. But it's highly rewarding because, you know, we're right here. Be the best and biggest restaurant company in the world. So so people always say, is it always like this? Yeah, probably for the next 20, 50 years. So get used to it. But it's exciting. 

Bryce: [00:08:06] Let's use that as a point to just give a brief overview of the founding story, because a lot of people are familiar with the brand, but probably less about how we've got to this point. So Steve, and here I will just to give us a quick overview of the founding story and how we have managed to get to here. 

Steven: [00:08:20] Yeah, sure. So I moved, I'm from New York originally, and, but I am an Australian citizen now. Finally, Gotcha. Very proud to be. I do have two Aussie daughters. And a son now. But I got here over 22 years ago, and I think, you know, I grew up in New York. I was so lucky to have such amazing Mexican food. And I came down here after spending eight years on Wall Street and had always been very entrepreneurial. And I came down here in hopes of building a hotel. Actually, I was lucky my best friend moved here. Who's the co-founder of. His name is Robert and still one of my best friends since I'm four. And, couldn't get the hotel really through zoning and just really to bring it to life to where we wanted to. And, we had a number of different businesses together. But we were lucky growing up in New York to have such great Mexican food and, obviously, went to a Mexican restaurant here, then went to another and another and another and another. And I think any founder was slightly obsessed with what they do, and I thought they were all extremely average. And, I remember walking into the office and telling Robert, I got the next big idea. I said, we're going to reintroduce Mexican food to this country. He's like that, but you're not even Mexican. I said, but it doesn't matter. We know how but how it should taste and what it is. And that began the story of Guzman Y Gomez, which we named in honour of friends, brought in chefs from Mexico, surround ourselves with a Latino community. And our first store came to life in 2006, in New Town. And, you know, when you open up, you know, a restaurant, you always think it's going to work immediately. And it didn't, you know, and then the second one didn't really work, and the third one really didn't work. And I think, you know, at that point, you really look at yourself in the mirror and you realise your values mean something in the values of God. You've been around this since day one. And the number one value, it's all about the food. And we've never compromise on the food actually. And we can get into clean later or our people and many of the people from the beginning are still with us. And when you look back on 18 years and you know, the mission for refugees to reinvent fast food and change the way the masses eats, that it's really resonating with guests coming to you. And I could be not, could not be more proud of the team at GBG. Our investors are board and our guests that come into GBG. So 18 years and it's been a journey for us. But you know what? We're all getting started, which is exciting. 

Alec: [00:10:29] So 18 years and now you've got over 200 stores. Tell us a little bit about the network development. Over that time and in particular, tell us about, I guess, the mix of franchise and corporate stores and how that's rolled out over the years. 

Steven: [00:10:44] Yeah. So when we started, you know, it's funny now that obviously we're listing, you know, two of these had a board in place since 2009 and it's the guys have built McDonald's Australasia, a guy named Guy Russell, Steve German, Pete Ritchie, still an investor, was around us in the day, but guy's still the chairman. And when we started, they were and have been very influential. And you know, we own the first, you know, say six restaurants. And I remember when they broke even, it was like that was a huge milestone, you know, and they said, you know, maybe we can start the franchise, but you can't franchise through till you can charge a certain royalty. I said, so your revenues got to be X. I was like, well, we're not even close to that. He will keep working, kid, you know? And we kept working. We got to a point where the model worked, right. There was enough revenue coming through GBG no matter what. And we brought in our first franchisee, which was in Queensland, and I was the married Dave family. There's still investors, they still are franchisees. And they played such a huge part of the GBG journey, you know, because I always thought, you know, would a franchisee love it as much as we do? You know when you find people and, you know, you look back on a journey over 18 years like originally, it's a dream, right? And then it becomes other people's dream. And I think when those two come together, it's a beautiful thing to watch. Right. Because it's not your dream anymore. And all of a sudden you see your dream and everybody else's dream come to fruition. I think going to this IPO is just, you know, a huge milestone for everyone. So when we look at GBG now, we have a very healthy mix of corporate stores and franchise stores, and we like it at work in Australia may not work in other places. And I think that it stems from Gigi's values like we have we're very transparent, open business, and we have amazing relationships with our franchisees. You know, our job is to make sure they're more profitable year after year. And when we look at the mix that we have in this country, we have a big corporate team, right? So we know where we can run great restaurants and we know where our franchisees can run restaurants. So we just look at it. We want to run great gigs. We don't care if it's franchise or it's corporate, but we want to see most importantly, who's going to be better suited for the community. So a lot of regional stores are definitely franchised because they're from that area. They're involved in their communities. Let them metro stores, you know, obviously that's where we're based. We really look at it's just G.G. and I think our franchisees know that and we don't take any rebates. We've we have an amazing relationship with these guys. And we're truly one team. There's no divide like corporate versus franchise and, Hiltons obviously overseas, you know, a vast part of this business and it's our pipelines, you know, you know, you want to make sure, especially when you're a public company, that you're hitting the store openings that you hit. So it's a very healthy mix of franchising corporate. Maybe Hilton could, could just, elaborate more on that mix. 

Hilton: [00:13:18] We have 185 restaurants in Australia. 62 of those are corporate and the remainder being franchised, a combination of individual franchisees that have one store and then some that have multiple stores. And then if we think about South Australia, we got a master franchise agreement. Similarly, with a master franchise agreement with our partners in Singapore and also in Japan and then in the US, we operate as a corporate restaurant. So for us, it's always been, you know, as Steven said, the relationship with our franchisees, it's all about partnership. It's about obviously having the right people running the right restaurants within their local communities and most importantly, ensuring that we're obviously with our franchise model. And what we're super proud about is, is the economics of our restaurants and the returns that our franchisees deliver. So when we look at our target economics, we're always kind of very, very focussed on making sure that our franchisees get very solid returns. As well as obviously from a corporate perspective. 

