4 million takeover of Fulham Shore in 2023, as widely reported by major media outlets. Fulham Shore is the holding company that owns both The Real Greek and Franco Manca. However, cost pressures began to mount almost immediately.
The Independent revealed that Toridoll subsequently submitted a notice of intent to appoint administrators for The Real Greek, a legal filing that provides a brief moratorium to explore rescue options. The chain later entered administration, The Independent confirmed, a process that allows a company to restructure or sell itself with protection from creditors. In a swift move, the Karali Group negotiated a purchase of the business out of administration, according to The Independent.
In recent years, high levels of inflation in the UK, driven by rising energy and food prices together with increase in labour costs resulting from rises in the minimum wage, have created a more challenging operating environment for the hospitality industry than initially anticipated.
The rescue agreement, as reported, is structured to safeguard 19 of The Real Greek's 28 outlets, representing almost 70% of its estate. The remaining nine restaurants are scheduled for permanent closure, The Independent added, marking a significant downsizing. The chain’s central kitchen will also be shut down, according to The Independent, a move that not only reduces operational overhead but also raises questions about future supply chains.
As a consequence, 151 members of staff are to be made redundant, The Independent reported, while approximately 358 jobs will be protected. The human cost of the restructuring is substantial, though many livelihoods are preserved. The financial strain that drove this outcome has been described in stark terms by Toridoll.
The deterioration in the economic environment has had a more significant impact on the Greek restaurant brand The Real Greek than on the Franco Manca business.
In a statement, the company explained that in recent years, high levels of inflation in the UK, driven by rising energy and food prices together with increases in labour costs resulting from minimum wage rises, have created a more challenging operating environment for the hospitality industry than initially anticipated. It specifically noted that the deterioration in the economic environment had a more significant impact on The Real Greek than on the Franco Manca business. These comments highlight the uneven pressures within the group.
The UK hospitality industry has been grappling with a confluence of challenges: the highest inflation rates in decades, energy costs that have soared, and a tight labour market pushing up wages, all of which have squeezed margins and forced many operators to reconsider their portfolios. The Daily Express, citing people familiar with the negotiations, introduced a note of caution, reporting that the Karali Group might acquire only between 10 and 15 of the sites, potentially closing around half the chain. This discrepancy suggests that the final shape of the rescued business is not yet settled.
The transaction will ensure that the business is placed on a more sustainable footing for the future, while allowing The Fulham Shore to focus its energy and investment behind Franco Manca and its significant growth potential. We’re pleased to be handing it over to Karali with real momentum. We will now do everything we can to support colleagues affected by this process and believe that both the brand and its teams will be in very good hands as the business moves into its next chapter.
Marcel Khan, chief executive of Fulham Shore, expressed that the transaction would ensure the business is placed on a more sustainable footing for the future, allowing The Fulham Shore to focus its energy and investment behind Franco Manca and its significant growth potential. He added that the handover to Karali is being done with real momentum and that the company will support affected colleagues, believing the brand and its teams will be in good hands under new ownership. Paul Berkovi, managing director of Alvarez & Marsal, the administrators, stated that his firm worked closely with The Real Greek’s management team and is pleased to have completed a transaction that secures a future for a restaurant group enjoyed by diners over many years.
He emphasized that the immediate focus as administrators will be to provide a smooth transition and to support employees affected by site closures, and expressed gratitude to all stakeholders for their constructive engagement. Meanwhile, multiple credible media sources have confirmed that Franco Manca is undergoing a Company Voluntary Arrangement, a form of insolvency that allows a company to renegotiate debts with creditors, shutting 16 outlets and resulting in 225 job losses. This separate restructuring illustrates the broader difficulties in the casual dining sector, where rising costs and shifting consumer habits have forced operators to shrink their footprints.
The Independent described The Real Greek as the latest UK restaurant chain to face an uncertain future due to soaring cost pressures. The situation mirrors a wider industry trend that has seen numerous well-known brands enter some form of insolvency in recent years. It remains unknown which specific locations will close, how the central kitchen’s closure will impact supply chains and menus for remaining restaurants, or when the closures will take effect.
The deal offers a lifeline, but the reduced estate and the closure of its central kitchen will inevitably change the brand's operational model. No timeline has been provided for the closures, and the impact on the supply chain remains a key question. Khan indicated that the divestiture allows the parent group to redirect focus and investment toward Franco Manca, which he said has significant growth potential, suggesting that for now, the strategy is to bet on the pizza brand while offloading the Greek concept.