Karen’s Diner, Broadway Diner chain collapses into liquidation

A controversial restaurant chain has collapsed just two years after launching in Australia after being mired in controversy.

A controversial restaurant chain has collapsed just two years after launching in Australia after being mired in controversy.

On Monday, a notice was released on ASIC that Viral Ventures (Australia) Pty Ltd had gone into voluntary liquidation.

The appointed liquidators are Chris Johnson and Andrew McCabe of insolvency firm Wexted Advisors.

Viral Ventures (Australia) Pty Ltd trades restaurants under the name Karen’s Diner and Broadway Diner.

The restaurants were infamous for their themed dining experiences for patrons.

Karen’s Diner was centred around the gimmick of the staff acting rudely towards customers as ‘Karens’, but courted controversy by offending restaurant-goers, and in some cases had to issue apologies.

Meanwhile, Broadway Diner was themed to that of a 1950s musical, with staff performing musical numbers for seated guests.

Karen's Diner, an American style diner famous for its rude staff who deliberately sprout expletives at customers, has shut down in Australia.

Karen’s Diner first launched in Australia through its Sydney city store in October 2021 and since then several more stores opened — another in Sydney, and one in Adelaide and Brisbane.

They also launched three pop-up Karen’s Diner restaurants in Melbourne, the Gold Coast and Perth.

The company announced last week that all three of these pop-ups had been shut down.

“Unfortunately, all good things come to an end and Karen can’t stay forever!” the post read.

“Today marks the closing of some of our Australian pop-up stores.

“If your local pop-up store has closed, there will be a Karen’s Diner On Tour coming to your city this September.”

This tour turned out to not be the case, because just days later, the company entered liquidation.

News.com.au contacted the liquidators.

The parent company of Viral Ventures Australia, Viral Venture Global, said all Sydney stores of Karen’s Diner remained open.

“As a result of the liquidation, pop ups in Perth, Gold Coast and Melbourne ceased trading,” a spokesperson said.

“Unfortunately rising costs of goods, interest rates, utility increases and a reduction of consumer spending impacted the business heavily.”

They said all the stores that had been shut were pop-ups, and that the permanent stores were still in business.

“Our other stores domestically and internationally are not affected,” the spokesperson added.

The chain also has stores in Indonesia, Singapore, New Zealand, the UK, Canada, and the US.

Karen's Diner at Surfers Paradise with a sign warning it has closed down.

The company is no stranger to controversy.

Karen’s Diner was forced to apologise in the past after staff took their rudeness act a little too far.

In July, an employee at the Brisbane store made sexually inappropriate comments to a 14-year-old girl and her father, saying the girl was on Only Fans and her dad was a paedophile.

The store was also called out for body shaming a bald man in Brisbane, slamming the joke as “cruel”.

And in November, the ABC reported staff were considering formal action over claims of sexual and physical harassment.

Karen's Diner attracted controversy.

The hospitality scene across Australia has been gutted in a post-pandemic world as the cost of living crisis rages, causing many cafes and restaurants to go bust.

On Thursday, news.com.au reported that a former franchisee of Sydney food chain Flipp Burgers had gone into liquidation.

Just a week earlier, a Sydney restaurant called Little Viet Kitchen and two Hog’s Breath cafes in NSW also went bust.

Last month, national restaurant chain Sushi Bay also collapsed, with its last remaining Sydney, Darwin and Canberra branches ordered to shut down, amid allegations that workers had been underpaid $650,000 over a number of years.

In March, a popular bar and burger joint in Melbourne’s inner city, The Beer & Burger Bar, went into voluntary liquidation owing around $500,000 to 10 unsecured creditors.

Also in March, Sydney’s Jellyfish Cafe, in the northern beaches, which specialised in seafood dishes and brunch favourites, went into liquidation after nearly two decades of operation.

— With NCA Newswire