Cloud, Flexibility and Scalability Key Considerations for Restaurant Chain Expanding Internationally

Posted by Barney Beal, Content Director, NetSuite

When childhood friends and transplanted New Yorkers Robert Hazan and Steven Marks found themselves in Australia in 2002, they craved their favorite fast casual cuisine - Mexican. When they couldn’t find a decent plate of Mexican food anywhere, they quickly discovered they’d hit upon a hole in the restaurant market.

Thirteen years and 56 restaurants in Australia with another in Singapore and more on the way, the duo has successively filled that gap in the market, and also learned about some of the pain and frustration that goes along with rapid business expansion, particularly its business management software.

Guzman y Gomez Mexican Taqueria at Charlestown Square, NSW

Neither Hazan nor Marks, the co-founders of Guzman y Gomez (or GYG as the locals call it), had any background in the restaurant business. Hazan had worked for years in his family’s 90-year-old apparel business before marrying an Australian and moving. Marks, a hedge fund manager in between projects had come to visit the country. But they both realized an opportunity when they saw it.

“At that time, Mexican food was virtually non-existent in Australia and if there was any, it was poorly interpreted,” Hazan said. “Fast casual hadn’t really been done either. There was a big gap between fine dining and traditional fast food.”

The duo, who named the business after childhood friends, saw early success with a restaurant venture and established a plan to grow the business narrow and deep and keep the organization like a closely knit family. While many restaurant chains are in business to sell as many franchises as they can, Hazan said that GYG takes a cautious approach. The business is divided roughly 30/70 between company- and franchise-owned and GYG expects to have at least 75 restaurants in Australia by the end of the year.

Like any growing company though, GYG had its share of pain, particularly with its. Early on, of course, most of the business processes like accounting were very basic and manual. But as the company expanded, it quickly outgrew its MYOB accounting software. Financial reporting was delivered after the fact and that meant strategic planning was limited, creating reactive rather than proactive business decisions.

And, when GYG expanded into franchises, it needed more advanced reporting to meet its corporate banking requirements and the needs of its investors.

Flexibility and Scalability Provide the Right Foundation

Ultimately, after realizing it had outgrown its existing MYOB software, and determining that a system like SAP was too big, complex and expensive, GYG turned to NetSuite OneWorld, which has supported and grown with the business.

“The first big advantage was the multi-entity reporting,” Hazan said. “Previously, we managed our business as a bunch of separate accounts with no cross-entity visibility. As you grow at this rate it’s hugely important to have those entities visible.”

Additionally, with scale, GYG expanded beyond a restaurant company. It needed visibility into the supply chain and created a proprietary system that gave it insight into ingredients and supplies. GYG took over the construction of new restaurants and so found itself in the construction management business.

A flexible, scalable system was vital to allow the business to adapt to these changes, Hazan said. And, since NetSuite is in the cloud, it allowed the company to deploy quickly without massive overhead. To this day, finances are run by a five-person team, while increasing sales more than 50% each year, providing sophisticated financial reporting.

“The cloud was important because of speed,” Hazan said. “We got to a size with local software and it couldn’t perform. These data files are enormous. We had multiple people working on the system at same time and it’s not real time.”

GYG also discovered the importance and value of a business management system that was easily customized and one that works well with local partners. For instance, local NetSuite partners have built scripts to integrate NetSuite with GYG’s point-of-sale system which automatically generates royalty invoices each week, posts sales each day and records stock movements.

Roadmap for Growth

The Mexican restaurant chain founded by two New Yorkers, with an employee base that is largely Latin, has its sights set beyond Australia. There are big plans for international expansion where NetSuite OneWorld’s support for multiple currencies, languages and taxation rules will make a big difference, turning a market opportunity into an international business.

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If MYOB software can’t keep up with your growth, read how you can transform your business by switching to the NetSuite Cloud.


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