The Restaurant Group, which owns chains including Frankie & Benny’s, has proposed a CVA involving the permanent closure of around 125 locations.
The group has identified around 210 restaurants in its leisure estate that are either underperforming, on unfavourable lease terms, or not expected to generate profitable returns in future.
Of these, 85 will be subject to a reduction in rental costs and revised lease terms. Around 65 will be unaffected.
If the CVA proceeds, the group will continue to trade from around 160 sites.
The group, which has appointed AlixPartners to oversee the CVA proposal, said the affected estate mostly consists of Frankie & Benny’s restaurants.
The CVA will also include a mechanism to exit around 25 locations that had previously closed.
The process will not affect the group’s Wagamama restaurants, airport concessions or pub operations.
Chief executive Andy Hornby said: “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.
“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.”
Melanie Leech, chief executive of the British Property Federation, 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.”
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