A leading Mediterranean restaurant group is poised to close approximately half of its UK outlets as it seeks a rescue agreement. The Karali Group, which owns the French brasserie chain Côte, is reportedly in advanced discussions with Fulham Shore, the parent company of The Real Greek, to acquire a portion of its restaurants.
According to Sky News, Karali plans to take over between 10 and 15 of The Real Greek’s 28 locations, signaling significant closures within the chain.
This development follows the downsizing of Franco Manca, The Real Greek’s sister brand, which has begun shuttering 16 stores across the UK, including Birmingham branches. The closures are part of a company voluntary arrangement (CVA), a legal insolvency process likely to affect around 225 jobs.
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Food blogger Gerry del Guercio of BiteTwice reflects on Franco Manca’s early popularity, noting its rise to trendiness and the eager crowds queuing for its pizzas in London.
Fulham Shore’s CEO, Marcel Khan, attributes these difficulties to a series of external cost pressures impacting the hospitality sector.
Industry consultant Reuben Pullan of CGA explains that rising energy and purchasing costs have put significant strain on chains like Franco Manca, making certain locations financially unsustainable. “It’s an unfortunate but necessary market correction amid rising operational costs,” he said.
Peter Backman, a food service consultant, agrees that these challenges stem more from increasing operational expenses than dwindling consumer demand. Properly managed CVAs, he notes, can eliminate underperforming outlets, allowing companies greater flexibility and a leaner business model.
Backman also points out that products like sourdough bread carry a premium perception, adding to costs but maintaining an aspirational value among customers.