Karen’s Diner: Inside the troubled history of the controversial restaurant chain before its $4.3 million collapse

Karen's Diner: Inside the troubled history of the controversial restaurant chain before its $4.3 million collapse

A controversial restaurant chain that gained a short-lived reputation for its deliberately rude waiters and ‘terrible service’ endured several store closures, customer complaints and dozens of bad reviews before its $4.3 million collapse.

Viral Ventures Australia, which owns Karen’s Diner and Broadway Diner, confirmed the restaurant chain went into liquidation on May 30.

The company now has $4.3 million worth of debt, with 56 creditors demanding the money they are owed this week.

Here, Daily Mail Australia reviews some of the chain’s most controversial moments, including calling a father a ‘pedo’ in front of his children, poking fun at a diner’s hairline and telling a woman she looks ‘bulimic’.

A popular but controversial restaurant chain that built its reputation for insulting customers in the name of fun has gone bankrupt owing $4.3 million.

Viral Ventures Australia, which owns Karen’s Diner and Broadway Diner, confirmed the restaurant chain went into liquidation on May 30.

Low start

Karen’s Diner opened its first store on Sydney’s George Street in October 2021, followed by franchises in major hubs such as Melbourne’s South Bank in April 2022 and Surfers Paradise in Queensland in July 2022.

Last September, the company announced plans to open a restaurant in Ipswich’s Riverlink shopping center in southeast Queensland.

Viral Adventures director Aiden Levine said the store will launch in mid-November 2022 and asked fans to keep their ‘eyes peeled’ for updates.

However, the shop was not opened.

The announcement of several new franchises came as Karen’s Diner was becoming more widely known for its unorthodox approach to management.

Employees are encouraged to be purposefully rude to customers, but several have publicly complained that their servers have gone too far in some cases.

Viral Ventures Australia is now $3.4 million in debt, with 56 creditors filing claims for the money they are owed.

Karen’s dinner is bound to apologize

Last July, the restaurant famous for insulting their patrons was forced to apologize after a Queensland family complained that the jokes got out of hand.

Stacey Howard was dining with her family when she was ‘disgusted’ by a waiter at Karen’s Diner in Brisbane’s Westfield Charmside.

Mr Howard claims the waiter overstepped his bounds by making several sexual insults to the family serving his table, including calling him a ‘pedo’, accusing him of molestation and asking his 14-year-old daughter if she had an OnlyFans account.

OnlyFans is a subscription-based website where people pay to access a person’s private photos and videos, usually of a sexual nature.

‘My daughter was doing a Facebook Live and this guy came up and said, ‘Are you just a fan? – Here’s some content for you’ and he pretended to curl up and jizzed on the table,’ he told the Courier Mail.

Mr Howard said his daughter was worried after the waiter called her father a ‘pedophile’ and that he was ‘keeping it in the family’.

‘My daughter sat on my lap because she was worried and she said, ‘Are you a paedo? Are you all having sex with each other?”

Stacey Howard was dining with her family at Karen’s Diner in Brisbane’s Charmside on Sunday when she was ‘disgusted’ by a waiter.

The outraged father said the family stood up and left the diner feeling incredibly uncomfortable about the comments.

He claimed that a seven-year-old boy eating at the restaurant was also called a ‘c***’.

Mr Howard’s family later called the restaurant to demand an apology.

Karen’s Diner may be known for its rude waiters, but the restaurant lists some rules on its website that set boundaries for customers and staff.

The website reads, ‘No racism, no sexism, no homophobic comments, no body image comments, no ableist comments, no touching of our staff and no sexual comments towards staff’.

A Karen’s Diner spokeswoman apologized to the ‘full’ family and told Daily Mail Australia the incident was being investigated.

This incident was raised directly with us and we are currently conducting a thorough investigation,’ he said.

‘As a venue, we are providing a fun experience for all patrons. We have strict guidelines for both staff and customers, so we are really disappointed to learn of this incident on Sunday.’

