Gourmet Burger Kitchen has earmarked 17 stores for closure as part of a company voluntary arrangement aimed at turning the troubled business around.
The company, owned by South African group Famous Brands, previously announced it would take a £47.2m hit due to sustained under-performance, and has recorded heavy losses in the past.
Famous Brands brought in Grant Thornton to advise GBK on kicking off a CVA process.
Creditors will vote on the proposals at a meeting on 9 November, and all restaurants will continue to trade as usual until then. The firm’s plans put 250 jobs at risk.
GBK’s managing director Derrian Nadauld said: “Given the challenging UK casual dining environment and over-rented UK restaurant estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.”
GBK would be the latest in a long line of so-called casual dining chains to fall into financial difficulties.
In the past year, Carluccio’s, Gaucho, Hummus Bros, Prezzo, Byron and Jamie’s Italian have been forced to restructure in a bid to stay solvent.
Alex Probyn, president of UK expert services at real estate adviser Altus Group, said: “There has been huge growth in the casual dining market, with restaurant numbers up 15 per cent overall since 2010.
“The race for space has pushed up rents impacting on rateable values. Extra tax for business rates coupled with rising food prices and staff costs through increases in both the national and minimum wages are creating a potentially lethal cocktail as margins are squeezed.”
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