Alec: [00:14:13] Now, Hilton, I want to stay with you for a second because we want to turn to, analysing GJ today as a business. And for people who are not familiar with your background, you run an ASX listed company before. So, this is, you know, this is familiar territory for you. So when you come into a business like GJ and you start to analyse it, you think about, you know, as a listed business, how am I going to need to look at this company? What are some of the really key metrics that you're focusing on, when assessing the health of the business? 

Hilton: [00:14:42] I think that most importantly, obviously, when we look at the metrics of of any consumer business, and in particular GJ is the restaurant economics, and that's the most important thing, is obviously having strong economics, generating strong forward margins, generating healthy returns on our capital investment. And importantly, obviously, from a franchises perspective in relation to the franchisees returns that they generate. So from a corporate perspective, we obviously generate our revenue out of our corporate restaurants. We generate our full margins, which are running around just short of 18%. And then as far as our franchise business is concerned, we generate franchise and upfront franchise fee. That is in the order of 90,000 per franchise. So GBG out of franchises generate some royalties. We generate 8% on the first $60,000 revenue and then 15% in excess of that. So the most important thing, as I said to you, is the ability to continue to obviously drive strong economics from. Like for like perspective. So when we think about the business, we always thinking about a business that's called growth, both from an organic perspective as well as from a like for like perspective, judges has generated extremely strong like for like growth over the last four years and four years and continues to do that. And then I think that one of the probably the most important things of this business, and when you look at any consumer businesses is the watch space. So when we look at G.G. today, we got the opportunity in Australia to take the business to an excess of a thousand restaurants, as you would have seen in the prospectus. We commissioned a third party independent report company called Think Economics. We did some research on the industry in terms of the general curious or industry, who the players are in the market, what the growth looks like, and really it a sense of validation for us in terms of the opportunity to have in excess of a thousand restaurants in Australia over the foreseeable future. There's been substantial investment in this business over the last 18 years, putting us in a position where were the opportunity to open 30 restaurants next year? And then with our real estate spy team, we put the infrastructure in the support to be able to continue to build that and to open up to 40 restaurants per annum over the next five years. So there were slow build in that regard. When you look at the environment today, what we're seeing is general consumer environments a little bit tough as a lot of brands are pulling back on marketing, whereas for us it's an opportunity to really continue to invest in marketing and drive the growth of the brand. When we look at our digital component of our business, 25% of our business is done through the digital delivery aggregators. That's obviously been a strong trend within the market. We have about 17% of our revenue coming out of our app. That is an area that we see substantial growth coming from a lot of our customers. Ordering from the app is intuitive. We have invested a lot of money. It's unique to China. So if you think about Australia in a nutshell, think levers to be able to drive growth, you know, massive watch space where there's an opportunity to get up to 1000 restaurants. And then we, you know, we're just getting started globally. You know, we've got 16 restaurants in Singapore, five in Japan and in the US. It is a massive opportunity where we've got four restaurants. And I know that Steve talk to you about the US word, which we're very excited about as well.

Alec: [00:17:40] I love that Hilton. There was so much information there. And it's so exciting to sort of hear some of the, I guess, the tenants of where this business could go. I want to pause and just say, the Guzman breakfast burrito. Highly underrated. So well done there. More people should be eating that. 

Steven: [00:17:57] Thank you. I think it's the best thing on the menu. I'm not even kidding. And I'm glad you understand that. 

Alec: [00:18:01] But I think, look, there's a lot of things we can talk about. Like, we want to talk about where that thousand restaurant number comes from and where you say it, the opportunity with like, how fast you are and where that can go. But I think let's start with food because like, that's at its core what this business is. And, you know, Guzman, with your real clean food, like, it's been a big part of your marketing campaign, and I guess, like, of your core values as well. So, Stephen, maybe talk to us about, third and I guess how this, like, real food, clean food can be, differentiator and a competitive advantage in the market.

Steven: [00:18:35] You know, for years people have said, oh, you guys have fast casual. I said, no, no, no, we're fast food. And when we open up drive, there's at McDonald's is fast food as a nowhere fast food. It's a McDonald's and food. Yeah. And I really believe it. I mean, I think traditional fast food isn't really food anymore. And I think what's amazing is, you know, when I, when I talk about real food, you know, I mean, obviously we've launched clean as a new health. We did in 2009, 2010. We relaunched it because we have, you know, another 500,000 people a week that come to Gigi and to us, you know, after you eat food, you should feel good. You know, our mission is to reinvent fast food and change the way the masses eat. And I think when you come to Gigi and you see the alignment of everybody, they really believe that. It's just not something that we're saying. Like, I really think it's a food company, have a social responsibility to serve the people that come to your restaurant, real food. And I think, you know, when I see this younger generation coming in, and if you look at our university stores now, younger people may have a much shorter attention span these days, but they know what they want to eat. You know, like my children, regardless that they may be slightly biased, man, they don't eat traditional fast food. And I think for years the problem is they've had no other alternative. We've given the masses an alternative to fast food. Right? And we really believe this is fast food for this generation. And if you see, as Hilton was just discussing, you know, our growth throughout the years, our comp growth throughout the years, it's resonating. It's something that we're really proud of.

Bryce: [00:19:55] Can you, I guess, elaborate on how hard it has been to actually achieve getting that clean food in? And I think particularly around how difficult it will be for a competitor to replicate that. I think when you have experience in clothes. Yeah.

Alec: [00:20:08] So I worked at Kohl's who have done a lot of good stuff, especially in the meat supply chain. And this isn't an ad for Kohl's, but you know, they did sell stuff for a pork that had hormone free beef. And I just like it's, you know, something that you market, but like I saw behind the scenes just how hard it was to, like, fix up the supply chains and get all those things. So whenever I say those claims now, I'm like, oh, that's going to be hard for a competitor to replicate. 

