Franco Manca to close 16 restaurants after creditors approve CVA, 225 jobs affected

Key facts

• Franco Manca will close 16 of its 70 restaurants, affecting about 225 jobs.
• The closures follow approval of a company voluntary arrangement (CVA) by over 90% of voting creditors.
• Parent company The Fulham Shore cited 'disproportionately high' UK taxes and no business rates relief for restaurants.
• Sister brand The Real Greek was placed into administration last week and acquired by Karali Group, with nine of its 28 restaurants closing.
• Fulham Shore was bought by Japanese group Toridoll and investment firm Capdesia in 2023 for £93.4 million.
• Nine of the closing Franco Manca sites are in London.

Restructuring plan approved as 16 sites face closure

Franco Manca, the popular sourdough pizza chain, will shut 16 of its restaurants after creditors voted overwhelmingly to approve a restructuring plan. The parent company, The Fulham Shore, confirmed that the company voluntary arrangement (CVA) received support from more than 90 percent of voting creditors, clearing the way for the closures. Approximately 225 jobs are expected to be lost as a result. The decision marks a significant contraction for the chain, which currently operates 70 sites across the United Kingdom. The affected venues, including nine in London, were deemed “no longer sustainable” due to what the company described as “disproportionately high” UK taxes and a lack of business rates relief for restaurants. The CVA process allows the business to exit unprofitable leases and restructure its finances.

Parent company cites tax burden and rates relief gap

The Fulham Shore, which also owns the Greek-inspired chain The Real Greek, has been grappling with a challenging operating environment. In a statement, the company pointed to the UK’s tax regime as a primary factor behind the closures, noting that restaurants have not received the same business rates relief extended to other sectors. The affected Franco Manca sites were described as “no longer sustainable” under current conditions. The move follows last week’s administration of The Real Greek, which was swiftly acquired by Karali Group, the owner of the Cote brasserie chain. That deal nonetheless resulted in the closure of nine of The Real Greek’s 28 restaurants. The back-to-back restructuring actions underscore the financial strain on Fulham Shore’s portfolio.

CEO and restructuring adviser comment on the vote

Marcel Khan, chief executive of Fulham Shore, expressed gratitude for creditor support, saying: “We are grateful for the support shown by our creditors today. Franco Manca is a fantastic brand with a strong heritage and loyal customer base. With this agreement in place, we will put the business back on a firm footing and press ahead with strengthening our customer offer and performance.” Paul Berkovi, managing director of Alvarez & Marsal, the restructuring firm advising on the process, added: “Today’s vote saw a significant majority of the company’s creditors support the CVA, reflecting constructive engagement across stakeholders. Against a challenging backdrop for the sector, this is an important step for Franco Manca, enabling the business to complete its financial restructuring and secure the platform for its operational transformation.”

Timeline: from acquisition to restructuring

The Fulham Shore was acquired by Japanese restaurant group Toridoll, with backing from investment firm Capdesia, in 2023 for £93.4 million. At the time, the deal was seen as a bet on the growth potential of Franco Manca and The Real Greek. Less than two years later, both brands are undergoing significant downsizing. The CVA proposal was first announced last month, and the creditor vote took place shortly thereafter. The approval threshold of over 90 percent of voting creditors indicates broad support among landlords and other creditors for the restructuring plan, which allows Franco Manca to exit onerous leases while preserving the majority of its estate.

Broader pressures on the UK casual dining sector

Franco Manca’s restructuring is the latest in a series of contractions across the UK casual dining market. Rising food and energy costs, combined with higher wages and national insurance contributions, have squeezed margins. Many chains have sought CVAs or entered administration as a result. The lack of business rates relief for restaurants has been a particular grievance for the sector. While retail properties received significant relief during the pandemic, hospitality venues have argued they were left at a disadvantage. Franco Manca’s closure list includes sites in high-cost areas where rents and rates are especially burdensome.

Outlook: a slimmed-down chain aims for stability

With the CVA approved, Franco Manca will now focus on its remaining 54 restaurants. The company has indicated that it intends to “strengthen its customer offer and performance” under the restructuring plan. However, the closure of 16 sites and the loss of 225 jobs represent a stark retreat from the expansion trajectory envisioned at the time of the Toridoll acquisition. The fate of the closed restaurants remains unclear; some may be taken over by other operators, while others could be repurposed. For now, Franco Manca’s leadership is betting that a smaller, more financially stable footprint will allow the brand to weather the sector’s headwinds.

Analysis: a cautionary tale for private equity-backed restaurant groups

The Franco Manca case highlights the risks inherent in leveraged buyouts of restaurant chains, particularly when macroeconomic conditions shift. The 2023 acquisition by Toridoll and Capdesia loaded Fulham Shore with debt, leaving it vulnerable to rising costs and changing consumer habits. The CVA, while providing a lifeline, also imposes a ceiling on future growth. For the UK’s dining industry, the episode serves as a reminder that even beloved brands are not immune to the pressures of inflation, tax policy, and shifting consumer preferences. As Franco Manca retrenches, the broader question remains: which other chains will follow?

The bottom line

• Franco Manca will close 16 restaurants, cutting about 225 jobs, after creditors approved a CVA with over 90% support.
• Parent company The Fulham Shore blames 'disproportionately high' UK taxes and lack of business rates relief for the closures.
• Sister brand The Real Greek was placed into administration last week and acquired by Karali Group, with nine closures.
• Fulham Shore was bought by Toridoll and Capdesia in 2023 for £93.4 million, a deal now under strain.
• The restructuring leaves Franco Manca with 54 sites, aiming for operational stability amid sector-wide challenges.
• The case underscores the vulnerability of private equity-backed restaurant groups to economic headwinds.