THE owners of Donut King in Marketown have shut their doors claiming they cannot afford to renew their lease because it obligates them to do a fit-out that is beyond their means.
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Russell and Deborah Longhurst bought the franchise five years ago after working for 31 years supporting the homeless at a local charity.
"Russell thought why not buy a franchise because it's a known business and they offer support," says Mrs Longhurst.
She said the couple paid $200,000 for the operation, owned by Queensland-based Retail Food Group, by using equity on the mortgage of their Mayfield home.
However she said the couple had decided to not renew their agreement with RFG and lease with Marketown owner AMP Capital because the new lease required that they complete a "major fitout" to the value of $66,000.
"The shop is eight years old, we are the second owner, and there has never been a refit," she said. "It needs an uplift but $66,000 is a lot.
She said RFG and AMP Capital had requested a fitting including new flooring, electronic menu boards, painting and furniture.
The couple did not dispute the shop needed a fitout but said they used their own trade people, and if the couple decided to use their own it came with the risk that it might not be approved.
The Donut King lease expired on August 31 and the couple gave 30 days' notice before vacating on Friday, October 26.
The couple has already sold their home two years ago to prop the business up.
"It's bittersweet, I didn't want this," she said. "We have built up customers and worked extremely hard at customer service and have great staff and regulars who have been our life and family."
Mrs Longhurst conceded that the process of signing contracts had been overwhelming in a period of pressure.
"There are deadlines to meet and yes, I read every single word in the contract but the contract is 600 pages long and the solicitor said, 'Look do you want the cheaper version or more expensive,' of course we said the cheaper, we received the details in brief," she said.
She said the situation had been tough on her marriage and she wanted life to return to normal: "At 57 I didn't expect life to be like this."
A RFG spokesperson said the company had explored "a wide range of options" to support the Longhursts in their franchise and "subsequently exit, as per their wishes".
Franchise partners knew "from the outset" they would have to do a refurbishment upon lease renewal and RFG had worked "closely" with the Longhursts and offered "extensive" support in a bid to reduce their refurbishment and refitting costs.
"The Donut King management team undertook frequent store visits, phone calls and emails to all parties in an exhaustive effort to achieve the best outcome for the franchisees," the spokesperson said.
This included face-to-face consultations with the Longhursts and landlords to try and work through issues and a proposed refurbishment solution and a new "brand proposal" that included a temporary rent reduction of 50 per cent and reduced fees.
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