Steven: [00:20:34] Yeah. I mean, I think there's two ways. Look at it. Either you really believe it and it's in you. It's like it's in God's DNA. You know, I mean, and maybe it started with me, but, you know, like minded people get together. You know? So I'll give you an example. We, you know, we buy I think this we put over 8 million avocados. So all fruit and veg comes in fresh to GBG. Probably win the biggest you know Roma tomato buys in the country outside the supermarket to the biggest free range. And I'm glad you brought up. And we have a view on animal welfare or pork sales for free or chickens free range. Not RSPCA but free range. Very very different. And when you see all this beautiful, you know, fresh chicken coming in and obviously food safety's number one to us. We got to make sure obviously that our food is cooked properly. And we can go into that in detail. We have all this fruit and veg comes in fresh. You got to see our when people walk into our homes they can't believe it. We have our tortilla right. It's our recipe. Everything's Gigi's recipe. Even though you know stuff we get made by lack of staying out of Mexico and Mission Foods makes our tortillas. We realised once we open up our first drive to we were going to sell French fries. Now, ten years before that, somebody said, you want to sell French fries? I will never, ever sell a French fry. So we're gonna open up a drive, too. I was like, oh shit, we're going to sell the best French fries, you know? And I started looking at French fries, and I listen, I'd see 70% potato, 80% potato. I was just like, Holy shit, man, what's in this other part? This started this whole cleanse. New, healthy. And then I realise I was looking at our tortillas and we went to so many tortillas and I serve a preservative. 282 for shelf. I'm like, I don't need shelf life. We go through so many. So I went back to Mission Foods, said, we want to take this out. He's like, well, we don't take that out. So you can take it out, can't you? And became the first preserved refried tortilla which they now they sell commercially. And we did that with all of our suppliers. Like sometimes there's a colouring in it, sometimes it's, you know, it's usually preservative. There is an additive. Right. And I just thought everything is just naturally fresh. But we had salsas being made for us. Obviously it doesn't have to be fresh herbs. We do a fresh pico de guy who every day in guacamole and the year and the basic got clean took three years. Well, you know, three years of convincing people why this was so important. And it's not easy, you know? I mean, you look at, you know, any company that you build your password, nothing's easy, you know, but it really meant something to us, you know? I mean, and what's beautiful is you realise that it means something to your guests coming in, you know? So all of us, when people egos and they say, hey, when I eat your food, I feel good after, unlike every other traditional fast food, then that's amazing, you know? And that's the way we look at our food, right? It is our job, especially in fast food. Right? You know, you got single moms and dads, you got families that need your help. Our thing is you come to Z, will take care of it. You just come in and enjoy it and we take that very, very seriously.

Bryce: [00:23:05] Gym junkies who need the clean chicken protein. 

Steven: [00:23:09] Double chicken mini bowl, right?

Alec: [00:23:11] Right. 

Bryce: [00:23:12] That's exactly what I got you guys. 

Steven: [00:23:13] I mean, but honestly. And is it anything healthier? 

Bryce: [00:23:17] No, not well, but a little. 

Steven: [00:23:19] Bit of hot sauce on it, you know. Yeah. Black beans. Come on. So good. You know, there's so many flavours. Don't talk about food. Yeah. You come to G big man. That's all we talk about, food and food safety. 

Alec: [00:23:29] So another differentiator was speed. And that was probably the one thing I walked away from our interview four years ago. Just that was the thing that stuck in my mind how passionate you were about how quickly you guys could make real food. Customer ordered, and just get it out the door. And I remember you, back then, you were talking about you were the fastest. So, like, right up there in terms of the fastest of all of your SR peers, help us understand how quick you are and how important that is to the business. 

Bryce: [00:23:59] What's the fastest burrito you've ever made and. 

Alec: [00:24:01] Out of you? Who's quicker at making a burrito? 

Steven: [00:24:05] I've seen health on the line. He is a son of a butcher, by the way. So that guy's passion for food, I said, you can probably grow a better piece of chicken. I think I can roll the burrito faster. That's just because I have more experience, you know? But speed is like, this is the whole thing about reinventing fast food. Hey, it's got to be food, and then it's got to be fast, you know? So for GJ, you know, it's all about it's obviously all about food quality, accuracy and speed. So we as Hilton was talking about earlier, we develop our own bespoke steering system that gives so everything. It is fully customisable, right? And it comes out and and then then the modification you want kind of walks the line with you and then it goes on to a kitchen delivery system, which it knows exactly if it's pick up, if it's obviously through a delivery aggregator, it's through the app, or it goes to drive through and we clock everything. So as Helen said, men are orders. I mean, it matters, you know, if you're basically in cities, locations, CBD locations, you know, everybody, it has to be 75% of the four minutes. That's the goal. We hit about 7% or average drive two times. It's between 330 and 4 minutes. You know, I think McDonald's is around 330. You know, I mean everybody else has much, much longer than that. And we realise that, you know, the most important thing is food quality. Like the rice got to be hot and fluffy. You know, we temp every piece of chicken. You know, I mean that brisket that, you know, it's got to be tossed beautifully. And you know we teach people to love food. You know, our people and what we've launched recently, about two years ago, which was a game changer for GBG, the culinary School of excellence for GBG. So there's so many stories that we've gone through in building, you know, our recipes and our products. And we always believe in them. People at GMG. If they understand the stories, they get an emotional connection to food. You know, it's kind of when you temp a piece of chicken, you put it gently into the pan. You don't just flip it. I was like, you know, I mean, that's just the space. I got to have some respect for the chicken and the people at first, like, I think this guy's crazy. But then if you get enough crazy people that have passion, everybody really believes in it. And then you just try like they're there. You know, I mean, we look at fast food is hospitality. That's the way we see it. Somebody is walking in. It's our job to deliver an experience that's memorable. And I don't care if people call it fast food or not. You mean that is our job and our and our salespeople, you know, and the way we train and develop, develop people is there. So the speed plays one huge aspect of it, you know, I mean, and I think when you see our comp growth and our loves, like Hilton was saying, you know, we can talk about breakfast in a second, but people in Australia eat at certain times, usually 12 to 2 and 6 to 9. So people used to say, what do you do between 12 and 6 a.m.? Like, I don't really care between 12 and 6. You know, we have the platforms that basically can drive more revenue during the times that they eat. And if you're not fast and you can't do it, so, you know, it's beautiful. Now, as Hilton was saying, you know, the foundations, we built a gig because because of our board, because of our investors, and because we know we're really just beginning. We've invested so heavily in these. And that's why you see the huge revenue growth. You know, our Avs, you know, through our drive through stores or even our strip stores, just because the food quality, the operating platforms, man the world class. And I think going through this whole perspectives process, you know, even though we all knew it, to go through something so smoothly and getting all these external advisors like, wow, it's an amazing business you built. Yeah. And the good thing about goji, we're very hungry. We have three things a G.G.. We have this thing that we say you're good enough to get better, and it ties. It's all about hunger, humility and curiosity. And. And that's how we drive this business. Well, yeah.

