Hundreds of jobs are at risk at Giraffe and Ed’s Easy Diner as the owner of both restaurant chains launched plans to close sites.
The operator behind both brands has announced its intention to enter a company voluntary arrangement (CVA) to close 27 of its 87 restaurants.
Rent reductions will be sought on a further 13 locations.
The business, which is owned by Boparan Restaurant Group (BRG), said that, although like-for-like sales had improved at the brands since they were acquired, several sites remained unprofitable.
Tom Crowley, chief executive of BRG, said: “We have been examining options for the two brands for some time and the CVA is the only option to protect the company.
“The combination of increasing costs and over-supply of restaurants in the sector and a softening of consumer demand have all contributed to the challenges both these brands face.”
Advisers from KPMG will oversee the process, as the proposal now goes to a creditor vote scheduled for March 21.
Will Wright, restructuring partner at KPMG, said: “This CVA seeks to address the cost of the company’s leasehold obligations across a number of unprofitable sites and, if successful, will put the business on a surer financial footing.
“Importantly, it constitutes one element of a wider financial and operational turnaround plan which, subject to the CVA’s approval, will see an injection of funding into the business from the company’s majority shareholder.”
BRG owns a number of other household names, including fish and chip restaurant Harry Ramsden and the upmarket Cinnamon Collection.
It is also the master franchisee for US brand Slim Chickens, which first opened in the UK last year.
BRG acquired Giraffe from Tesco in 2016, and later combined it with Ed’s Easy Diner, which it had bought in a pre-pack administration that same year.
The two brands form a combined entity, which in the most recently available accounts had annual turnover of £67.1 million.
In the same period, underlying losses came to £1.6 million.
Last year, several casual dining brands overhauled their businesses, with some closing sites, amid rising costs and tougher competition in the sector.
Prezzo, Jamie’s Italian, Byron, Carluccio’s, Gaucho and Gourmet Burger Kitchen all shut restaurants.