Franco Manca, a popular UK pizza chain, is set to close 16 restaurants across the country, including uncertainty over its Cheltenham location. This move reflects the mounting pressures on the UK hospitality industry and adds to the challenges facing the UK high street.
The chain has criticized what it calls “disproportionately high” taxes as a significant factor behind the closures. Key cost drivers include VAT rates, rising national insurance contributions, and increased minimum wage expenses. These financial strains are expected to lead to hundreds of job losses.
About half of the closures are reported to be in London. Other possible affected sites include Bishop’s Stortford, Bromley, Cheltenham, Didsbury, Glasgow, Hove, Lincoln, and Plymouth, though official confirmation on these locations is pending. The restaurant brand is owned by Fulham Shore, a private equity firm that also operates The Real Greek.
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Franco Manca, which launched in London in 2008, plans to enter a company voluntary arrangement (CVA) restructuring, allowing the company to renegotiate debts with creditors over time. Advisers Alvarez & Marsal were appointed in February, and there are reports suggesting a potential sale of the brand is under consideration.
While it is not yet confirmed which of the 70 Franco Manca restaurants will close, the restructuring may result in up to 225 job losses. Fulham Shore CEO Marcel Khan acknowledged that no restaurant is immune to the challenging economic environment despite their best efforts.
Khan attributed the difficulties mainly to rising national insurance, increased national living wages, and high VAT rates compared to other European countries. He also criticized the government’s refusal to extend business rates relief to restaurants, highlighting that while pubs received a £300 million emergency package, restaurants and hotels were excluded.
Khan stated, “These external cost pressures force us to ensure our business remains sustainable for long-term growth. This is why we have made the tough decision to undertake a CVA for Franco Manca, leading to the closure of some restaurants no longer sustainable in this cost climate.”
The company has committed to supporting affected employees throughout the transition.
In 2023, Japanese restaurant group Toridoll acquired Fulham Shore for £93 million. Meanwhile, other restaurateurs have voiced similar concerns. Leon’s founder John Vincent labeled the government as responsible for “killing” the restaurant sector through excessive taxation, lamenting the decline of the high street.
Responding to these criticisms, a government spokesperson highlighted ongoing reforms, including a £4.3 billion support package to moderate business rate increases, capping corporation tax at 25 percent, and measures to ease the cost of living. They also pointed out that raising the national minimum wage benefits over 200,000 young workers and that employer national insurance contributions are lower when hiring under-21s.