The owner of restaurant chains Ask Italian and Zizzi is drawing up plans to close up to 25 outlets, putting hundreds of jobs at risk.
Reports say the company is in advanced talks over a sale to a private equity firm through what is known as a pre-pack administration.
The move would result in some restaurants closing but safeguard the rest of the business.
Azzurri operates 311 restaurants and shops in the UK, three in the Republic of Ireland and one in Shanghai.
It employs over 6,000 staff and serves over 20 million meals a year.
The threat emerged as Pizza Express prepares to close a possible 75 restaurants, putting more than 1,000 jobs at risk.
The eating out sector has been hit hard by the coronavirus lockdown.
Despite restrictions being eased, social distancing measures remain in place, further denting demand.
Azzurri is said to be in talks with Towerbrook Capital Partners.
The firm saw restaurant sales rise 7% to £299million last year but made a loss of £16.3million.
