A Facebook user posted a photo of the closed doors of the Doughnut Time store in Sydney’s Queen Victoria Building (QVB), which featured a handwritten sign on butcher’s paper stuck on with tape.
The sign in the photo, seen by My Business, reads: “Doughnut time hasn’t paid us in weeks!!! And now we all got fired”.
It ends with the hashtag “#itsnotalwaysagoodtime”, a play on the retailer’s slogan “it’s time”.
The user uploaded the photo with the comment: “Avoid Doughnut Time friends! They haven’t been paying their workers! [angry face emoticon] This is all Doughnut Times not just the QVB location!”
As of 10am, Wednesday, 7 March, the post had been shared 2,192 times and elicited around 1,400 comments.
“i[sic] heard about this!! so bad!! the dude went bankrupt,” wrote one user.
“when [sic] you overspend on PR ahahaha,” said another.
Doughnut Time released a statement saying that the “business has been sold for an undisclosed sum to a management group owned by Dan Strachotta”.
The statement claimed that Mr Strachotta is a turnaround specialist who had already been a consultant to Doughnut Time for 10 months.
“I’ve always been a big fan of the Doughnut Time brand and I am looking forward to a bright future for the company,” said Mr Strachotta.
“We intend to work with online platforms that can give us growth without the crazy rents that the company previously faced. Online sales and working with delivery partners will be our immediate future strategy, while trying to keep as many of the current employees as possible at the stores.”
The statement also included a quote from founder Damian Griffiths, who said: “I expanded too quickly. I guess I had too many big ideas and dreams when I started the development of Limes Hotel, Alfred & Constance, and then expanded Doughnut Time around Australia.
“I apologise to the staff for not being able to pay them in full, it’s a terrible position for them. I am being forced into bankruptcy by my cousin and the landlord and I just can’t keep going.”
Doughnut Time refused to comment on the situation with the unpaid workers and resulting social media backlash, saying it was a matter for the previous owner. Its own Facebook page is currently offline.
A spokesperson for the Fair Work Ombudsman confirmed to My Business that it is currently investigating Doughnut Time, but is “unable to comment further while the inquiries are ongoing”.
According to its website, Doughnut Time was founded in 2015 and quickly grew to have over 300 employees in “more than 15 locations across Australia” as well as in the UK.
However, its list of locations on the website provides details for only nine sites, including three in the UK. None are listed in Sydney.
Doughnut Time said that only a portion of the store network will continue to trade under the new management.