Little Chef, the roadside restaurant chain, is understood to have signed a rescue deal with a new investor to secure the long term future of the brand.

The chain was bought by The People’s Restaurant Group – owned by entrepreneurs Lawrence Wosskow and Simon Heath – in October 2005 from Permira for around £52m, but was put into administration last Wednesday by PriceWaterhouseCoopers after a lengthy marketing process did not result in a total sale.

However, private equity group R Capital has now agreed to pay around £10m to buy a majority stake and will take on 196 branches, meaning around 40 outlets will close.

PriceWaterhouseCoopers will review the future of the restaurants not included in the sale over the next few days.

The chain was founded in 1958 by caravan manufacturer Sam Alper, based on roadside diners in the US.

Photograph: Current owners Lawrence Wosskow and Simon Heath