Sarti's, the fashionable Glasgow restaurant chain, has been sold by its Italian family founders to a six-strong management buy-out team in a £5m deal.

The sale to the team which had already made a success of one of the three iconic Sarti's outlets in the city was accelerated to beat the capital gains tax squeeze last month.

Founders Sandro and Piero Sarti and their business partner Gerry O'Donnell are retaining a one-third stake in a separate company holding the Sarti brand, but the trading business has been sold to Sandro's daughter Daniella Sarti and five other directors. They have all been involved in running the Renfield Street Sarti's restaurant, which was sold to a management team led by Daniella in 2002. The buy-out sparked a 60% increase in profitability over the next two years, according to O'Donnell.

"Not only has that continued, it has been bettered even further," he said. "Its half-year profit last year was more than the annual profit being created at the time of the MBO."

The team has now taken control of the outlets in Bath Street and Wellington Street, and a business turning over around £3m and making more than £500,000 of profit.

The sale comes at a time of economic challenges, including a consumer slowdown, soaring food prices, and big hikes in the cost of imports from Italy due to the strong euro. Daniella Sarti said: "We are making sure everything is very Italian with the set-up, and we are very focused financially, setting our targets and driving towards them - everything seems to be good."

The deal marks the latest chapter in the story of Glasgow's "caffe culture", which began with the opening of a deli in Clyde Street a century ago by Pietro Fazzi, whose daughter married the late Lucio Sarti, another of the band of pioneers who first introduced Scots to pasta, olive oil and Italian wines. Both families ran the legendary Fazzi's caffe-bar in Cambridge Street, but when family strains led to the hugely busy but loss-making Fazzi's having to be rescued from receivership 16 years ago, "Fratelli Sarti" was born in Wellington Street.

O'Donnell recalls: "The market then was much smaller than it is now. Glasgow is a changed place, much more cosmopolitan in the years we have been in business. At Wellington Street, many people argued we were in the wrong location, but things have changed."

He adds: "What we do is very traditional in the sense that we try to stay true to the Tuscan and Ligurian roots of the business, but Italy has developed its menus and its types of foods too, and we have tried to stay up with that."

The three partners designed the original premises themselves, and opened without a liquor licence, but within a year it had been shortlisted for a Scottish restaurant of the year award.

According to The Herald at the time, it was "packed with celebs and wannabe celebs", a place where "the cast of Take the High Road rubs shoulders with directors of Celtic, film directors and art school professors".

The success led to a second opening in Bath Street, and then to grand plans for expansion in 1999, with Sarti's promising to open four new restaurants inside 12 months. "The expansion programme didn't go as well as early as we hoped," O'Donnell admits. "We suffered a wee bit from thinking we were going to conquer the world at that time."

A Sarti's appeared in Sauchiehall Street, while the "Gran Caffe" opened on the corner of Renfield Street and West George Street, with uniformed staff and "fine dining". "It became quickly apparent that Sarti to our Glasgow public meant nothing other than what we already did successfully," O'Donnell says. Within a few months the Gran Caffe had given way to plain Sarti, and the Sauchiehall Street outlet never ran into profit and was eventually closed, but the business never took property onto its balance sheet and stayed financially sound.

The sale of the Renfield Street site to its management was prompted by the recognition that "without minute to minute director and shareholder involvement in a unit ((like this), things aren't going to happen as well as they should", O'Donnell says. Five years on, "we had a young hungry management team all developing careers, and with only one unit". Sandro, 56, Piero, 52, and O'Donnell, 54, had planned a gradual handover of the rest of the business.

"That changed when there was talk of the Chancellor's changes to capital gains tax. That focused our thoughts on the fact that none of us have the same stamina that we did 20 years agoparticularly in such a demanding business environment as the restaurant trade, you just have to be at your best all of the time.

"We did not want to leave the legacy with Sarti that Sandro and Piero had been left with Fazzi's."

On the recent cost pressures, O'Donnell says the weak pound and rising food prices are a "double whammy", prompting much debate between producers, importers and retailers. "Up until now these things have been largely absorbed but in recent weeks the message has been loud and clear that they can't really be absorbed any further."

Daniella Sarti's partners are original buy-out members Patricia Diamond and Patrick Collins along with Vicky Black, Renato Cimini and head chef Michele Arrighi.

Daniella, who qualified at the Strathclyde hotel school, said: "It is a great feeling. I began washing dishes in Wellington Street and I really have worked my way through. We are not looking to change anything - if it isn't broke, don't fix it."