Mexican fast-food chain Guzman Y Gomez under fire for allegations of discrimination
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Following the rise and expansion of fast-food chains in Australia, Guzman y Gomez seemed to have carved out a special place in our hearts with their unique Mexican cuisine.
However, recent allegations about the company's practices and comments made by its leadership have rocked the familiar restaurant chain.
The allegations of discrimination, ageism, and even fat-shaming emerged from a recent court filing in California, where the company's ambitious plan to expand into the United States hit a roadblock.
A group of fast food executives, including Greg Creed, who provided consulting services to Guzman Y Gomez, lodged a claim against the company for a staggering $152 million.
The consultants accused the leadership team of Guzman Y Gomez, founded in Sydney in 2006 by Steven Marks and Robert Hazan, of harbouring prejudice against individuals over 40.
They alleged that during the opening of a store in Illinois earlier this year, a company marketing officer expressed dissatisfaction with the number of older customers coming into the restaurant, stating that they were 'not a great face of the brand'.
Mr Marks also reportedly said: 'I'm happy to serve them, but I want to see young people in the restaurant.'
The controversy deepened when the same marketing officer allegedly made a derogatory comment about overweight customers, stating, 'We don't give T-shirts to fat people.'
This comment was reportedly made in the presence of CEO Steven Marks, who did not intervene or correct the statement.
Marks himself has been accused of making discriminatory comments about the age of some members of the consulting team. He allegedly expressed a preference for younger, 'energetic' employees, casting doubt on the ability of older consultants to 'take the brand to the next level'.
The consultants also raised concerns about the fast food chain's logo, which features the faces of two men, supposedly Mr Guzman and Mr Gomez.
The consultants warned that the logo could be perceived as racist in US markets.
In a shocking twist, Marks allegedly admitted that the backstory of the brand and logo was entirely fabricated.
According to the filing: 'Mr Marks ultimately admitted that the entire story behind the history of GYG's brand and logo was completely fabricated and false.'
'He never met his partner in New York; the names and images used were not based on his purported Mexican friends as a young child who inspired his love of Mexican cuisine; he never ate dinner at the home of a Mexican family; the images used by GYG US were simply drawings created to culturally appropriate Mexican cuisine solely for a marketing benefit in Australia.'
'Even the names “Guzman” and “Gomez” were completely fabricated for marketing benefit.'
The lawsuit was eventually settled with a payment of $1.5 million to the six complainants, along with the buyback of shares they purchased one-and-a-half years ago.
In response to the allegations, Guzman Y Gomez stated that in their 17-year history, no customer had ever lodged a complaint.
According to the company: 'GYG, Fuller 74 LLC and the other parties settled on a confidential basis and as such we are unable to comment further on the claims.'
'GYG moved to dismiss the claims because we did not agree that they had any merit. Recognising the investment of time, money and distractions involved in pursuing litigation in the United States, the parties made the decision to move on and settle the claims.'
They also defended the backstory of their logo, stating that while the names and faces 'may not exactly resemble those people's likeness', the story of the company's inception was real.
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However, recent allegations about the company's practices and comments made by its leadership have rocked the familiar restaurant chain.
The allegations of discrimination, ageism, and even fat-shaming emerged from a recent court filing in California, where the company's ambitious plan to expand into the United States hit a roadblock.
A group of fast food executives, including Greg Creed, who provided consulting services to Guzman Y Gomez, lodged a claim against the company for a staggering $152 million.
Mexican fast food chain Guzman Y Gomez is under fire for alleged discriminatory practices. Image sources: DoorDash, Guzman Y Gomez.
The consultants accused the leadership team of Guzman Y Gomez, founded in Sydney in 2006 by Steven Marks and Robert Hazan, of harbouring prejudice against individuals over 40.
They alleged that during the opening of a store in Illinois earlier this year, a company marketing officer expressed dissatisfaction with the number of older customers coming into the restaurant, stating that they were 'not a great face of the brand'.
Mr Marks also reportedly said: 'I'm happy to serve them, but I want to see young people in the restaurant.'
The controversy deepened when the same marketing officer allegedly made a derogatory comment about overweight customers, stating, 'We don't give T-shirts to fat people.'
This comment was reportedly made in the presence of CEO Steven Marks, who did not intervene or correct the statement.
Marks himself has been accused of making discriminatory comments about the age of some members of the consulting team. He allegedly expressed a preference for younger, 'energetic' employees, casting doubt on the ability of older consultants to 'take the brand to the next level'.
The consultants also raised concerns about the fast food chain's logo, which features the faces of two men, supposedly Mr Guzman and Mr Gomez.
The consultants warned that the logo could be perceived as racist in US markets.
In a shocking twist, Marks allegedly admitted that the backstory of the brand and logo was entirely fabricated.
According to the filing: 'Mr Marks ultimately admitted that the entire story behind the history of GYG's brand and logo was completely fabricated and false.'
'He never met his partner in New York; the names and images used were not based on his purported Mexican friends as a young child who inspired his love of Mexican cuisine; he never ate dinner at the home of a Mexican family; the images used by GYG US were simply drawings created to culturally appropriate Mexican cuisine solely for a marketing benefit in Australia.'
'Even the names “Guzman” and “Gomez” were completely fabricated for marketing benefit.'
The lawsuit was eventually settled with a payment of $1.5 million to the six complainants, along with the buyback of shares they purchased one-and-a-half years ago.
In response to the allegations, Guzman Y Gomez stated that in their 17-year history, no customer had ever lodged a complaint.
According to the company: 'GYG, Fuller 74 LLC and the other parties settled on a confidential basis and as such we are unable to comment further on the claims.'
'GYG moved to dismiss the claims because we did not agree that they had any merit. Recognising the investment of time, money and distractions involved in pursuing litigation in the United States, the parties made the decision to move on and settle the claims.'
They also defended the backstory of their logo, stating that while the names and faces 'may not exactly resemble those people's likeness', the story of the company's inception was real.
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