‘Ripped off’: The devastation left among Aussie venues after the Karen’s Diner’s collapse

“Don’t get me started on Karen’s Diner … Karen’s Diner behaved like total Karens.”

Andy Pobjoy, one of the owners of Piano Bar Geelong, has bitten his tongue until now about his experience working with Karen’s Diner.

WATCH THE VIDEO ABOVE: Karen’s Diner closes three stores.

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Pobjoy is just one of the people involved in venues burned by the touring experience connected to the ill-fated Karen’s Diner empire, following the news liquidators had been appointed for the business on May 30.

That news broke days after Karen’s Diner venues were suddenly closed across the country, just two years after the original Sydney store opened in 2021.

But it was too late for Piano Bar Geelong, whose staff bent over backwards to make the Karen’s Diner on Tour event a good experience for its local attendees, according to Pobjoy.

The tour was aimed as an extension of the Karen’s Diner concept, essentially taking the viral cafe chain’s combination of retro decor, old school burgers, fries and ‘cholesterol-heavy bites’ and pink-uniformed ‘100% rude staff’ on the road with ticketed events.

Pobjoy bought the equipment to cook burgers — which aren’t on their menu — but didn’t expect hurdles such as performers associated with the tour showing up without costumes the day of the event.

“The whole thing was a bit of a shemozzle,” Pobjoy told 7NEWS.com.au.

“We managed to glitter and jazz hands our way through it.”

The sudden collapse of Karen’s Diner has left many small businesses struggling. Credit: 7NEWS

Piano Bar Geelong was cold-called by Karen’s Diner and asked to join the restaurant tour, promising a big reputation and a worthwhile event. An event was scheduled at the regional Victorian hotspot in early May — the same month news of the Karen’s Diner liquidation finally broke.

It also turned out it was up to the Geelong venue to ultimately save the day when the tour rolled into town, Pobjoy said.

“We were absolutely astounded at their lack of professionalism,” he said.

“Our team bent over backwards to make sure all of Karen’s stuff-ups were taken care of, and on the whole the event was a success.”

‘So many excuses’

The way the Karen’s team handled the liquidation and money owed to businesses was “unconscionable”, Pobjoy said.

Piano Bar Geelong agreed to receive a $20 per ticket cut for the events, providing free venue hire, food and drink and even a 15 per cent cut of the gross bar takings.

“After the events concluded, the communication completely stopped,” Pobjoy said.

“The Karen’s team ghosted us, and any communication was limited to ‘passing the buck’, with our invoice (supposedly) being forwarded on from person to person.

“So many excuses, and so much stalling.”

Pobjoy feels the tour was a last-ditch attempt to source cash by those aboard a ship they knew was sinking.

$12k in debt

Piano Bar Geelong’s final invoice to Karen’s Diners totalled $12,342.95.

“It cost us roughly $12 (per person) to produce the burgers, fries and drink,” Pobjoy said.

“Add to that all of the wages and penalty rates for Sunday shifts.

“All in all, I estimate we spent $10k on costs and wages to make the events a success.”

Viral Ventures, which owns the Karen’s Diner and Broadway Diner franchises, had liquidators appointed on May 30. Credit: Instagram

After barely surviving COVID lockdowns and the downturn in hospitality as a result of the pandemic, Pobjoy said, “this is a devastating blow to our morale and our bottom line”.

“As a team, and as a family business, we basically just feel ripped off,” he said.

“I can’t believe Karen’s Diner behaved so despicably, and that one small business could treat another small business with such callous disregard.

“My sympathy is with other creditors, along with their staff and performers.”

Pobjoy said the younger employees who he met associated with the ill-fated tour were “really talented kids” who he hoped were being looked after.

‘It’s pretty rotten’

Not getting paid was “obviously” a problem, Pobjoy said. In fact, he refused to pay himself for about a month, just to cover the loss.

He prioritised paying his staff and suppliers instead.

Karen’s probably doesn’t expect people to chase up the business’s smaller debts, he said, “but it adds up”.

He also feels the tour was a “quick injection of cash” that went into the “other arms of the failing business or into someone’s pockets”.

“It’s pretty rotten.”

But Pobjoy said he won’t let the experience turn him into someone who is constantly looking over his shoulder, and his priority remains providing a wonderful service for his customers.

Multiple small businesses say they have been left without pay following the Karen’s Diner collapse. Credit: Facebook

Another venue involved in the tour, Tasty Korea Chicken in Hobart, also came forward to say the liquidation has resulted in them not being paid.

“We were not informed about the situation until 16 days after the (liquidation) announcement was made,” the restaurant said.

“As a result, we are facing challenges due to inflationary pressures but remain determined to continue operating our restaurant smoothly.”

‘We have had no response’

Iron Horse Bar and Grill in Launceston also shared its anger online following the Karen’s Diner collapse.

The tour was yet to hit its scheduled stop at the Tasmanian restaurant when the liquidation news broke.

While Karen’s Diner had claimed the tour would still go ahead, Iron Horse Bar and Grill said this was not the case.

“After many attempts to contact the company, we have had no response,” the restaurant said.

It advised customers who had purchased tickets to contact the ticketing company for a refund.

“We did not have any control over the ticket sales or ticketing site,” Iron Horse Bar and Grill said. “It was run by Viral Ventures and the ticketing website.”

“We apologise to customers for the inconvenience and the cancellation of this and future events, it is beyond our control, and we ourselves are owed for the previous tours.

“Moving forward, we are pairing with local performers and companies for our upcoming shows and tours.”

No comment

Karen’s Diner and the company behind it, Viral Ventures, have been contacted multiple times for comment.

Not all the business’s Australian venues have been shuttered, with at least two stores in Sydney still operational.

Karen’s Diner is still operating overseas, with merchandise and even shares available for purchase online.

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