The Restaurant Group (TRG) has launched a Company Voluntary Arrangement (CVA) that would see the closure of 125 sites and improved rental terms, if approved by stakeholders.
The CVA applies to the group's ‘leisure' estate and the principal brand affected will be Frankie & Benny's, which currently has 226 sites. The group's Chiquito, Coast to Coast and Garfunkel's brands will also be also impacted, but the CVA will see no change to Wagamama sites, airport concessions or pub operations, which sit outside the leisure portfolio.
If approved, the CVA will leave TRG's leisure portfolio with 160 sites, with improved rent or lease terms agreed in relation to 85 of these. It has previously been estimated that 3,000 jobs could be at risk.
The CVA will also see the group exit leases on a further 25 previously closed sites, which it has said will help ensure "a long-term sustainable business for all stakeholders".
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. I would like to wholeheartedly thank all of my TRG colleagues for their continued understanding and extraordinary commitment during this unprecedented period."
TRG consulted with the British Property Federation while drawing up the proposal. Chief executive Melanie Leech added: "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."
TRG acquired Wagamama for £559m in 2018.
A vote on the CVA proposal is scheduled for 29 June. The CVA will not seek to compromise claims of any creditors other than certain landlords, and inter-company liabilities.