Bryce: [00:27:18] It's been a pretty phenomenal growth story today. I think revenue has been, what, 29% Kiger from Fy15 to FY 23. So that's amazing. So the question then for us as investors is where to go from here. Let's start with Australia. You've spoken about the 1000 store opportunity. the presence suggests that you're Australia sort of 19% penetrated. So there are a lot of opportunities there to put that into context. Macca's has about 1043 stores as of April 2024, and Domino's has 733. So huge growth potential. Can you just talk through that thousand store opportunity? Why the thousand? And, yeah. And where to go from here?

Hilton: [00:27:57] When we look at where we are today, we'll open 26 restaurants this year. Financial year. We've done 24, with two more to go during the month of June. We approved 49 sites in the last 12 months, 49 sites. So as we were talking earlier, we've made a substantial investment in this business over the years to be able to have the platform for growth. We have a real estate team of about 30 people. Of that ten people or real estate development managers. And they saw role is to identify sites and to, and to open those sites. And on average a real estate development person does between 4 and 5 sites. Here we see ourselves getting to 40 restaurants over the next five years, starting over 30 restaurants next year. We've got a pipeline of 30 restaurants that are approved that we have planned into open next year. When we think about restaurants from a pipeline perspective, it takes approximately two and a half years from when we board approve a site for a drive through to open, and a strip is anywhere between kind of 12 and 18 months, just depending on the site. So we've got a very strong and healthy pipeline to be able to, as we said earlier, open 30 restaurants next year with ability to build up to 40 restaurants over the next five years. Typically, when you look at an example like the Gold Coast, we've got 40 restaurants within that area, and our average unit volume in the Gold Coast is doing about $96,000 per restaurant per week relative to our average unit volume in our current network of 87,000. And those 14 restaurants have a population density of around 30,000 people per three kilometres. So that kind of validates the opportunity that when we look at Australia, the opportunity to get to a thousand restaurants, effectively having a restaurant every three kilometres with about 30,000 people around that, which really kind of supports the thesis for us about the opportunity to get to 1000. And then obviously as a business, we're very, very well set up to do that through a combination of corporate owned restaurants. When we look at the future, we're kind of our target splits about 85% Drive-Thru and 15% strip restaurants. Just from a property perspective, we would say to you guys as you want away, obviously to McDonald's with over 1000 restaurants. When it comes to land owner developers, GBG has obviously become very well-known brand to them. Could be covenant and really that kind of partner of choice for to fly drive thrus and triple. I will say that's one of the one things we you know, we don't compromise on food, we don't compromise on people. We definitely don't compromise on real estate. It's all about triple A real estate. And with a unit economics that we've got, which are really industry leading that, that that enables us to secure those triple drive threes and we can pay the rents. That. Most other QSR players can't buy because of the volumes that we do. Now, obviously when I say we pay the rents, we still have very attractive economics in terms of occupancy costs. So, you know, that obviously allows us to still generate full well margins of 20 plus percent in terms of EBITDA, which are also very fundamental to the drivers of growth. As we said, we also have a mix of corporate and franchise restaurants, with a target mix going forward of 60% franchising and 40%, 40% corporates are very, very well set up from a great perspective. We've got franchisees that are within our system that are always looking for additional sites, and obviously that serve a function of attractive economics that we've got. And then naturally, from a corporate perspective, we're getting very, very strong, all of us. So we've got a deep pipeline of of talent within our business. One of the key focuses for us is around how we grow, our team members from within. So opportunities when you join guided to ultimately become, start off as a shift data, become an AI assistant restaurant manager and become a managed, a manager if you'd like to become a franchisee as pathways exist. And also if, even if you're working within the head of a structure and want to become a franchisee, we've got a number of instances where that takes place. So very, very strong on on on development from within. 

Steven: [00:31:55] Obviously we have amazing relationships. So our franchisees you know the majority then want more restaurants. The people at Ola Ola essentially saying head off. They want to become franchisees. Everybody wants to come franchisees. You know, I mean, which is fantastic. And and the beautiful thing about it just shows how strong the culture is. You know, when you sign up, like Hilton was saying, for drive-thrus right now, it was like, well, now that's a lot of restaurants open. What is McDonald's Golden KFC? I mean, these guys have pretty mature networks and most people can afford triple corners as you have triple A revenue. You know, I mean, and GBG has that. So I'm not saying it's a piece of cake to fund real estate. Like we've got a passionate team of ten people out there all day long. But we've already developed this pipeline and it's just growing and growing. You know, we opened up our first drive to in 2015. Now people are like, I think I'm gonna do drive-thrus. You know, it takes two and a half years to open one. So we've already had that pipeline in place, and we've just basically built our team to be even stronger, to add more stores, and that's what gives us the confidence into the future. 

