Gourmet Burger Kitchen (GBK) has closed one site with five more under threat after reporting operating losses of £7.8m in the 12 months ended 28 February 2018.
A spokesman for the 106-site restaurant group said: "We've identified six distressed sites, one of which has been closed. We are working to find solutions to the remaining five and one of the options might be closure, but we haven't made any firm decisions."
GBK, which is owned by South African franchiser Famous Brands, revealed that like-for-like sales decreased by 6.8% in the period, although UK sales increased by 4.9%.
Darren Hele, Famous Brands CEO, said: "The UK foodservices sector continued to face difficulties, with businesses subjected to notably higher property rates and increased labour and food costs. While the GBK operation made some progress in adapting to the challenges experienced in that economy and industry, and notwithstanding operational improvements reported in the period, impairments recognised in GBK considerably reduced the carrying value of the business."
Famous Brands acquired the burger chain in 2016 for £120m.
Launched in 2001 in south London, GBK was founded by three New Zealanders and acquired by the YellowWood Group in 2010.