Boparan Restaurant Group will pursue a Company Voluntary Arrangement (CVA) for its Giraffe and Ed's Easy Diner brands, with the planned closure of 27 sites.
If approved the proposal would see the two brands' 70-site strong portfolio reduce by more than a third, with rent reductions sought for a further 13 sites.
Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVA, said: "This CVA seeks to address the cost of the company's leasehold obligations across a number of unprofitable sites, and if successful, will put the business on a surer financial footing. Importantly, it constitutes one element of a wider financial and operational turnaround plan which, subject to the CVA's approval, will see an injection of funding into the business from the company's majority shareholder."
In February Boparan said it has appointed KPMG to explore "a number of options" for its underperforming brands.
Tom Crowley, chief executive of Boparan added: "We have been examining options for the two brands for some time and the CVA is the only option to protect the company.
"The combination of increasing costs and over-supply of restaurants in the sector and a softening of consumer demand have all contributed to the challenges both these brands face.
"The directors believe we have all the ingredients to drive a successful turnaround of the group and can confirm we have negotiated a comprehensive refinancing package to support that turnaround which will become available if we can secure the necessary support from our creditors."
The CVA proposal will need to attract 75% creditor approval.
The restaurant group as a whole operates several high street names including fish and chip chain Harry Ramsdens and Slim Chickens, which are not included in the proposal.
Food industry tycoon Ranjit Boparan acquired part of the Ed's Easy Diner chain in 2016. The deal saw Giraffe Holdings take on 33 branches of the struggling American-style casual dining outlet, leaving 26 in administration.Get The Caterer every week on your smartphone, tablet, or even in good old-fashioned hard copy (or all three!).