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Mexican Fast Food Chain Sued Over US Closures
25 May
Summary
- US workers sue Guzman y Gomez for insufficient pay and notice.
- Chain closed all US stores abruptly after failed expansion.
- Class action seeks 60 days' pay for over 500 affected employees.
US workers have launched a class action lawsuit against the Australian fast food chain Guzman y Gomez (GyG) following the immediate closure of its US stores. Filed in Illinois federal court, the suit claims that GyG failed to provide adequate pay and notice to staff when it abruptly exited the US market. Employees reportedly learned of the closures via an internal message on May 21, 2026, stating all restaurants were closing that day.
The lawsuit asserts that GyG violated federal and state laws requiring 60 days' advance written notice for mass layoffs. Affected employees, estimated by the law firm to be over 500, are seeking pay and benefits for up to 60 days. The legal action names GyG's US entity but argues that the US and Australian operations function as a single employer, potentially extending liability.
GyG, a fast-growing chain in Australia, faced significant losses with its US expansion plans. The US market, already saturated with Mexican food competitors like Chipotle, has been a challenging landscape for Australian chains. Analysts have dubbed it a "graveyard" for such ventures, citing past failures. GyG's eight US locations, all in the Chicago area, are now permanently closed.
