Restructuring on the Rise: Implications for Food & Hospitality Businesses

As the 2024–25 financial year draws to a close, more small businesses are turning to formal restructuring processes to manage financial pressure and avoid insolvency.

The Small Business Restructuring (SBR) framework, designed to support viable businesses in distress, has seen a significant increase in uptake, particularly in the hospitality and construction sectors.

For food and hospitality operators, the pressures are well known. Rising input costs, reduced consumer spending, and persistent workforce shortages. Many venues are operating with tighter margins and lower turnover, while still managing inflationary cost increases and compliance obligations.

In response, more business owners are engaging professional support earlier in the process. This shift is helping businesses assess their financial position, negotiate with creditors, and explore restructuring options before reaching a critical point.

SBR provides a formal mechanism for eligible businesses to restructure their debts while continuing to trade. For hospitality businesses, this may involve reviewing supplier arrangements, consolidating liabilities, or adjusting operating models to reflect current market conditions.

Restructuring is not a last resort, it is a legitimate tool for businesses seeking to stabilise and reset. In a sector that thrives on adaptability, it is increasingly being used as a strategic response to financial stress.

With 30 June approaching, now is a key time for food and hospitality businesses to review their financial health and consider whether their current structure supports long-term sustainability.

Hood Sweeney’s Food & Hospitality Accounting team works with businesses across South Australia to navigate financial complexity with practical insight and tailored support. Contact the team here.

Disclaimer: Hood Sweeney does not undertake formal restructuring processes directly. These are ordinarily facilitated by a registered liquidator. Our role is to support clients in evaluating whether restructuring is a viable option and, where appropriate, refer them to a qualified liquidator to carry out the process.