Franco Manca, the popular UK pizza chain, has revealed plans to close 16 of its restaurants, including a location in Cheltenham, as part of a major restructuring effort amid mounting financial pressures on the hospitality industry. This latest round of closures highlights the ongoing challenges facing the British high street.
The privately owned group, backed by private equity firm Fulham Shore, pointed to “disproportionately high” taxes as key factors impacting their business. In particular, rising VAT rates, significant increases in national insurance contributions, and higher minimum wage costs have severely strained profitability. As a result, the closures are expected to lead to hundreds of job losses across the country.
Reports indicate that about half of the affected locations are in London, with others potentially including Bishop’s Stortford, Bromley, Didsbury, Glasgow, Hove, Lincoln, and Plymouth, although some details remain unconfirmed. Franco Manca currently operates around 70 outlets nationwide since its 2008 launch in London.
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Fulham Shore’s CEO, Marcel Khan, confirmed the company would enter a company voluntary arrangement (CVA), allowing negotiations with creditors to manage debts and support long-term sustainability. The group has enlisted advisers Alvarez & Marsal to oversee the process, which may also include selling the brand.
Khan stressed that no restaurant is immune to the harsh market conditions, attributing the difficulties to rising labor costs and excessive VAT compared to European counterparts. He also criticized the government’s failure to extend targeted business rate relief to restaurants, despite recent emergency aid for pubs.
Chancellor Rachel Reeves recently announced a £300 million support package for pubs to offset business rate hikes, but restaurants and hotels were notably excluded. Khan stated, “We have to put our business on a sustainable footing for long-term growth, which means reluctantly closing some restaurants that are no longer viable.”
The closures come after Japanese group Toridoll acquired Fulham Shore for £93 million in 2023. The news follows similar concerns voiced by other restaurant leaders, including Leon founder John Vincent, who recently accused the government of “killing” the restaurant sector through heavy taxation and regulation.
In response, a government spokesperson highlighted ongoing reforms, including a £4.3 billion support package to control bill increases, corporation tax cuts, red tape reduction, and measures to tackle cost of living pressures. They noted that raising the national minimum wage benefits young workers and that employer National Insurance Contributions are lower for those hiring under 21s.
Despite efforts to stabilize the sector, Franco Manca’s restructuring signals the tough road ahead for many hospitality businesses across the UK.