The Inside Story Of How The Once Mighty Doughnut Time Empire Crumbled Into Pieces
Unpaid wages are just the tip of the iceberg.
Have you walked past a Doughnut Time store recently and wondered why it never seems to be open? Well, it turns out it’s because the company was slowly but steadily running out of money, underpaying staff and failing to pay rent and bills. And now it’s hit rock bottom.
Earlier this week the company’s founder, Damian Griffiths, announced he’d run out of money and would be selling the franchise, with around half of the stores to close in the process. Since then, former employees have been taking to every platform available to them (including posters on shuttered Doughnut Time storefronts) to accuse the company of a range of incredibly shitty and potentially illegal acts, from firing workers abruptly, to not paying workers for weeks on end, to maintaining gross, trash-filled working conditions.
Normally this is the part where we’d tell you the company denies this, but things are a bit more complicated than that. Here’s what went on behind the scenes in the months leading up to Doughnut Time’s spectacular collapse.
What Are Workers Saying?
Many former Doughnut Time workers have taken to social media to allege that the company owes them weeks or months of back pay, that they were never paid superannuation, and that they were abruptly fired this week when the company ownership changed hands.
Laleh, who worked across Doughnut Time’s Sydney stores, told Junkee she personally is owed two weeks of back pay, but knows colleagues with up to seven weeks owed.
“Our contract says we are supposed to be paid on Tuesday,” she said, “But I think since I started this has only happened maybe once or twice. At first I was paid on Wednesday or Thursday, then it slowly slipped to Fridays, and then it kept being delayed slowly, little by little.”
“They were delaying, every week pay was delayed, some weeks we didn’t get paid at all. Some of my colleagues haven’t been paid in two to three weeks.”
Chris Boucher, former manager of the Manly Doughnut Time store, said most people he knew had now gone four to seven weeks without pay.
According to Laleh, it wasn’t just the workers who weren’t being paid on time. She and several other Doughnut Time workers told Junkee that on multiple occasions workers were locked out of stores by landlords after Doughnut Time failed to pay rent.
“The store in Manly, the landlord was mad and just changed the locks,” she said. “The same thing happened in Surry Hills but I think they paid urgently, because the next day the store was open again. The landlord in Manly didn’t want to hear about Doughnut Time any more, though.”
Manly store manager Chris Boucher confirmed this story. Three weeks after starting work on a full time contract in October last year, he said he turned up to work only to find himself locked out of the store for unpaid rent. “A week or so earlier, there was a letter delivered to the store from the solicitors, stating that over $50,000 was owed in unpaid rent,” he said.
Garbage collectors were also routinely unpaid, according to a number of staff. Laleh said “the rubbish was just accumulating — at the Newtown store, it was piling up outside of the store, and in the kitchen and warehouse too.”
Todd, who has been working at Doughnut Time since October, confirmed Laleh’s account of the waste situation, and provided us with photos:
Pictures of garbage piled up at Doughnut Time’s warehouse.
“What’s in those bags is excess dough wastage, the red stuff is glazing that’s spilt out of the bags and frozen. It’s very slippery,” Todd said. “What should have happened is those bags go to skip bins out the front that get collected each day, but because the account with the garbage people was overdue, they were actually just piling that up in a freezer room, where frozen goods were also being stored.”
Bags of rubbish piled in front of ice cream stored in the freezer room.
Todd said trips to the landfill site, which workers were asked to undertake when the garbage service hadn’t been paid, felt incredibly dangerous because of the weight of the bags.
“It’s incredibly heavy, 800 kilograms of dough you have to drive around with. It feels like it’s more than the van’s built to take.”
Todd told us Doughnut Time last paid him on January 21st. Between then and now, he has worked three to four days a week — last week he worked six days. He was not optimistic about receiving back pay.
“Just A Matter Of Dishonest Leadership”
Laleh said that Doughnut Time workers regularly contacted management trying to get their back pay, and even threatened to strike at one point. On all of these occasions, she said that management, including then-CEO Dan Strachotta (now the new owner of the company) tried to placate workers by promising that they were just waiting for a big investment payment which would allow them to pay all owed wages.
Junkee has received screenshots of messages from Doughnut Time management sent through an internal company app which made similar promises, including messages sent in December which said the company was aiming to have pay up to date by Christmas, and guaranteed that “moving forward into the new year we will be back paying each and every staff member each week on time”.
Screenshots of messages sent to Doughnut Time workers by then-CEO Dan Strachotta on December 13 2017.
“You know, we started working for them first of all because we liked the brand,” Laleh said. “We hoped the situation would be better, and we believed the lies that they gave us. Even when we didn’t believe that they could recover, they would come up with a bigger lie.”
In Todd’s case, he said he has “sent multiple texts, and have spoken on the phone to Dan the CEO. He just said there were some cashflow issues and the payments would be up to date by some kind of vague date, towards the end of the week, that sort of thing.”
“I don’t think once it was honoured. We were always chasing it, wondering what was happening. Towards the end they just said they were waiting for an investment to come in, but they didn’t say that part of that investment was closing a bunch of the stores.”
“It’s just a matter of dishonest leadership. They knew things about the business that showed the impending death of the business, but we weren’t being told, we were just being constantly assured.”
Comments on a post in the internal company app, which is flooded with employee complaints about not being paid.
Fired With No Warning
Multiple workers we spoke to told us they felt they had no choice but to assume they had been fired when news of the store closures was made public. Workers were told that those continuing with the company would need to sign new contracts, which many have not received, and their accounts have been deleted from company apps and Facebook groups.
“I can only presume that I have been [fired],” Todd told Junkee. “I’ve seen nothing formal to say that my employment’s been terminated, I just assume because I’ve been locked out of the software they use to schedule shifts and things, so I thought it must be over.”
Laleh felt similarly, saying that as only one store will remain open in Sydney, there simply won’t be enough jobs for everyone who previously worked for Doughnut Time.
“I texted one of the supervisors, and she just said I think we all have to find a new job. Because the reality is, if you don’t have any shifts, it means that you’re fired because they don’t need you.”
What Does Doughnut Time Have To Say For Itself?
How did a cute doughnut business turn into an absolute nightmare for everyone involved? According to founder Damian Griffiths, “I expanded too quickly. I guess I had too many big ideas and dreams,” and yeah, he’s right on that one. Griffiths has had a stunning string of startup failures, and part of the reason he’s now facing bankruptcy is the fact his estranged family is getting together to sue him for failing to pay back loans.
Now, the company seems to be saying very little. In response to a detailed list of questions we sent them, Doughnut Time sent Junkee a generic press release about “new and exciting doughnut flavours” which concluded with a line from Griffiths that read “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.”
In response to a list of the allegations against the company contained in this article, Doughnut Time then provided the following statement from new owner Dan Strachotta: “The deal for the sale [of] 7 Doughnut Time stores has been signed and taken over by myself. I will do the right thing and try and save as many jobs as possible. I am looking forward to a fresh start for the company but unfortunately cannot comment on any claims referring to the old company.”
We’re sure that will be very comforting to the many workers who have no idea what’s going on, whether they’re employed, or whether they’ll be paid. As a group of the NSW staff put it yesterday, “is a CEO who never paid his staff superannuation, who never had intentions to do the right thing, the legal thing ‘genuinely’ sorry? Is a CEO who sent countless messages and made countless phone calls to staff making false promises whilst knowing he was in extreme debt ‘genuinely’ sorry?”
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Left feature image via Franka Deluca on Instagram, right feature image supplied.