Up to 3,000 jobs are on the line as the owner of Frankie and Benny’s announced it was going to close 125 of its sites across the country.
The Restaurant Group said it was seeking approval from its landlords for a deal that would let it reduce the number of restaurants it runs, and negotiate lower rents for many of those left over.
Bosses said the hospitality industry was facing “well documented” problems, after the coronavirus pandemic forced many in the sector to close their doors.
If landlords approve the deal, known as a company voluntary arrangement (CVA), it will leave the firm’s leisure arm with about 160 sites.
It will also allow it to exit about 25 restaurants which have already been closed.
The Restaurant Group also owns pan-Asian chain Wagamama, and runs several pubs and concessions in airports. These will not be affected by the news, it said.
The stores that will close are “principally” Frankie and Benny’s restaurants, it added.
“The issues facing our sector are well documented and we have already taken decisive action to improve our liquidity, reduce our cost base and downsize our operations,” said chief executive Andy Hornby.
“The proposed CVA will deliver an appropriately-sized estate for our Leisure business to ensure we are well positioned despite the very challenging market conditions facing the casual dining sector.
“I would like to wholeheartedly thank all of my TRG colleagues for their continued understanding and extraordinary commitment during this unprecedented period.”
The British Property Federation said it had been talking to The Restaurant Group before it proposed the CVA, but it would be up to individual landlords to decide how to vote on the deal.
The federation’s chief executive Melanie Leech said: “These situations are never easy, particularly now for the retail and hospitality businesses on our high streets at the sharp end of the Covid-19 pandemic.
“Property owners, however, need to take into consideration the impact on their investors, including the millions of people whose savings and pensions are invested in commercial property, as they vote on any CVA proposal.”
The news comes as fashion chain Quiz has revealed it is placing the division that runs its 82 standalone stores into administration as part of a restructure to offload loss-making outlets and slash its rent bill.
The group said 822 of the 915 staff affected by the decision will remain with the group but that 93 jobs are at risk.