Leon seeks CVA as tax and footfall strains hit fast casual sector

Leon, the fast food chain known for its “naturally fast food” positioning, has entered administration and is preparing to close a significant number of restaurants, placing hundreds of jobs at risk. The company has appointed Quantuma as administrators and plans to pursue a Company Voluntary Arrangement (CVA), a legal process that allows businesses to renegotiate leases and exit unprofitable sites while continuing to trade.

The move comes weeks after Leon was bought back by its co-founder, John Vincent. In a message sent to customers, Vincent said the business was losing about £10m a year and that too many locations were no longer viable. He has set out plans to reduce the estate from roughly 70 restaurants to around 50, closing those that are unprofitable and unlikely to return to profitability.

All restaurants remain open for now while discussions with landlords take place. Leon employs about 1,000 to 1,100 staff across 71 sites, with 44 directly owned. The company has not yet confirmed how many closures will proceed, or the exact scale of redundancies, but it has said job losses are expected.

Why Leon is taking this step now

Leon was founded in 2004 by Vincent, Henry Dimbleby and Allegra McEvedy. It was sold during the pandemic in 2021 to EG Group, which later sold it to Asda. Vincent has now repurchased the chain and says he returned to find a company that had moved away from its founding principles.

He told customers that Leon had “drifted” from its core approach and that the business was now making heavy losses. He attributed the decline to a combination of internal and external factors. Internally, he pointed to a change in company culture and a weakening of teamwork and customer service. Externally, he highlighted pressures familiar to much of the sector: fewer people in city centres, lasting changes in commuting and working patterns, rising costs and a tax burden he believes makes hospitality harder to sustain.

This blend of strategic drift and structural headwinds provides the context for why Leon is opting for administration and a CVA rather than attempting incremental change. With losses running at around £10m annually, Vincent argued that a tightly controlled reset was needed to restore the business to break-even.

What the CVA could mean in practice

A CVA has become a common tool for restaurant and retail chains trying to reduce fixed costs, particularly rent. Leon’s plan is to identify weaker locations and close them through an organised process.

Vincent said some closing sites may be taken on by other brands better suited to their neighbourhoods. In cases where no replacement business is found, Leon expects to exit the lease. The chain aims to emerge from administration early next year with a smaller, more profitable estate.

The restructuring will also affect staff. Leon has said it will try to relocate teams from closing restaurants into remaining sites where possible. When redeployment cannot be arranged, the company says it will support staff into alternative employment. Vincent highlighted a formal programme with Pret A Manger, which has created a dedicated route for displaced Leon employees to apply for roles.

Quantuma has indicated that discussions with landlords and suppliers have been constructive, suggesting broad support for keeping the core business trading.

A familiar pressure pattern across hospitality

Leon’s retreat is arriving against a backdrop of widening financial strain in UK hospitality. Operators have pointed to rising labour costs, including higher minimum wages and increased employer National Insurance, along with persistent energy inflation and ongoing business rates pressure. These forces land at the same time as consumer demand remains cautious.

Fast casual chains are particularly exposed because their business model relies on high volume in high-rent locations. When footfall softens, the economics can turn quickly, especially in city centres that have not returned to pre-pandemic patterns of daily commuting.

Vincent’s comments about hybrid working and taxation echo frustrations voiced across the sector. While his figures represent his own assessment, the underlying problem is one many businesses recognise: fixed costs have risen faster than sales in a market still searching for a new equilibrium.

Implications for fish and chip and wider hospitality businesses

For fish and chip shop owners and hospitality professionals, Leon’s restructuring offers a sharp signal about the direction of travel on the high street.

First, location risk has changed. Sites dependent on commuter surges or office-based lunch trade are no longer guaranteed performers. Local loyalty, evening trade and destination demand matter more than they did five years ago. Independents assessing second sites or expansions may need to stress-test their assumptions about footfall far more aggressively.

Second, fiscal policy is now a front-line operational factor. Whether or not operators share Vincent’s view of the tax system, Leon’s decision shows that even established brands can be pushed into radical restructuring when policy-driven cost increases coincide with weaker demand.

There may also be opportunity amid the disruption. If Leon exits a number of leases, landlords could be more open to flexible terms or new tenants, potentially creating openings for strong independents. But the larger warning is that size alone is not shelter when the cost base is rigid and demand is volatile.

What happens next

Leon will spend the coming weeks negotiating with landlords as it finalises which sites will close under the CVA. The company says most restaurants will continue trading as usual and that remaining locations will be refreshed and improved.

Looking further ahead, Vincent told customers to expect major menu changes from next spring. He says he wants Leon to reclaim its role as a pioneer of “naturally fast food,” alongside a renewed emphasis on service and culture.

For the wider sector, the immediate story is one of closures and job risk. The broader takeaway is that Britain’s eating-out market is still rebalancing. The winners may be those who adapt fastest to new work patterns, new cost structures and customers who are increasingly weighing convenience against value.