YOGURTLAND Australia will permanently close its doors next month, leaving about 200 employees out of work from 11 stores on the same day as the JobKeeper employee subsidy comes to an end.
Owner Newcastle accountant Paul Siderovski, a Tony Robbins convert and business motivational speaker who had grand visions of opening up to 50 Yogurtland stores across Australia in five years, blamed the collapse of the frozen yoghurt chain on the COVID-19 pandemic.
Stores at Green Hills Shopping Centre at East Maitland, Newcastle West's Marketown and Glendale, are among those closing.
Mr Siderovski, who is the founder of Newcastle's SiDCOR Chartered Accountants, came across the business model on holiday in Hawaii and bought the Australian rights to the franchise in 2013.
The collapse of the business, that has three corporate stores in the Hunter, two on the Central Coast, four in Sydney, one in Canberra and one at the Gold Coast, follows a mutiny from all franchisees several years ago after stores failed to perform as expected.
The Newcastle Herald revealed in 2019 how Yogurtland Australia gouged its franchisees by inflating costs for their stores, selling used yoghurt machines from failed corporate stores for almost double the cost of new ones.
At the time Mr Siderovski said Yogurtland made no profit from the shop fitouts.
Four couples from the Hunter and Central Coast signed on as franchisees and opted out of their struggling stores amid claims of large financial losses.
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Traditionally a self-serve model, Mr Siderovski said strict new food hygiene standards due to the pandemic meant Yogurtland had struggled since it temporarily closed last April and re-opened a few months later.
Since re-opening staff have been required to add toppings to each frozen yoghurt order.
Mr Siderovski described the decision to fold the business as "heart breaking" and said Yogurtland had employed "thousands of people" over the past eight years.
"In spite of the best efforts of all staff, we are no longer able to move forward into the future, with sales being down over 30 per cent due to COVID-19," he said.
"The company has also been impacted by the increased cost of products and labour combined with a significant increase in the risk of the yoghurt supply from the USA due to the extent of the COVID-19 crisis in California."
Staff who spoke to the Newcastle Herald said some stores had been "really struggling" for some time and "were almost like a ghost town in terms of retail" before the pandemic hit.
One employee said workers were instructed not to speak to the media about the closure, that many suspected had been coming for some time.
The stores will close on the same day as the federal government's JobKeeper employee subsidy ends.
"Even before COVID there was a lot of concern among workers about if the business would survive," a worker said.
"Some stores were not doing so great and maybe being propped up by others. It really depended on the location, I know a few stores were really busy."
Another worker described the "mad run" on frozen yoghurt as a "fad" that had passed.
"There was a real frenzy about it for a while and when new stores opened," she said. "Everyone wanted to try the healthy alternative to ice-cream, but that real fad part of it fizzled out."
Mr Siderovski said government support and incentives had given Yogurtland the ability to keep people employed during the pandemic.
He said community "has been at the heart of Yogurtland" and the business had sponsored local sporting teams and organisations across Australia.
"However with our self-serve model now a thing of the past, our business is just not sustainable into the future," he said.
"I would like to thank all of the employees for their efforts and dedication to Yogurtland and I would also like to thank our customers, many of whom have supported us during these most difficult times."
The closure comes just months after Mr Siderovski's wife, Valentina, purchased a house in Ocean St, Merewether, for what was at the time a suburb record of $6.15 million.
The seven-bedroom, six-bathroom trophy home with stunning water views was purchased by Mrs Siderovski in September last year, after she sold an acreage at Black Hill for $2.6 million in late 2019 and two properties side-by-side at Bar Beach late last year.
At the time, the Ocean St purchase set a new suburb record for Merewether and was the second-highest result for the Newcastle property market.
This was surpassed by a $7.25 million sale in John Parade, Merewether, a few days later.