Alec: [00:32:48] The number that stood out to me that you said, Hilton, that you're aiming for 85% drive-thrus, 15% strip. And like my and I guess it's this is just a function of where I live in, in Sydney. But I would have assumed GJ was a lot more strip focussed, like CBD location, stuff like that. So that's really interesting to me, like 85% drive through. 

Steven: [00:33:08] And the reason that split is in 2015, we kind of ditched a real estate strategy that we're going to drive through, you know, but then you look at these great areas, right? You know, the baby, but we call the store number one and the baby in Newtown. Right. Newtown now we have Marrickville, you know, five docs. I mean, those are beautiful areas. And there's tons of those places. I was like a hawthorn in Melbourne. You can't get a triple A, you can't get a triple H. I can.

Bryce: [00:33:31] So I used to live in the stress load top.

Alec: [00:33:34] The Kings Cross I was about to say

Steven: [00:33:36] Store number three.

Bryce: [00:33:37] Is door number three.

Alec: [00:33:38] Just crazy because.

Bryce: [00:33:40] I've moved to Redfern now. 

Steven: [00:33:43] I know, so that would be a great strip. I mean, somewhere where, you. What's in the pipeline?

Alec: [00:33:49] Okay, nice, nice. 

Bryce: [00:33:51] Nice. 

Steven: [00:33:52] So that sums that up to 12 months. You covered but today was a franchisor. You know, but those are great strips, right? So me mean a team. Those drive to drive to. If not mean. I mean, think about the pop that's in A3K radius of Maroubra or obviously Marrickville or Skinfood. You know, I mean that's not so much. Those are.

Alec: [00:34:12] Strips. Yeah. Yeah, yeah. To be honest. Right. Right near the rubber. 

Steven: [00:34:16] It's going to be a cracking.

Alec: [00:34:19] It's great it's a great part of the world. It is a big, big fan. Yeah. Anyway let's stop talking about where we live. And actually let's go away. We're talking. 

Steven: [00:34:26] About strips. 

Alec: [00:34:27] Let's let's go away from Australia because, you guys mentioned at the top, that you're in Japan, Singapore and the United States. And I think a lot of Australians would be less familiar with the international story. So can you give us a little bit of colour of how you got to those three countries, like why those three countries? And then, what's the ambition overseas? 

Steven: [00:34:47] Yeah, maybe I'll touch base on those. So Singapore was our first overseas market. We opened there in 2013, which is a massive franchise. The team that's behind that one's from Queensland. His name is Josh Bell. He used to used to work in investment banking came he said one day I met him through through a friend of ours who said, I want to leave bank and I want to join GBG. I said, all right. So he came on board and started working with us, became an area coach. And, he knew we were looking to do a deal in Singapore. And he was really, really keen. So he went to go team up with those guys. So it's Josh Bowen, a guy named Kok Hong Lim have been on massive franchise there since 2013, and the reason why we thought it was gonna be a success in Singapore, everybody spoke English. There's a huge expat community, there's a huge banking community. But. For us, it was. It was also an opportunity to see if our supply chain was global. And it was easy. I mean, everybody spoke English, so it's very easy to understand if this was going to work or not. I mean, because sometimes the language barrier become a little bit difficult. And these guys have done a fantastic job. They got 16 restaurants, you know, it's one of the most delivery. I think it's the second most delivered product in Singapore. These guys, I mean, it's amazing. And I've ever been in people love it over there. It's really impressive. That's Josh and Kok Hong. Awesome guys. You know I mean great team, unbelievable culture in the restaurants. And obviously the food's topnotch in Tokyo. We have we have a massive franchise agreement with a company called the Transit General Office, TGO, who are known as the best, some of the best restaurant operators in the city. And what they specialise in is finding Western brands and western restaurants and introducing it into the Japanese obviously population, you know, to these guys. So imagine long reign Apollo, you know, I mean from Sydney, Bill's cafe, you know, so they owned all those for the Japan market and Guzman Y Gomez and they opened up ten years ago also about nine years ago. They've got five now. And these guys are saying, you know, 20, 30% comp growth now. So it took a long time to have the Japanese public understand what G.G. was now a little bit time. We had a chicken teriyaki burrito. We even had a we even had a beef sukiyaki burrito. So forgive the ideas. It's all about the food. Can't compromise on food, but let's get people in to enjoy it. Let's get me in. If they need something more familiar. Like, our stores in Singapore have, there's a larger Indian population. They want more vegetarian options. So we have a tofu there. We have a mushroom there, which is coming back to Australia. And so then everybody get excited and I want to drop that somehow, you know, I mean, that's the whole thing is that it comes with humility. Like I was saying earlier, like we want busy restaurants, you know, but it has the state of the standard in our guidelines of food. So those guys now looking to expand now, you know, it took some time. So I mean there's 190 people in Japan. Philemon. They love Angus who are excited. And then in the US, you know, we have four stores in the suburbs of Chicago. But like Hilton said, and I think I said when I first met you guys, we go slow, right? You know, I mean, to get it right, we got to keep tweaking the menu, keep tweaking the menu boards because they only know how to order really on a linear set up like a Chipotle. So they come to see the menu boards, even though we have the speed and we have the drive-thrus and we have a different menu, we got to basically educate people. What guys. You know, I mean, and we have an amazing team located just in Chicago, obviously in our restaurants, you know, led by a guy named Andrew Marvel who basically ran marketing for us here. We have one of our best operators from Victoria, Peter down there, who's overseeing operations, full time real estate guy, H.R. people. So we're so the whole goal is to build this infrastructure around these restaurants, to get them to break even as soon as possible. And then once we get the AUV right, like he was talking about, we get the four worldwide, then we'll look at them, we'll look to grow, but we're taking our time there to make sure we get it right before we, obviously hit go, but we'll get there. 

Alec: [00:38:28] Nice. We'll get it. 

