California-based doughnut chain Johnny Doughnuts is closing half of its six state locations, a move that will result in the layoff of 34 employees.
The company announced the closures on Monday, marking a significant contraction for a business that had been in an aggressive growth phase.
Johnny Doughnuts Layoff of 34 Employees
Three Storefronts Cease Operations in San Francisco, Santa Rosa and San Jose
The closures affect three specific storefronts: the Pacific Heights location in San Francisco, the Santa Rosa shop at 1200 4th Street, and the newest addition at Santana Row in San Jose. According to the company, these locations ceased operations as of Monday.
The chain will continue to serve customers at its three remaining sites: the flagship store in San Rafael, the Marin Country Mart location in Larkspur, and the Napa outpost at the Oxbow Public Market.
Company spokesperson Sarah Segal confirmed that these core shops will continue operating as usual, and that the business’s mobile catering and event services remain unaffected by the current restructuring. The company stated that no further layoffs are planned for the remaining staff.
Craig Blum and Kim Diamond Decision to Over-expansion
Reasons for the Retrenchment
Co-founders Craig Blum and Kim Diamond attributed the decision to over-expansion. In an email sent to customers on Monday, the owners acknowledged that they had assumed more financial obligations than the business could sustain.
We expanded too quickly,
Blum told the San Francisco Chronicle. The business couldn’t support all these operations going forward.
Blum noted that the decision to shutter half of the chain’s footprint was difficult, involving many tears shed and sleepless nights.
The company intends to shift its focus toward Marin and Napa, where management reports the strongest sales and highest foot traffic. Regarding the financial difficulties, the owners wrote, Over the past couple of years, we took on more financial obligations than our business could carry. That’s on us.
Food Truck Origins of Johnny Doughnuts
A Decade of Growth and Evolution
Johnny Doughnuts began in 2012 as a food truck operated by Blum and Diamond. The brand quickly gained a following for its classic, handcrafted offerings, which include apple fritters, cinnamon rolls, and a signature crodough
—a croissant-doughnut hybrid. Their products are made using locally sourced ingredients, such as flour from Petaluma’s Central Milling and dairy from Clover Dairy in Sonoma.
The couple opened their first brick-and-mortar cafe in San Rafael in 2013. Following this initial success, they expanded to Hayes Valley in 2017 and the Marin Country Mart in 2018. The Hayes Valley location subsequently closed in 2022, the same year the company opened the Pacific Heights store.
The chain’s most recent expansion efforts included the opening of the Santana Row and Napa locations this past summer. While the company had previously explored potential growth into the East Bay and Petaluma, those plans did not materialize.
Despite the current setbacks, the founders expressed a commitment to the company’s future. We are a small company, and we’re really determined to continue to serve the communities that we’ve been involved with for so long,
Blum said. The company has stated it is committed to supporting the employees affected by the layoffs. Customers with inquiries regarding the transition have been directed to contact the company via email.
