GBK is planning to close 17 restaurants. Credit: Edward Hands.

British restaurant chain Gourmet Burger Kitchen (GBK) has filed a company voluntary arrangement (CVA) to avoid administration after facing millions of pounds of losses.

GBK is an indirect wholly owned subsidiary of South Africa’s restaurant franchisor Famous Brands, which acquired the burger chain in 2016.

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The company filed the CVA with the help of accounting and consulting firm Grant Thornton.

GBK is planning to close 17 restaurants, while its remaining 68 establishments are expected to operate normally.

“We are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.”

In a statement, Famous Brands said: “The CVA process has the objective to ensure financial viability and the sustainability of the business into the future.

“Whilst this process evolves, shareholders will be updated when appropriate and are requested to continue to exercise caution in the trading of Famous Brands shares.”

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Earlier this month, GBK reported an operating loss of £2.6m for the six months ended 31 August this year.

Famous Brands’ board of directors decided to recognise an impairment of ZAR874m ($46.7m) at group level.

GBK managing director Derrian Nadauld was quoted by the BBC as saying: “We are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.

“This CVA will provide greater security for our staff, suppliers, landlords and customers.”

Established in 2001, Gourmet Burger Kitchen currently operates 90 restaurants across the UK offering a range of handcrafted burgers.

Menu choices offered by the restaurant chain include beef, chicken, salads, a veggie and vegan range, fries and sides, milkshakes, soft drinks, beer, cider and wine.