Steven: [00:38:29] It's kind of like in Australia. And I think now having Hilton here and we've got an amazing team is essential. It'll free me up to spend a little bit more time there. You know I enjoy that process. You know those early days building those teams, working with people, you know when it's very painful and difficult. But, the AUV is growing, which is great because the food is better.

Alec: [00:38:48] There's, there's quite a nice symmetry to your story. You know, you came from the States to Australia, brought Mexican food from the States to Australia. Oh, like your standard of Mexican food. And now you bring it back to the States. 

Steven: [00:39:00] Yeah. It's exciting. Yeah. And everybody thinks, oh, you're going back to the States. There's so much Mexican. But I'll tell you, in the US there's so many brands that are mediocre. You know, you have such a huge population to sort of, to really support a lot of mediocre brands. We're in Australia. I take my head off to the brands in Australia. Obviously, the CEO doesn't have a huge population to succeed in food, you got to be the best, right? Especially obviously got high rents, high food costs, you know, high labour and everything. So you got to be competitive, you got to have amazing operations. And I think GBG has really proven that it can work anywhere if it works in Australia. 

Alec: [00:39:34] For us, listening to you guys and for investors thinking about Guzman, it's very much an Australian story today, I assume. Correct me if I'm wrong. 

Steven: [00:39:42] No, no, that's I mean, our team's here, our foundations here. You know, our main focus is, as Hilton saying it was getting to a thousand restaurants here in Australia. Obviously we've got great growth and great partnership in Singapore and Japan. And the US is going to take time. And I think one thing that we've done very well over the last ten, last 18 years is focus. And we were very diligent. How we do things were very focussed. And we obviously got a lot of inquiries from other countries, but we got to make sure that obviously Australia continues to grow the way it is. We support our partnerships in Singapore and Japan and we will get to us. Right. It'll just take a little bit of time. 

Alec: [00:40:20] No other countries on the horizon right now. 

Steven: [00:40:23] No more possibly New Zealand. 

Alec: [00:40:25] That's okay. Yeah. Yeah. There.

Steven: [00:40:28] You don't want to spread your resources now we've got a solid team at all essential. But they're working hard. And the last thing. Want to do is take your eye off the ball. Which we never have and we never will. Yeah. You know, we're in it for the long run. 

Bryce: [00:40:41] So you guys are about to go public, and, you know, we've heard the difficulties that can come with that loss or what it might mean for management as well. So we're just interested, like, is this going to change anything for you guys. Is there going to be an obsession around stock price. You're going. 

Alec: [00:40:55] To have a stock price ticker on the. 

Bryce: [00:40:58] just talk us through. Yeah.

Steven: [00:41:00] No, I think it's a good question. We actually I've been asked a few times lately that we've been doing this for 18 years, you know, and obviously when you see the people coming into our restaurants, we had so many kids coming into restaurants. And I was talking about the universities, you know, the university stores doing well to them. And we want to be here for legacy. We want to be for the next 50, 100 years. And we say to our team, because as Hilton mentioned earlier, I mean, a lot of people are all essentially they have options. You know, we incentive our guys, incentivise our people very, very well that the stock price will reflect the true value of the business in the long run. We've never made short term decisions here, ever. We as a public company, we still will never make short term decisions. You know, we want people to say, hey, listen. When we listen, maybe you can look at the price in ten years time because we're building, you know, we want to be the best and biggest restaurant company in the world, you know? And sometimes the stock goes up, sometimes it goes down. But, you know, at the end of the day, the stock price will be a reflection about the business's worth. And, you know, there'll be ups and downs, but we're here. Obviously everybody's here. And I think, you know, when you look at our investor bases, we don't have private equity. We don't. People got to get out in three years. I mean, people are holding this business for the long run, like a lot of us had for the past 18 years and counting.

Alec: [00:42:07] What about you, Hilton accent group? I've done my research here. You delivered total shareholder returns in excess of 25%. Kiger for the 11 years you're running. Okay, co-CEO of Accent Group. So that's pretty impressive. So what's going to change for you? I guess it's just like returning to where you were before. And probably more importantly, what tips have you got for Steve and know that he's going to be public? 

Hilton: [00:42:31] I think that, you know, obviously just kind of touching on the action group. I mean, that was just obviously a team effort. I mean, was an amazing business team, did an awesome job, and I loved my time as co-CEO with Daniel Spinelli and obviously, you know, working with Steve. I mean, it's an absolute privilege. And, you know, the most important thing for Steven is obviously around the values that we share, the communication and the trust, and, and we trust each other. And, and that obviously goes a long way when I think about the accent group, I mean, it was an amazing result. But I think when you look at Greg, you know, sometimes when one of the most challenging things in a listed company is really thinking about growth, because that's really what investors are looking for. And we are really super fortunate with G. And we've got over 20 years of growth in Australia alone. So we're not looking around. Accent group, we obviously had multiple brands was a very complex business. We made a lot of acquisitions. You know, you were limited to a degree with a number of our brands in terms of the number of stores we could have, our brand. Where is it? You have to be in a situation where you had 180 restaurants in Australia, and the white spaces to a thousand, and the world is your oyster. I mean, it's just an opportunity. It's a once in a lifetime opportunity. And and really that was one of the biggest drivers for me in terms of actually, when Steve asked me if I'd like to join him as co-CEO, it was just, you know, an opportunity to work with a founder, to bring his vision and his dream to reality and then to be part of, you know, something so special. Where I haven't seen a consumer business in Australia that has the opportunity from a growth perspective in Australia, let alone, let alone globally. And, you know, obviously with the mission and the purpose that we've got, it's so unique and it's got such a strong moat. So I think for us it's really, as Steve said, just keep our heads down. The stock price will reflect the value of the business over time. We've just got to perform. We've got to make sure that whatever we say we will do, we deliver. And we always and I mean, one of us, we always act with integrity. And we'll always do the right thing. And that's kind of the most important thing. And I think the team, you know, the team are excited, but they all know that this is you know, we're at the starting line now. We're in a public environment. But you know, the opportunity for our guests and our shareholders, our franchisees to be sure I mean that's so exciting. 