An upset customer blasted staff at a Brisbane Karen’s diner after an employee allegedly made fun of her receding hairline.

Hairline jokes are taken too far

Just months after the ‘OnlyFans’ incident, a disgruntled Karen’s Diner customer complained after a staff member allegedly made a joke about her hairline.

Bec Hardgrave, a Queensland health coach, posted a now-viral TikTok video of her experience at the restaurant in September 2022, telling followers: ‘Get this, they told this guy his hairline receded and that’s what he did’.

‘What does your king’s sign say? No body shaming!’ The man can be heard shouting as he points to the house rules at the entrance.

Ms Hardgrave said she was at the restaurant when staff threw a cup at her table and told a friend she needed to brush her hair.

‘My friends and I went to Karen’s for dinner, and it’s safe to say I probably won’t be back,’ she told her followers in the video.

‘I know they paid you for nothing, but it was a bit too busy. They were making offensive comments about people’s looks.

‘They told my friend to comb her hair, that’s how bad it is. They told my other friend he was too old and threw cups at us.’

Impressive Cherie Hart (pictured) Karen’s diner waitress told her she looked ‘bulimic’

Dominant is told by the waitress that she looks ‘bulimic’

Social media star Cheri Hart said she ‘didn’t think it was a big deal’ when the incident happened because I thought they did it.

‘When finding out (its policy is) ‘no body shaming’ when I post.’

The drama unfolds when Hart and a male friend order desert.

She ordered ‘Karen’s Seasonal Waffle Bowl and Nutty Karen’.

The waitress looked at him disapprovingly and said: ‘You realize the dessert is huge, I doubt you’ll eat it.

‘You look like you’re bulimic.’

Hart replied with an ‘uncomfortable smile’.

The waitress confirmed it, saying: ‘You laughed, so I must be right.’

Karen’s Diner staff are encouraged to be intentionally rude for entertainment purposes

Karen’s dinner can be ‘incredibly dangerous’

In August 2022, a clinical psychologist warned that parents should think twice before exposing their children to abusive rants heard inside Karen’s Diner.

Associate Professor Helen Stallman of the University of the Sunshine Coast said staff behavior could be ‘problematic’ for young diners.

“Any exposure to abuse is really problematic for kids,” he told News Corp.

‘They don’t have the cognitive ability to screen things out, and having said that, many adults don’t.’

Professor Stallman said customers may dwell on a nasty comment they received from staff at a diner for months after the experience.

A customer allegedly called a ‘dirty ranger’

In September 2022, a young woman detailed how a waitress at Karen’s diner made her cry after calling her a ‘dirty scumbag’.

‘I love roleplay, improv, acting, all these things so I was very excited,’ she told TikTok.

‘But it was really scary, it was uncomfortable. They just literally beat me up. About my hair. They said some horrible things and they weren’t even creative about it.

She said a staff member called her a ‘dirty rag’ and told her to ‘fix her hair’, something she hadn’t been spoken to since high school.

‘It was really triggering, I actually started crying when the waitress was talking to me like that and I asked her to stop, and she said no,’ she said.

Another woman, who goes by the TikTok username @clanciitalks, said she was ‘so excited’ to go to Karen’s diner but a waitress ‘raped’ her by her hair.

Shop closed suddenly

In June 2023, Karen’s Diner announced that three locations in Surfers Paradise, Perth and Melbourne would be closing.

It marked the end of an era for the chain in Victoria and Western Australia.

‘Unfortunately, all good things come to an end and Karen can’t last forever! Some of our Australian pop-up stores have closed today,’ the company wrote on Facebook.

‘If your local pop-up store is closed, Karen’s Diner on Tour is coming to your town this September.

‘Karen can’t stay away and you have to give her a piece of her mind.’

A former employee said they were told to tell customers the store was just a pop-up, even though employers had previously said it was permanent.

‘Now I’m told it was a pop up that ran its course and now it’s time for their next big venture … it’s all flopped,’ they told Newscorp.

There is only one store in Adelaide, one in Brisbane and two in Sydney.


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