Franco Manca Announces Closure of 16 Restaurants in Major Restructuring
Popular pizza chain Franco Manca is set to shut approximately 16 restaurants across the UK after being hit by what it describes as 'disproportionately high' taxes and escalating operational costs. This significant restructuring move places more than 200 jobs at risk, as the company grapples with financial pressures in the challenging hospitality landscape.
Parent Company Cites Unsustainable Business Environment
The closures are part of a company voluntary arrangement (CVA) restructuring process initiated by parent group The Fulham Shore, which also operates The Real Greek chain. Fulham Shore's chief executive, Marcel Khan, confirmed that a minority of Franco Manca sites have become 'no longer sustainable' due to external cost burdens. The company has not yet disclosed which specific locations among its roughly 70 restaurants will be affected.
Khan emphasised that even well-run restaurant businesses are not immune to the widely publicised pressures impacting the hospitality industry. He pointed to significant increases in national insurance and the national living wage, combined with a lack of business rates relief for restaurants and disproportionately high VAT rates in the UK compared to European counterparts.
Strategic Review and Future Implications
This decision follows a strategic review launched two months ago, where Fulham Shore hired advisers to explore options including a potential sale or restructure. The company continues to evaluate future strategies for its 28-strong Real Greek chain, indicating broader concerns across its portfolio.
Fulham Shore, which was acquired by Japanese restaurant group Toridoll with backing from investment firm Capdesia in 2023 for £93.4 million, now faces the tough task of repositioning its business for long-term viability. Khan stated, 'We have to make sure that we are putting our business on a sustainable footing for long-term growth and development.'
Industry-Wide Challenges and Employee Support
The closures highlight broader issues within the UK hospitality sector, where many operators struggle with rising wages, tax burdens, and regulatory costs. Khan expressed deep sadness over the closures but affirmed the company's commitment to supporting affected team members throughout the transition.
As Franco Manca navigates this difficult period, the restructuring serves as a stark reminder of the economic headwinds facing restaurant chains across the country. The outcome of the CVA process will be closely watched by industry analysts and stakeholders concerned about the sector's resilience in a challenging fiscal environment.