Steven: [00:44:50] And that's part of the best part, right? People that love GBG can own a piece of it.

Alec: [00:44:55] Yeah, yeah. 

Hilton: [00:44:56] And we've always run the business as with a public company ethos and you know from, from day one. So you know it's not new to, to our team members and the leadership team in terms of the way we come in and run the business. But we will always, Mike, as Steve said, long term decisions and decisions and the long term best interests of shareholders. And, you know, with a growth in the runway that we've got, the stock price will take care of itself. We just got to be very, very disciplined and execute. 

Alec: [00:45:23] In the prospectus and in your information, your aim is to be the best and biggest restaurant company in the world. Now, we've done our research here and the biggest restaurant company in the world, Debatable if they're the best. But the big. Biggest is McDonald's, with 40,000 locations across 100 countries. Is that the scale of your ambition? 

Steven: [00:45:42] Well, there's certain phases that we're going to go. There's a couple of others in front of that that we kind of want to catch up. 

Alec: [00:45:52] You know.

Steven: [00:45:54] People say to me, I'm so happy and so proud of the people that she would say, what do you mean, we only start? You know, I'm trying to sort of enjoy the process with everybody, but, there's probably another brand ahead of us and McDonald's. But that's the vision. You know, I mean, you look at, you know, Mexican food in the United States and you look at the offering. The people love it. The Mexican food is unbelievable. Why can't this be? You know, I mean, we look at it as a McDonald's for this generation. I mean, I'm not saying I'm gonna go to 40,000 restaurants tomorrow, you know, but in time, and you're just going to be around for a very, very long time. And it's a, you know, we're so proud of this company. We're proud of the people that have built it. And we're just getting started, which is, which is, you know, so exciting for everybody that's involved. Nice. Can't wait. 

Alec: [00:46:35] Yeah. Well they have had a 60 or 70 year head start on you. So yeah.

Steven: [00:46:41] They've done a good job. Hmhm for now. 

Bryce: [00:46:45] Well, Steven in Hilton, it's an exciting moment in this story of joy. It's been an absolute pleasure chatting to you today. Thank you so much for taking the time with us, discussing the community. 

Hilton: [00:46:56] Thank you. 

Bryce: [00:46:56] All the best for the next 60 to 70 years. 

Steven: [00:47:00] Thank you for having us, guys. Always a treat. 

Alec: [00:47:02] Congratulations, guys. All right. Well, that was epic. Thank you to Hilton and Stephen for making themselves available and jumping on the podcast. Bryce, we're going to take a quick break here. And on the other side, we're going to talk about how Guzman compares to some other quick service restaurants. And talk a little bit about valuation as well. Welcome back to Equity Mates. We've just come off our Guzman Y Gomez, IPO interview, with Hilton, Brett and Steven Marks, the co-CEOs of Guzman. Bryce, there was some things that Steven and Hilton couldn't talk about. You know, compare how they compare to other restaurants and valuation. Yeah. But before we get into it, what do you mean, order?

Bryce: [00:47:52] Double. As I said, I think I said it in that double chicken burrito bowl. Brown rice, all the trimmings. 

Alec: [00:47:59] All the trimmings. 

Bryce: [00:47:59] Yeah, yeah, yeah. Chopped up, chopped up onions, coriander. Pickles. I go the couple of the sauces, the, the coriander. Anyway, it's good guys. 

Alec: [00:48:12] So I've got a little tip, so I'm similar. I'm chicken burrito bowl, brown rice. And then you know where you can add, like, double chicken and stuff, add sauteed vegetables, because then that includes quark. And it also the sauteed vegetables really fills out the bowl. So, a little tip for new players. Thank me later.

Bryce: [00:48:33] Nice. All right. Well, then I think, let's kick this conversation off, and it's probably worth defining who we're going to be comparing them to, because there are a lot of references throughout that conversation to Macca's and Chaos and Domino's and the largest sort of fast food restaurants who fare rightly so, you would think if we're talking about Guzman being a fast food restaurant, you would compare to these ones, but they don't have quite the same profile as Guzman do. So we want to just, at least set the scene for who we're going to be comparing to. 

Alec: [00:49:07] Yeah. And when we say profile, it's really, sort of growth potential. See our number of stores, how many stores they want to get to. So white space is what that is, how quickly they are growing and a forecast to grow and then sort of similar, restaurant economics, they're not all the same, but that's kind of like how you want to bucket them, because Macca's certainly doesn't have the white space that Guzman does, and certainly isn't growing as quickly. So that's kind of why you want to do an apples to apples comparison. So forget KFC, forget Collins Foods and Yum brands and Domino's and Mac is the four that we're talking about today. Chipotle, cava, Sweetgreen and Wingstop. Yes. Now they're all American. And that's just a function of, there being a lot more like similar peers listed in America. So before we get into the numbers, introduce me to the companies.

Bryce: [00:50:08] Sure. So cava is a fast casual Mediterranean restaurant. It's actually a leader in the Mediterranean category in the US with 309 restaurants. Chipotle is probably more familiar to people, listening. It's a fast casual Mexican restaurant founded in 1993. They have 3479 restaurants in the US. Then we've got Sweetgreen. So they're a fast casual restaurant with a focus on salads, salads and bowls, 227 restaurants in the US. And then Wingstop was the fourth chicken wing focussed fast food chain, founded in 94. They have 1926 restaurants. Yeah. So a couple there that are in the sort of low hundreds, a couple that are towards the growth ambitions of Guzman in the thousand. 

