GoodBean, the coffee house chain started three years ago by Sussex entrepreneur Ray Bloom, has been bought by Coffee Republic.
The London-based espresso bar chain is paying £800,000 in shares to acquire the group and taking on debts of £400,000.
GoodBean is a family-run business. Mr Bloom is chairman and his wife Claudine and their daughters Carina and Natalie are directors.
Its head office is in Palmeira Square, Hove, and it has 19 premises across the South East as well as branches in Yeovil, Manchester and Shrewsbury. They will all be rebranded.
GoodBean's first coffee house was in Nile Street, Brighton, followed by Bond Street and Trafalgar Street. The firm also has an outlet in Eastbourne.
Mr Bloom, a director of Brighton and Hove Albion, said: "We believe Coffee Republic is the best national brand in our sector and entirely compatible with what our customers have become used to.
"The GoodBean bars in Brighton are naturally close to the hearts of the family.
"In recognition of this special Brighton link, Coffee Republic is donating a day's takings at the Nile Street branch to the Martlets Hospice and we are matching the amount with a donation.
"This is our way of acknowledging the city in which GoodBean began and the place which means so much to all of us."
Mr Bloom's family will become shareholders of Coffee Republic.
GoodBean employs 110 people.
Coffee Republic hopes to retain bar staff and put them through its own training programme.
Chief executive Peter Morris said "We are aware of the good reputation and loyal customer following of GoodBean and we very much look forward to matching it."
The acquisition takes the total of Coffee Republic bars in the UK to more than 100.
The chain was started in 1995 with the first bar in South Molton Street, London.
Mr Morris, who joined the firm from Disney in April, said his business was "leading the consolidation process" in the market.
He said: "In the UK, you have Coffee Republic, Starbucks, Costa and Nero.
"Then there are 15 independent operators who manage 350 bars."
The deal was announced as Coffee Republic reported it had managed to cut losses during the first half of its financial year.
Improved food ranges and 19 new bars helped turnover jump by 33 per cent in the six months to September 30 to £12.9 million.
Pre-tax losses were £775,000 compared with a loss of £1.3 million in the same period last year.
Share