Doughnut Plant Temporarily Re-Shutters All NYC Locations Due to Financial Fallout from COVID-19

Doughnut giant Doughnut Plant has temporarily closed all of its New York City locations for the second time this year due to the COVID-19 crisis, owner Mark Isreal tells Eater. The chain had initially closed all seven of its NYC locations in March following the shutdown on dining in, but reopened three locations for delivery and takeout in May, followed by a fourth one in June.

Now, Isreal says he’s been forced to close all locations again, at least through the end of August, due to financial downturn caused by the pandemic. In a message posted to the doughnut chain’s website and social media pages, Isreal outlines the reasons behind the closure including mounting fixed costs like rent, and a decline in customers, prompted in large part by several New Yorkers leaving the city due to the pandemic, Isreal says.

“Time is running out for small businesses,” says Isreal. “Especially bakeries and cafes.”

Isreal is currently in negotiations with his various landlords to come to new agreements on rent, but says he was forced to shut down the stores to save on all other expenses. His Paycheck Protection Program loan — the federal stimulus package for businesses — has largely run out, he says, and Isreal has once again had to lay off all the employees he rehired following the reopening.

“It is very upsetting for me to see my employees having to keep going through this,” Isreal says. Prior to the pandemic, Isreal employed more than 100 staffers at his various Doughnut Plant locations. With only four locations — Downtown Brooklyn, Long Island City, Williamsburg, and the Lower East — open for takeout and delivery in the last couple of months, a smaller number of staffers were rehired back.

Isreal says federal action is imperative to keeping businesses like his open. He says a second round of PPP funding is critical for his business to stay open, and also called for the federal government to pass the Blueprint for Restaurant Revival, a $120 billion recovery effort that includes that second round of PPP funding, and increased funding for economic disaster loans, among other measures.

“We have to get some kind of action so all these small businesses and cafes can make it through the other side,” Isreal says.

Doughnut Plant celebrated its 25th anniversary last year. Isreal started the business from his Lower East Side tenement in 1994, and started off by making doughnut deliveries on his bicycle. The business gradually expanded in subsequent years and he opened his first shop on Grand Street, on the Lower East Side, in 2000. Known for its inventive new specials and for the fact that it offers both cake and yeasted doughnuts, the chain is one of the most popular doughnuts shops in the city. The success propelled Doughnut Plant to open locations in Tokyo as well.

For now, Isreal hopes to reopen in September, but says he has to secure more funding in order to continue either through investors, federal aid, or through new rental agreements at his stores.