CHULA VISTA, Calif. (KGTV) -- Donut Bar in Chula Vista abruptly closed its doors Monday, just five months after opening at Eastlake's Village Walk shopping center.
A sign on the door said in part: "We have enjoyed serving this community and we appreciate all of the support you have shown us over the last 5 months. We will miss seeing your smiling faces and we will especially miss those of you who graced us with your presence almost every day."
Customers were shocked about the closure and told 10News the business would often sell out, with lines out the door.
The sign on the door also said: "Although our goal was to continue to serve you for the next 10 years, we have found that we are not able to do so under the Donut Bar brand. Finding an honest and supportive brand that aligns more with our mission to be successful and serve our community is essential to us."
10News reached out to the Donut Bar founder/CEO Santiago Campa, and he said he was blindsided by the closure. Campa sent 10News the following statement:
It is beyond regrettable that Donut Bar Eastlake has closed without notice. In an unforeseen turn of events our operators of the Donut Bar Eastlake [...] have abruptly closed their location. We understand how beloved Donut Bar is by the community of Eastlake and pledge to continue servicing the community. Donut Bar opened in Eastlake by popular demand and has enjoyed overwhelming success, support and praise.
We have reached out to the operators and extended job placement for their current employees. Our hopes are that we will be able to place them immediately. We wish everyone at Donut Bar Eastlake all the best.
Thank you for your support and you can continue to enjoy Donut Bar at our downtown location at 631 B St. San Diego [google.com] .
However, the franchise owners of the Eastlake location said that was not the case, referring 10News to their lawyers. In a statement, the attorney said the franchise owners "filed for arbitration against Sweet Assets Franchise Group (SAFG) for violations of the California Franchise Investment Laws and common law breach of contract, fraud and misrepresentation."
The statement continued: "...failure to disclose information regarding people associated with the management and/or operation of Sweet Assets Franchise Group, failure to provide disclosures on past or present litigation and bankruptcies of SAFG or those involved with its operation and management as well as claims we feel were misleading and improper as to the costs of getting into the business and the financial performance of the business."
In response to these allegations, Campa said, "One minute you're telling a franchisee they're failing to uphold your standards and they need retraining, and the next thing you know you're virtually the last to learn they're closing their doors [....] Sadly, this seems to be nothing more than an effort to damage the Donut Bar brand."
Donut Bar has locations in downtown San Diego, Las Vegas, and Temecula. A Scottsdale, Arizona location also abruptly shut down last month.