The group’s Company Voluntary Arrangement (CVA) was approved at a meeting held in London today (9 November).
Under the terms of the CVA, 17 of the brand’s 85 restaurants are earmarked for closure.
This move would impact around 250 staff, though GBK says every effort would be made to relocate them.
“We’d like to thank the landlord community, our trade suppliers and our restaurant teams for their support through a challenging process,” says Derrian Naduald, managing director at GBK.
“With the positive vote on our proposal to restructure our property portfolio, we are now able to execute the final stage of our turnaround plan, which we are confident will position the business for long term sustainable growth.”
A case of over-expansion?
When South Africa's Famous Brands bought GBK for £120m in 2016 it said it saw "substantial growth potential" for the "best in class" chain. However, in August the company announced the burger brand had "under performed" its expectations.
In a CVA proposal seen by BigHospitality’s sister site MCA, Famous Brands identified a total of 46 restaurants that are either loss-making, over-rented or do not add strategic value to the brand.
It says the majority of these opened during an expansion push over the last two years as the company made a mistaken effort to grow outside its ‘heartland’. Restaurants stuggled with 'poor brand recognition in the north, trading formats that were not adapted to the market, and pricing and menus that were London-centric', the company says.
GBK was founded in Battersea, London in 2001 by three New Zealanders with the backing of chef Peter Gordon.
It was bought by Yellowwoods group in 2010, leading to the rapid growth of the chain, before it was sold to Famous Brands.