Alec: [00:50:55] Yeah. Now they're all sort of growing in that double digit, range, both growing unit and growing revenue, sort of teens and 20%. So that's why they're similar. And also, if you look at what they assign themselves about their white space opportunity, how many more restaurants they think they can, deliver, deliver, build. I was going to say. Yeah. So cava have said they are 31% penetrated. So a 69% white space opportunity. Or at least this is based on how many stores they have and what they've publicly said they're targeting. And so you can calculate it from that. So 69% white space for cava, 50% white space for Chipotle, 77% white space for Sweetgreen and 50% white space for Wingstop. And, when we spoke to the Guzman guys, they were talking about an 80% white space opportunity in Australia. So you can sort of say how we're comparing more similar QSR here, quick service restaurants because they're growing at a similar right. They similar store count low thousands or in the hundreds. but probably most importantly the growth opportunity is really there. When we talk about valuation. So with that said Bryce, let's start comparing apples to apples. [

Bryce: [00:52:16] Yes. So let's start by comparing the restaurant economics and getting an understanding of firstly, the sales per store or average unit volume. Because many Gomez split it into drive thru. And then this strip stores, which the guys referred to earlier on in the episode that drive thrus deliver on average $6.1 million and their strips deliver $4.5 million. Now, if we compare that to the four, Wingstop is $2.9 million, kava 3.9, and then Sweet Grain and Chipotle line up in the four sweet grain 4.3 million and Chipotle 4.5. So pretty comparable.

Alec: [00:52:56] Yeah. Well, except for Guzman's drive the

Bryce: [00:52:58] Drive thru smashes it. Yeah.

Alec: [00:53:00] And to be clear, we should say all of those numbers that we're talking about have been converted back into Aussie dollars. So even in the US, we're comparing apples to apples. So that is revenue. But I guess let's look at profit as well. Now when we're looking at these restaurants, we're going to be talking about EBITDA throughout. So EBITDA earnings before interest, tax, depreciation and amortisation. The reason that we look at a bid for these restaurants, something I found out as we're preparing for this episode, is they all have different mixes of corporate stores and franchise stores. And, if you look at net profit, then you start factoring in things like leases, which corporate stores have, but franchise stores might not have. So to alleviate the franchise corporate mix and to just kind of try and get as apples to apples as possible. A lot of the analysts in this space will use EBITDA. Yeah. So that's what we're using as a proxy for profit. And when we come to profit, the more the EBITDA margins for Guzman, 21.6% for the Drive-Thru and 19.8% for the strip, how does that compare? So cava, Chipotle and Wingstop are all in 20% 24.8, 26.2, and 26.3%, respectively. Then sweet grains are 17%. So, I would say Guzman is right in the middle of that range. Yeah, but I think the one thing that is in Guzman's favour is if, we're not looking at margin, but we're actually just looking at straight cash. Well, EBITDA, Guzman's drive through 1.3 million, and that's higher than any of the other competitors. Chipotle is close to 1.2 million, but then covers one Sweet Grains. It 0.7 Wingstop at 0.8. So that's certainly something that Guzman is going to be hanging out on. 

Bryce: [00:55:02] So it's clear that some metrics there leading others, they're well and truly, well and truly amongst it. I guess that line then leads to the conversation around valuation, because for these, well, the four competitors are all listed. So we can compare against market cap. They offer price, for the IPO gives Guzman Y Gomez a market cap of $2.2 billion. Yeah. Now if we compare that to the four examples, Sweet grain is a $5.6 billion market cap. Cava is 13.4 billion, Wingstop is 17.1 billion, and Chipotle has a $131.6 billion market cap. 

Alec: [00:55:42] Not surprising. They've got, you know, more than ten times the amount still is. Yeah, that's the value that the market value. But the question becomes valuation itself. Now, we said we use a bit, as the sort of the profit metric here when we're talking about valuation to normalise the corporate stores for non-corporate stores and the effective leases and stuff like that. Confusingly, rather than using market cap in valuation, we're going to use enterprise value here. The reason being it accommodates if a company has heaps of cash or heaps of debt on the balance sheet, Guzman is about to do an IPO. It's about to raise a whole bunch of cash. So you want to take that out of the valuation? So enterprise value for Guzman goes from 2.2 billion market cap to 1.9 billion enterprise value. Putting this all together, the valuation metric that we're comparing here is enterprise value to FY 25 EBITDA okay. So bear with us here on that metric. Guzman is currently trading at 32.6 times for the Australian segment. Now, how does that compare to some of its QSR rivals that we're talking about here? Similar to Chipotle, Chipotle has 34.1 times, but it's a lot lower than the other three. We've been talking about Wingstop 58 times, kava 82 times, Sweetgreen 138 times. So that's kind of where Guzman sits relative to its peers on this enterprise value to FY 25 EBITDA metric. 

Bryce: [00:57:21] Sorry, I just want to be clear that we're not saying here that it's cheap or that this is a buy or sell in. Any way, shape or form. This is just to round out the conversation and I guess provide some colour to what the guys couldn't speak about before, and just show how it does compare to some of the the key competitors that they are pitching themselves against. 

Alec: [00:57:40] Yeah, yeah, yeah. But I think it's worth talking about. I think it's interesting. We're obviously excited about Guzman. I think I'm about to go in order. So. Yeah, but but, look, we want more brands to list on the Aussie market. We want more consumer facing and known Aussie brands to list on the Aussie market. It annoys us that all these companies get taken out by private money and get off the market. So forgive us if we get a little bit excited when one of our favourite food spots suddenly becomes an investment opportunity. 

Bryce: [00:58:15] That's it. Yeah, well, good luck to the guys. And again, thanks. We do give them our thanks for taking the time with the Equity Mates community today, but we'll wrap it there. We'll probably go home, order some. 

Alec: [00:58:28] Yeah, yeah. And we can't wait to see an American started Australian Mexican brand go back to America and take it. Take over America. 

Bryce: [00:58:39] Love to say it. All right, Ren, we'll leave it there. We'll pick it up in the next episode. 

Alec: [00:58:43] Sounds good.