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Frankie and Benny’s owner to close 35 more restaurants

Frankie and Bennys

The owner of Frankie and Benny's and Chiquito has announced the closure of up to 35 more restaurants.

The Restaurant Group blamed the move on rising operating costs and a reduction of customer spending.

The company operates around 410 restaurants and said it plans to reduce its estate by 30 percent by closing loss-making locations by next year.

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However, its popular Wagamama restaurant chain will not be affected.

It comes after The Restaurant Group announced plans to close 250 locations by 2021, which will largely affect staff at its Frankie & Benny's, Chiquito, and Food & Fuel brands.

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The company's management has come under fire from investors demanding change after a two-thirds drop in share value last year.

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The group, which employs 18,000 people in the UK, announced its pre-tax loss for 2022 increased to £86.8 million from £35.2 million the previous year.

The group's chairman, Ken Hanna, stated last year was "challenging" for the casual dining sector.

This is because businesses had to deal with rising costs after being closed down during the pandemic.

The company added worker shortages, wage increases, and rising ingredient costs had made trading "tough," according to the company.

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The Restaurant Group also said "cost-of-living pressures on the UK consumer" had "somewhat impacted" it.

Chief executive Andy Hornby said the company had a "clear plan" to increase its margins over the next three years and "deliver significant value for all our stakeholders".

According to Russ Mould, investment director at AJ Bell, The Restaurant Group is under pressure from larger investors to divest some of its brands.

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He added that selling the Frankie and Benny's and Chiquito chains could benefit the overall business by allowing it to focus on Wagamama, "which is clearly a restaurant brand with genuine appeal."

He said: "Rename the business as Wagamama, clear out the rest, and you would have a streamlined and focused operation which might have more appeal to investors."

Source: BBC

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