A chain of five French eateries in the North-West trading under the Le Frog Bistro brand has collapsed into administration in the latest sign of stress in the restaurant sector.

The failure of Wolfteam Limited, which owned Le Frog, follows the appointment of administrators at a number of bar and restaurant operators including the Food & Drink Group, the quoted owner of Jamies Bars and Henry J Bean’s.

Analysts pointed to the proliferation of two-for-one offers by some of the biggest high street chains, including PizzaExpress and Café Rouge, as a further sign of the impact of the consumer spending squeeze on the eating out market.

The Le Frog chain, together with the Pastiche Bistro and Smollensky’s brands, are backed by Octopus Private Equity, although it is understood that the other businesses were held separately and do not form part of the administration.

The administration of the five Le Frog eateries is being handled by Begbies Traynor which, in turn, has appointed Christie & Co, the licensed property agent, to sell them. The outlets are in Ormskirk, Fulwood, Wigan, Warrington and St Helens.

The rest of Octopus’s other restaurants, including the Smollensky's eateries, are also understood to be up for sale.

Octopus became involved in the business in September last year when it backed Paul Lilley, the owner of Le Frog, in the acquisition of Smollensky’s. Its website lists the deal size as £11 million.

The chairman of the enlarged business was Bill Shannon, formerly managing director of Whitbread’s restaurants division, which at the time included such brands as TGI Friday’s, Brewers Fayre and Pizza Hut UK.

The restaurant sector has so far proved relatively resilient to the consumer slowdown, but analysts said that further casualties were inevitable as Britain slips into recession and unemployment rises.

Graham Turner, the chief executive of Tragus Group, the owner of Café Rouge and Strada, said recently that while occasional two-for-one deals and other promotions were a good way of drumming up business, operators needed to be sensible about how they used them.

"I don't want to see them become endemic," he said. "We need to be very careful how we use them because they can become a blunt instrument."

Another victim of the financial meltdown is Prezzo, the AIM-listed operator, which was to have been the subject of a management buyout. The offer was withdrawn last week "due to current banking conditions".

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