The abrupt closure of local Mexican restaurant Yo Loco has exposed allegations of unpaid workers and trashed rentals, but the owner of the business claims it’s not the full story.
The Batt Street restaurant and play centre has been closed since last week, and issued a statement over the weekend confirming its closure.
“We are reaching out with heartfelt thanks for your support and to share that our current location has now permanently closed. This was a difficult decision, and we’re truly grateful for the many wonderful memories you helped create,” the statement read.
That “difficult decision” seems to have been forced on the business, after its real estate changed the locks due to a breach of lease, revealed by a sign on the door last Friday.
“The locks to these premises have been changed due to breach of lease,” the sign said.
Yo Loco owner Brent Grundy claims the locks were changed due to a dispute between him and the real estate agency over air conditioning.
“It was about the landlord’s failure to meet their lease obligations. Under the lease, the building must be fully air-conditioned,” Grundy said.
“Every entertainment tenant in the complex has struggled with the landlord’s ongoing failure to repair the air-conditioning, which has severely impacted business.
“Two buildings now sit empty due to simple issues that could have been easily fixed. Instead, they’ve chosen inaction – costing themselves hundreds of thousands in lost rent and now facing a lawsuit that will run into the millions.”
Grundy claims the business lost 60 per cent of its incoming during the school holidays due to the air conditioning issue.
“The decision to stop paying rent was simple: the cost of lost revenue due to heat was far greater than the rent itself. We’re not paying for a non-functional space. The landlord’s failure to uphold their side of the lease left us no option,” he said.
Since the closure of Yo Loco, a nearby business owner, Michael Dempsey, has voiced his concern over how the building was left.
“They just trashed the joint and made sure that nothing inside that building was salvageable for whoever takes over that complex,” Dempsey said.
Grundy responded to these claims saying they were defitting the premises as required by the lease.
“[The real estate] instructed that a defit of the premises was required as part of the lease. We immediately began that process in good faith,” Grundy said.
Dempsey is angry because he believes the “trashed” state of the building devalues the businesses left in the complex.
“I’m very passionate about this because this is my business, and I care about the people in here,” Dempsey said.
“Now, I’ve got two empty buildings on either side of me that aren’t bringing business into the complex. It makes the complex look lame or drowsy because we’ve got a trashed building there and a trashed building there. They’re not just empty, they’re trashed, and the public can see that.”
Adding to concern, Dempsey has been in contact with a group of former Yo Loco employees, all aged between 14 and 15-years-old, who are alleging they have not received their wages for weeks leading up to the closure.
Grundy responded to the claims of unpaid staff by saying the money will be delivered to them in due time.
“Some staff have already been paid out. Our admin team has been working around the clock, refunding over 200 party bookings in the past few days,” Grundy said.
“While a few staff are still owed money, this will be resolved in the coming days.
“It’s important to note that some staff are on monthly payment cycles and others on weekly, which is why there may be slight timing differences.
“I’ve spoken with the administrators, and they’ve confirmed that a meeting will be held with all staff shortly to explain the process and assure everyone that all entitlements will be paid in full.”
Grundy is the former owner of Flip Out but sold the rights in 2017 and no longer has any ownership, shares or royalty as of November 2020.
Emily Chate
Emily Chate joined The Western Weekender in 2024, and covers local news - primarily courts and politics. A graduate of the University of Wollongong, Emily has contributed to The Daily Telegraph and worked as a freelance journalist.