Prevailing from the Mexican stand-off – Page 2 of 2 – StartupSmart
Customer confusion
Perhaps inevitably, given his enthusiasm to introduce something new to the Sydney culinary landscape, there were teething problems.
“We overestimated the knowledge that people would have for the food,” Marks admits. “People would walk in and see the burrito and ask why rice was in it. They were used to the kind of Mexican food they’d had up until then.”
The initial consumer confusion, coupled with inefficient business operations, caused GYG to lose money in its first two years. Marks, who strikes you as a source of perpetual hyperactive energy, set about making changes – some small and some more significant.
“We gave away thousands of free burritos to customers and journalists,” he says. “We figured we had to get the product in people’s hands so that they understood it. We were very proactive in making other businesses aware of us too.”
“We did small things to increase our lunchtime business by 100%, such as use charismatic Latin girls with fliers and started to let people choose their filling and salsa. We spent hundreds of thousands of dollars on our menu boards and positioned them so that people could see them properly.”
“We had to make it simple. We added hard shell tortillas because everyone asked for them but everything was still fresh to order and the customer experience improved.”
Marks also urged customers to send him a ‘postcard from Mexico’ – feedback forms that could be left at each outlet. He claims to still read every single piece of customer feedback, good or bad.
Getting operations into shape
Crucially, Marks brought on an operations manager to help get the business into shape.
“I was afraid that the outlets would be understaffed so we ended up overstaffed – there were sometimes more people in the kitchen than in the restaurant,” he explains. “There was a lot of work in making sure our operations were tight.
“We spent a lot of time getting the right, talented people on board. I need to see that excitement too though – if they don’t love what they do, I don’t work with them. If I do work with them, they become like an extension of the family.”
Expanding the brand
Marks decided to expand the family to six stores across Sydney, with the Queensland rights sold to two entrepreneurial brothers, who opened the first Brisbane outlet opening in December last year. Revenue now tops $10 million, with more than 140 people employed.
Franchising the business was a wrench for Marks – “I felt that I needed to go to franchisee therapy because it was my baby that I was letting go,” he says – but it was necessary to help the business meet its expansion goals.
There will be 10 new GYG stores in the next year, with the brand set to be launched in Melbourne.
“I have to make sure that I like franchisees, that they are ethical,” says Marks. “I want to celebrate my success with people I like. I need to make sure that they can money too, of course.”
Marks says that GYG’s franchise operations are “pretty advanced”, with detailed inventory systems and even e-learning so that potential franchisees can be taught how to roll a burrito over the internet.
Future vision
Marks’ vision is to get the restaurants to average $2 million revenue and have 80 stores across Australia within the next four years. Having gone through the pain of starting up, Marks is now ready for the pleasure.
“If you do it just for the money, you won’t get anywhere – you have to love it,” he says. “Cashflow will be tight regardless of what you do and you always need to raise more money than you think. You need a detailed idea and you need to surround yourself with smart people.”
“Ultimately though, I can walk into my restaurant and no one can tell me what to do. I can walk into GYG and know it is exactly how I wanted it to be. That’s an awesome feeling. It’s a feeling I always wanted.”