Tasty Plate lost $920,000 over the past four years, which Brophy Family and Youth Services had absorbed in an attempt to keep it afloat.
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Chief executive officer Francis Broekman told The Standard the Warrnambool cafe and catering operation, which trained people with a disability, had not been viable for many years.
Responding to The Standard's editorial which questioned Brophy's handling of the closure and asked why financial details had not been made public, Mr Broekman also issued an apology to the community, staff and participants.
"This is the equivalent of Brophy contributing to Tasty Plate in the order of $200,000 per year since COVID," Mr Broekman said.
"A further contribution by Brophy has been that it has provided its administration support including HR, IT, finance, free of charge, including not paying any rent towards utilising the premises.
"Brophy has also invested $2.2 million of its reserve funding to purchase and renovate a facility for Tasty Plate to provide the best opportunity for success."
Mr Broekman said Brophy had hoped the business would rebound after the COVID-19 pandemic.
But he said it hadn't.
"We are very saddened that we haven't been able to encourage people to be part of the amazing experience at Tasty Plate," Mr Broekman said.
"It is a niche area where we support participants to reach their goals towards building their independence and potentially moving into open employment. That has been its goal and mission."
Mr Broekman apologised for the sudden closure, which affected 19 staff members and 14 NDIS participants.
"I am sorry that the announcement of the closure has been so sudden for the participants, their families and the community," he said.
"Even though we had taken some heavy losses, we still believed in the service, the model, the participants and the wonderful Tasty Plate staff. That's why we continued to put our best foot forward and maintain our optimism. We kept talking up its great stories, and its importance in the community.
"And in so doing, we couldn't reveal the serious concerns Brophy was facing as we felt we would inadvertently be running it down and contributing to its unviability."
Mr Broekman thanked the community for its support of Tasty Plate.
"Unfortunately, in a market-driven environment, no matter how good our story and level of community support, we just couldn't build the participant base to a viable level," he said.
"There is no fault on any side, everyone tried their best, especially our participants who so enjoyed coming to Tasty Plate, the staff who gave their all through their passion and love for the participants, and the community who supported the venture.
"I believe the community has now seen how we can be inclusive for all.
"I hope that the community can get behind the other wonderful disability service providers in our community and support them to remain viable and appreciated.
"We are very willing to share our IP and the Tasty Plate brand to support any local NDIS-accredited not-for-profits across our region."