The Guardian reports that the burrito brand has engaged accountancy firm RSM "to assist on long-term planning, options and strategy” for the company.
It is understood to be considering all options, including administration or a company voluntary arrangement (CVA).
The chain previously raised £5.8m from around 1,500 retail investors through two mini-bonds dubbed ‘burrito bonds’.
More than 700 investors backed Chilango’s first bond in 2014, which raised £2.1m.
In October last year, Chilango launched the burrito bond 2 to raise money that it said would be used to refinance existing debt and open new outlets.
This required investment of a fixed amount, £500 minimum, for four years, in return for 8% annual interest.
The burrito bond 2 raised £3.7m in total, from almost 800 retail investors.
Mini bonds are often attractive to investors due to the high interest rates on offer.
But earlier this year the Financial Conduct Authority warned they could be high-risk, as they are illiquid and cannot be traded between third parties. Bondholders are also not protected by the Financial Services Compensation Scheme if the company issuing the bonds fails.
Chilango’s parent company, the London-based Mucho Mas, made a loss of £1.4m in the year to 25 March 2018, the latest period for which accounts are available, and a loss of just under £3.2m the year before.
As of Wednesday, its finance arm, Chilango Bonds, was six weeks late filing its accounts at Companies House.
Eric Partaker, Chilango’s co-founder, told The Guardian there was “nothing to report … We are working with RSM on some long-term business planning.”
Chilango was launched in 2007 by Partaker and his former Skype colleague Dan Houghton.
It currently operates 12 sites in total; 10 in London, with one each in Manchester and Birmingham.