The affected outlets, eight in the greater Athens area and one in the central city of Larissa, have been taken over by independent operators as part of a restructuring initiative supported by SwitzGroup, the international food group headed by Indian-born businessman Taizoon Khorakiwala.

SwitzGroup is seeking the release of bank accounts belonging to companies operating the nine stores after they were frozen by Greece’s Anti-Money Laundering Authority in connection with the wider investigation into To Horiatiko and its apparent owner, Angelos Giannakopoulos.

The group argues that the new franchise operators are independent businesses that were not involved in the previous management and should not be treated as part of the activities under investigation. The account restrictions, however, have disrupted their financial operations, with payment terminals reportedly rendered inoperative.

The development has placed the continuation of the stores’ operations and the employment of their workers at the center of the dispute.

A restructuring under pressure

The restructuring involves the transfer of the Bread Factory brand to companies associated with Khorakiwala, alongside new leasing arrangements and the assumption of day-to-day operations by independent franchisees.

According to reports cited on Friday by local media, the new operators have paid more than one million euros in taxes and social security contributions over four months, with monthly payments exceeding 300,000 euros. SwitzGroup maintains that the businesses have been meeting their obligations and that the new arrangements should be assessed independently of the previous corporate structures.

The account freezes have nevertheless complicated the effort to establish a stable operating model. SwitzGroup has asked the authorities to lift the restrictions, warning that otherwise businesses it considers viable could face serious difficulties despite the efforts to preserve their operations and employment.

The group has also highlighted the importance of protecting jobs, saying its franchise network employs approximately 1,000 people.

Khorakiwala has built an extensive presence in Greece’s food industry through SwitzGroup, whose portfolio includes businesses in bakery products, pastry-making, food production and distribution. Its Greek interests include Olympic Foods, Ioniki Sfollata, Artizan Hellas, Kriton Artos and Koulourades.

Wider scrutiny of the F&B sector

The development come amid two major investigations into alleged tax evasion and other financial offenses involving To Horiatiko and the Pizza Fan restaurant chain.

In the To Horiatiko case, authorities are examining allegations of large-scale financial fraud, tax evasion, unpaid social security contributions, money laundering and the use of successive corporate structures that allegedly accumulated liabilities while business activities continued through other entities.

The case file reportedly encompasses hundreds of businesses and examines the roles of company managers, accountants and other associates. The allegations remain subject to judicial investigation, and those implicated are presumed innocent unless convicted.

The separate Pizza Fan investigation concerns an alleged scheme to conceal taxable revenue through the manipulation of sales records, including orders recorded as complimentary items. Authorities are also examining possible tax evasion and unpaid social security contributions, as well as allegations that confidential information about impending inspections may have been leaked.

The two cases have prompted authorities to freeze assets belonging to defendants, while exempting accounts used to pay employees’ wages.

Although the investigations concern different business networks and alleged offenses, their impact has exposed the vulnerability of workers and franchise operators when legal action disrupts the financial operations of companies.