Doughnut Time’s stores, including the Clayfield store, have closed after owner Damian Griffiths refused to sign over the trademark to Dan Strachotta, his former CEO and managing director. Doughnut Time is now entering liquidation and reportedly owes its workers an estimated $200,000 in unpaid wages.
Odds have not worked out in favour of the doughnut empire for the last 10 months.
Earlier this year, workers lodged their complaints to the Fair Work Ombudsman for alleged unpaid wages. Since then, other workers have taken to the streets and social media in protest, after finding out that half of the company’s stores were closed to keep the company afloat.
Unfortunately, despite Mr Strachotta’s attempt at saving the company, the owner’s refusal to sign over the trademark to the supposed new owner resulted in the company going into liquidation. In an email supplied to ABC News, workers were informed that Friday, 9 March 2018 was the last day of Doughnut Time.
Credit: Wolf Zimmerman
In a deal that attempted to save the doughnut empire, Doughnut Time in Clayfield was among the stores that were planned to remain open in Brisbane, while half of the company’s stores would close.
In Clayfield, Doughnut Time opened in July of 2015, only a few months after the company opened its first stores. Located on the corner of Sandgate and Junction Roads, Doughnut Time Clayfield served the community, and delighted Instagram, with its glazed doughnuts and delicious milkshakes.
Propelled by an active social media campaign, the company, at one point, had more than 30 stores across the country. It even expanded to the United Kingdom in just a matter of two years. During this period, the company was able to employ more than 500 people.
This rapid rise to success, however, led to the company’s current financial challenges. In media interviews, Griffiths said that his business expanded hastily until he could no longer keep up with expenditures, mostly of rents and operational costs.
Griffiths is taking all the blame, particularly in his impulse to expand immediately.
Whilst he was heartbroken to see his whole company go, he strongly hopes that young entrepreneurs will learn a lesson or two from his mistakes.
Compensation for unpaid workers
Doughnut Time had gone into voluntary administration and the principal of Menzies Advisory, Michael Caspaney, was appointed as the liquidator of the company. Mr Caspaney said that the company has cash flow problems and couldn’t pay its employees which seemed to be the main reason for the collapse.
According to the Fair Work Ombudsman, when a business goes into liquidation, employees can get help through the Fair Entitlements Guarantee (FEG).
The FEG, previously known as the General Employee Entitlements and Redundancy Scheme or GEERS, is available to eligible employees to help them get their unpaid entitlements.
Under the FEG, workers can get up to 13 weeks of unpaid wages (capped at the FEG maximum weekly wage), unpaid annual leave and long service leave entitlements, payment in lieu of notice of termination – maximum of 5 weeks, and redundancy pay – up to 4 weeks per full year of service.
However, the FEG is only applicable to Australian citizens or holders of a permanent visa or special category visa that allows workers to stay and work in Australia at the time that the employment ended.
Eligible employees of Doughnut Time can go to the FEG page to learn more about how to make a claim.
FWO can provide advice and help employees seek unpaid entitlements when a business is in voluntary administration.
As of the moment, a Fair Work Ombudsman spokeswoman confirmed that the organisation was conducting inquiries in relation to Doughnut Time, but the FWO has not started court action against the company.
