We have initiated coverage of Guzman y Gomez (GyG), a fast-food retailer offering Mexican-style cuisine that has exhibited strong like-for-like growth in recent years with a targeted store rollout in the Australian market.  Accelerating store openings combined with margin expansion are the key elements to this growth story. GyG’s Australian store productivity is industry leading and the scope to add more drive-thru stores is substantial. Moreover, fixed cost leverage and higher franchise royalty rates will support a doubling of EBITDA margins over the next four years.