Franco Manca has announced the closure of 16 restaurants across the UK due to high taxes and lack of business rates relief, putting over 200 jobs at risk. The closures, approved through a CVA, include the original Brixton location and several branches in London and other major cities.
Franco Manca , the popular sourdough pizza chain, has revealed the complete list of 16 restaurants it will be closing across the UK, impacting over 200 jobs.
The closures stem from financial difficulties attributed to what the company describes as 'disproportionately high' taxes and a lack of adequate business rates relief within the United Kingdom. This decision follows an announcement last month indicating that a portion of its 70 restaurants would be affected, and has now been solidified with creditor approval of a Company Voluntary Arrangement (CVA).
The CVA, supported by over 90 percent of creditors, is a strategic move designed to facilitate debt repayment and restructure the business for future stability. A significant concentration of the closures will be felt in London, with eight branches set to cease operations. This includes the historically significant original Franco Manca restaurant in Brixton, which has been a pizzeria site since 1986 and was acquired by the founders of the chain in 2008.
Other London locations slated for closure are situated in Battersea, Broadway Market, Chiswick, Kilburn, New Oxford Street, Stoke Newington, and Tottenham Court Road. Beyond the capital, restaurants in Bishop's Stortford, Bromley, Cheltenham, Didsbury, Glasgow, Hove, Lincoln, and Plymouth will also be closing their doors. The impact of these closures extends beyond the immediate job losses, representing a contraction of a brand that has become a staple in many UK communities.
The situation highlights the broader challenges facing the hospitality sector, particularly concerning the financial burdens imposed by the current economic climate. The news of the Franco Manca closures arrives shortly after its parent company, Fulham Shore, placed its sister brand, The Real Greek, into administration. While The Real Greek was quickly acquired by the Cote owner Karali Group, the acquisition was accompanied by the announcement of nine restaurant closures within that chain.
Marcel Khan, Chief Executive of Fulham Shore, expressed gratitude for the creditor support and reaffirmed confidence in the Franco Manca brand, emphasizing its strong heritage and loyal customer base. He stated that the CVA will enable the business to establish a firm financial foundation and focus on enhancing its customer experience and overall performance.
Paul Berkovi, Managing Director of Alvarez & Marsal, echoed this sentiment, noting the constructive engagement among stakeholders and the importance of the CVA in enabling Franco Manca's financial restructuring and operational transformation. The company's journey began with the acquisition of Franco's, a pre-existing pizzeria in Brixton, by Giuseppe Mascoli and Bridget Hugo in 2008, and subsequently expanded under the ownership of The Fulham Shore since 2015, which was later acquired by Japanese food conglomerate Toridoll Holdings.
The current challenges are attributed to a combination of factors, including increases in national insurance, minimum wage, and the UK's 20 percent VAT rate, which Mr. Khan argues disproportionately affect the hospitality industry. The decision to pursue a CVA followed a period of strategic review, including consideration of potential sale or restructuring options.
Fulham Shore's revenue experienced a 5.4 percent year-on-year decline, with both sales and profits categorized as 'bad' in recent filings, further underscoring the financial pressures facing the group
Franco Manca Restaurant Closures CVA Fulham Shore The Real Greek UK Hospitality Taxes Business Rates Brixton Job Losses
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