Doesn’t pay to be rude: Karen’s Diner restaurants close as owner goes bust

The owner of the Karen’s Diner restaurants, infamous for its staff being deliberately rude to customers, has gone under two years after the cheeky concept was born in Sydney.

Viral Ventures, which owned most but not all the Karen’s Diner restaurants, gave notice at a general company meeting on May 30 that it would be wound up with liquidators from Wexted Advisors appointed to the process.

Multiple Karen’s Diners, which were labelled “pop-up” stores, were shut before the liquidation, but at least three other more established diners including those in Melbourne, Perth and the Gold Coast have now been closed.

The chain of fast-food restaurants, which marketed itself on its deliberately bad service and rude staff, went viral on social media following the opening of its first store in Sydney’s World Square in 2021, with its website listing 18 store locations this year.

A source with knowledge of the situation said that the Karen’s Diner restaurant in Sydney will remain open, with the ownership of the site transferred from Viral Ventures to another entity earlier this year.

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The liquidation process is still in its early stages but a combination of tougher macroeconomic conditions, uncertainty in a post-COVID environment and increased labour costs and lower turnover led the company to have insufficient funds to cover its debts.

In an Instagram post on May 30, Karen’s Diner confirmed it would be closing some of its pop-up stores but hinted at a return.

“Unfortunately, all good things come to an end and Karen can’t stay forever,” it said, adding that “if your local pop-up store has closed, there will be a Karen’s Diner On Tour coming to your city this September. Karen can’t stay away and needs to give you a piece of her mind.”