The owner of Gourmet Burger Kitchen has announced it will seek a Company Voluntary Arrangement (CVA) for the struggling brand, with 17 restaurants earmarked for closure.
Famous Brands has appointed accountants Grant Thornton to pursue the CVA, as Gourmet Burger Kitchen becomes the latest of a number of restaurant groups to use the mechanism in 2018.
The potential closures will impact 250 jobs and the company has said "every effort will be made" to redeploy staff should they choose. The closures would leave the group with a 68-site portfolio.
Recent months have already seen the cutting of head office costs and overheads as well as the refurbishment of 30 restaurants and a rebrand.
Derrian Nadauld, managing director of Gourmet Burger Kitchen, 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.
"We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. This will provide greater security for our staff, suppliers, landlords and customers. GBK is a fantastic brand and with the strength of our core estate, we are confident the Company will emerge stronger from this process."
Matthew Richards, director at Grant Thornton, said that no restaurants will close immediately and employees and suppliers will continue to be paid in full.
Shareholders have been advised to exercise caution in the trading of Famous Brands shares while the process is ongoing.
Gourmet Burger Kitchen recorded an operating loss of £2.24m in the 22 weeks ending 29 July 2018, with like-for-like sales down 10.6%.
In August Darren Hele, Famous Brands chief executive, said property rates, labour and food costs were all having an impact as the brand "unperformed the board and management's expectations".