Franco Manca Announces Major Restructuring with 16 Restaurant Closures
Popular pizza chain Franco Manca is set to shut approximately 16 restaurants as part of a significant restructuring effort, putting around 225 jobs at risk. The move comes as parent company The Fulham Shore, which also operates The Real Greek chain, cites challenging economic conditions and high UK taxes as key factors driving the decision.
Parent Company Points to "Disproportionately High" UK Taxes
The Fulham Shore has partially attributed the closures to what it describes as "disproportionately high" UK taxes and a lack of business rates relief for the restaurant sector. Company executives have stated that a minority of Franco Manca's sites have become "no longer sustainable" under current economic pressures.
Fulham Shore chief executive Marcel Khan confirmed that the company will launch a company voluntary arrangement (CVA) restructuring process specifically for the Franco Manca business. This formal insolvency procedure allows companies to negotiate with creditors while continuing to trade.
Strategic Review Preceded Restructuring Decision
The announcement follows a two-month strategic review during which Fulham Shore hired advisers to explore various options, including a potential sale or restructuring of the business. The company has not disclosed which specific locations among Franco Manca's roughly 70 restaurants will be affected by the closures.
Mr Khan elaborated on the challenges facing the hospitality sector, noting: "Even restaurant businesses that are doing all the right things from a customer and operational perspective are not immune to widely publicised pressures impacting the hospitality industry."
Multiple Economic Pressures Cited
The company highlighted several specific economic factors contributing to the difficult decision:
- Significant increases in national insurance contributions
- Rising national living wage requirements
- Lack of business rates relief for restaurant businesses
- Higher VAT rates in the UK compared to European counterparts
"As a result of these external cost pressures, we have to make sure that we are putting our business on a sustainable footing for long-term growth and development," Mr Khan explained.
Future of The Real Greek Chain Under Review
While Franco Manca undergoes restructuring, Fulham Shore continues to review future options for its 28-strong The Real Greek restaurant chain. The parent company was acquired by Japanese restaurant group Toridoll, with backing from investment firm Capdesia, in 2023 for £93.4 million.
Mr Khan expressed regret about the closures, stating: "We are deeply saddened by the closures of a minority proportion of our restaurants, and will support our affected team members throughout this process in every way that we can."
The restructuring represents a significant development in the UK hospitality sector, which has faced numerous challenges in recent years including rising costs, changing consumer habits, and post-pandemic recovery difficulties.
