Little Chef is reportedly preparing to close 70 of its restaurants and cut 600 staff.
The Sun reported that company bosses would break the news to staff today.
The move would mean that more than 40% of Little Chef's outlets would be affected.
Little Chef went into administration in 2007 but was rescure by private equity firm RCapital, which kept 193 of the 235 restaurants open.
Caterer and Hotelkeeper attempted to contact Little Chef to verify the reports, but no one was available to comment.
The company announced last year that it would invest £30m in revamping its sites, and expand by more than 55 sites over the next five years.
By Neil Gerrard
E-mail your comments to Neil Gerrard here.
If you have something to say on this story or anything else join the debate at Table Talk - Caterer's new networking forum. Go to www.catererandhotelkeeper.com/tabletalk
Looking for a new job? Find your next job here with Catererandhotelkeeper.com jobs