Doughnut Time went from 30 stores to seven in a weekend — and owed staff wages

In March 2018, three years after a meteoric rise, cult doughnut chain Doughnut Time collapsed from an empire of 30 stores to just seven — remaining sites in Melbourne, Brisbane, the Gold Coast and Sydney)s Newtown. At its peak the company had more than 400 staff; fewer than 100 kept jobs after the weekend closures, announced to staff in a Sunday-night email from new chief executive Dan Strachotta.

The email carried two revelations: founder Damian Griffiths had sold the business to Strachotta, and most stores would be liquidated in a turnaround plan focused on online sales and being 'less reliant on physical stores), with surviving staff moved onto new contracts. Strachotta blamed 'high rents) and 'generally high operational costs for such a simple and small business).

The cracks had been showing for months: a Manly store manager arrived to find the landlord had locked them out over more than $10,000 of unpaid rent, and wages had slipped from days late to weeks late — he was owed five weeks, more than $2,200. Dozens of former workers complained to the Fair Work Ombudsman about roughly $70,000 in unpaid wages, with allegations many had never been paid superannuation.

23 of 30 stores closed overnight; staff fell from more than 400 to under 100; about $70,000 in unpaid wages complained to the Fair Work Ombudsman

The chain rolled out stores faster than unit economics could support, loading the P&L with rents against short-lived novelty demand.

Cash stress surfaced first as late wages and unpaid rent rather than a strategic retreat, compounding staff and landlord damage.

Ownership changed hands mid-crisis, and staff learned both the sale and the closures from a mass email.

The turnaround plan pivoted to online sales with less reliance on physical stores — an admission the store bet itself was the mistake.

Rapid store rollouts on lease-funded growth turn a brand's popularity into a fixed-cost trap — the rents keep arriving when the queues do not.

Strachotta)s plan kept seven stores — three in Melbourne, two in Brisbane, one on the Gold Coast and one in Newtown — and promised backpay would be resolved via an incoming investment; former staff told the ABC they had heard that promise for months while pay fell further behind.