LEON Restaurant Chain Faces Uncertain Future

Introduction to the Crisis

Fast food chain LEON has taken a swipe at “unsustainable taxes” while trying to secure its future by appointing an administrator, putting hundreds of jobs at risk. The loss-making company, which was bought back from Asda by its co-founder, said it had begun a process aimed at driving forward the closure of unprofitable sites.

Restructuring Plans

The company is undergoing a restructuring process intended to be part of a turnaround plan to return the brand to its roots around natural foods. At the time, it was unclear how many of the 71 restaurants – 44 of them directly owned – and around 1,100 employees would be affected by the company voluntary arrangement (CVA) plans.

Impact on Employees and Locations

The restructuring will involve the closure of several LEON restaurants and a number of job losses. The company has created a program to support all those laid off. It added that LEON and its partners intend to spend the next few weeks discussing plans with their landlords and developing options for the future of the company.

Future Plans

LEON then plans to emerge from administration as a leaner company that can more easily return to its core values ​​and principles. In the meantime, all of the group’s restaurants will remain open and serve customers as usual. The LEON grocery store will not be affected in any way by the CVA.

Challenges Faced by the Industry

The co-founder said, “If you look at the performance of LEON’s competitors, you will see that all are facing challenges – companies are reporting significant losses due to work patterns and increasingly unsustainable taxes.” The hospitality sector has taken aim at the Chancellor’s adjustment to business rates as well as increases in employers’ national insurance contributions and minimum wages, accusing the government of putting jobs and businesses at further risk.

Background

The chain was sold for £100 million in 2021, but like its rivals, it has struggled to move forward in the wake of the pandemic and the cost of living crisis that followed the health emergency.