The owner of the Gloria Jean's and Brumby's Bakeries chains, Retail Food Group, will shut between 160 and 200 stores as it comes under pressure from its bankers following a swingeing $138 million writedown on the value of its franchises.

The writedown took RFG to one of its first losses since listing on the stock exchange in 2006, with the company booking a net loss of $87.8 million for the first half of 2018.

Retail Food Group managing director Andre Nell at the company's annual general meeting last year.

RFG's writedowns and banking issues follow Fairfax Media reports that the group was using a brutal business model that had sent hundreds of franchisees within its network to the wall financially. The investigation also uncovered rampant underpayment of staff by store owners.

Releasing its delayed accounts on Friday morning, the company assured the market it was not in breach of any of its debt covenants that were reset on Friday.