UK-based restaurant operator The Restaurant Group (TRG) has reached an agreement with Big Table Group to divest its loss-making leisure arm.

The divestiture mainly comprises restaurant brands Frankie & Benny's and Chiquito.

The business now has about 75 eateries after TRG closed 40 of its locations during the past year due to declining business.

Apart from the 75 trading sites, Big Table Group will acquire associated costs and workforces.

The consideration to be paid by the acquirer to the TRG on completion of the divestment is £1. In addition, TRG will make a cash contribution of £7.5m, subject to some cash, debt, and working capital adjustments.

Frankie and Benny's is an Italian-American brand while Chiquito has offered Mexican cuisine for more than three decades.

The sale is a part of TRG's plan to reduce debt and increase its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) while continuing to evaluate its options.

TRG CEO Andy Hornby said: “A sale of our Leisure business significantly accelerates our medium-term strategic plans to increase Adjusted EBITDA margins and reduce leverage.

“On behalf of TRG, I would like to express our massive thanks to the extraordinarily hardworking and dedicated teams across the Leisure business who have made huge improvements in the customer proposition over the last few years. We wish them all well as part of the Big Table Group.”

The company noted that the divesture will allow TRG to focus on its three profit-making divisions: Wagamama, Pubs and Concessions.

Big Table Group CEO Alan Morgan said: “Creating, developing and acquiring brands that complement our existing portfolio whilst offering widespread consumer appeal is a fundamental part of our growth strategy.

“This exciting acquisition forms part of that strategy and we are delighted to be welcoming this new team into The Big Table Group.”

The transition is expected to be completed by 31 March 2024.