AN iconic UK fast food chain has collapsed into administration and announced plans to close restaurants and cut jobs.
Leon, which is famous for its halloumi burgers and waffle fries, currently has 52 branches across the UK.
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Leon has been warning of possible closures after it revealed losses of £8million last yearCredit: Leon
It is understood the company has not yet decided exactly how many restaurants will need to close or how many workers will be affected.
It currently has 31 company restaurants and 21 franchise-owned locations.
The company said it will try to redeploy staff to other restaurants, offer redundancy where that’s not possible, and has set up a route for affected employees to apply for jobs at Pret A Manger.
The chain had previously warned of restaurant closures and job cuts after its losses hit £8million.
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John Vincent, who founded Leon in 2004, told The Sun earlier this month that some unprofitable sites might have to close.
He also said there were plans to enter negotiations with landlords.
The chain has now appointed administrators to carry out a major restructuring.
The group has hired advisers from Quantuma after applying for an administration order.
It will then set out proposals for a company voluntary arrangement (CVA) restructuring plan.
This is a way of restructuring that means a business can continue trading by negotiating its debts.
Mr Vincent hit out at the “unsustainable” tax burden facing hospitality businesses.
“Today for every pound we receive from the customer, around 36p goes to the government in tax, and about 2p ends up in the hands of the company,” he said.
“It’s why most players are reporting big losses.”
Chancellor Rachel Reeves has been accused of letting hard-up boozers and eateries pick up the bill in a shake-up of business rates in her Autumn Budget.
Pubs and restaurants are expected to see an average £1,400 rise next year, according to UKHospitality.
The Treasury has pointed to £4.3billion in support that can be accessed to reduce costs.
Leon also has further plans to overhaul the struggling chain, including changes to the menu and stores.
“We are looking at the financial performance of each restaurant, and defining the broader plan to return the company to profitability,” Mr Vincent said earlier this month.
He had sold Leon to EG Group, run by the billionaire Issa brothers, in 2021.
The chain then became part of their Asda business in 2023.
But Mr Vincent bought back the business this year, allegedly for a large discount.
He had warned before that the Leon brand could be “destroyed” under Asda’s ownership.
In an interview with The Telegraph, he said the company was abandoning its original goal of selling food that is “convenient and healthy” in favour of “cheap”, unhealthy alternatives.
He said he wanted to bring Leon back to its core values after the team had “lost confidence and are fearful” and the chain had lost its “leadership in food”.
Trouble in the restaurant industry
Chains have been struggling recently as the cost of living has led to fewer people spending on eating out.
Businesses have also been struggling to bounce back after the pandemic, while their costs have increased dramatically.
As a result, a number of chains have been forced to close down or reduce their estate.
Officina 00, a popular pasta join, closed three locations across Covent Garden, Fitzrovia and Old Street.
The Cosy Club at Ipswich’s Buttermarket Shopping Centre also announced it made the “very difficult decision” to close doors in May.
