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Fast food chain Leon has announced plans to close some of its restaurants and reduce staff numbers after appointing administrators. The company has enlisted the services of Quantuma as administrators, stating that its main priority is to 'shut loss-making restaurants'.

The firm has established a programme to assist those made redundant, it revealed. Last month, the company was bought by co-founder John Vincent. The chain runs 44 company-owned restaurants and has 22 franchised restaurants.

Mr Vincent stated, "If you look at the performance of LEON's peers, you will see that everyone is facing challenges - companies are reporting significant losses due to working patterns and increasingly unsustainable taxes."

He added, "In the first instance, we will look to find people roles in other LEON restaurants. Where that is not possible, for example if there is no Leon restaurant within commuting distance, people will receive redundancy payments. In addition we have established a programme with Pret A Manger where affected LEON employees can apply for jobs via a dedicated channel. I would like to thank the Pret CEO Pano Christou for supporting us and our team at this important time."

LEON has applied for an Administration order with the aim of formulating proposals for a Company Voluntary Arrangement ("CVA") to expedite the restructuring of the business following its acquisition by Mr Vincent. Following an initial review of the business, it is reported that Mr Vincent and his team have concluded that the immediate priority is to reduce the number of loss-making restaurants.

The company explained: "In addition to internal challenges, changing work patterns, brought on by the Covid-19 pandemic, and also tax increases, have combined to place further strain on the business and the wider hospitality industry in recent years."

Discussing the previous ownership under EG Group and Asda, Mr Vincent expressed understanding of the difficulties they encountered. "In the last two years, Asda had bigger fish to fry, and Leon was always a business they didn't feel fitted their strategy", John Vincent said.

"If you look at the performance of LEON's peers, you will see that everyone is facing challenges - companies are reporting significant losses due to working patterns and increasingly unsustainable taxes."

Over the coming weeks, LEON and Quantuma will engage with landlords to discuss proposals and outline potential pathways forward for the company.

Following administration, LEON aims to re-emerge as a streamlined operation better positioned to return to its core founding values and principles. The firm stated: "In the meantime all the group's restaurants remain open serving customers as usual. The LEON grocery business will not be affected in any way by the CVA. The restructuring will involve the closure of several of LEON's restaurants and a number of job losses. " Mr Vincent has called upon Chancellor Rachel Reeves to reassess what he describes as 'an unsustainable tax burden on the sector'.

He explained: "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. It's why most players are reporting big losses.

"The immediate priority is to close the most unprofitable restaurants. In many cases we have found other brands to replace us, and in others we will be asking the landlords to take the leases back and find better suited operators themselves.

"We will rebuild LEON on its core values and I hope to be providing jobs to many more people once we have returned to profitability and can continue to grow again."

According to the current strategy, LEON is set to emerge from administration through a Company Voluntary Arrangement in early 2025. Quantuma stated: "We are looking forward to working with the LEON team to deliver the optimal outcome for all stakeholders of the business, the creditors, suppliers and employees of the Company. LEON is obviously a much loved and cherished member of the retail food community as we have already had very positive support from its supplier base and many of its landlords."