Staff at Oppy's restaurant in Corner Brook arrived at work Friday morning to find the front door padlocked and wrapped in chains.
Chef Dwayne Ruth said he had no idea the restaurant was going to close.
He said it couldn't have come at a worse time.
"I got rent, I got car insurance. I got a kid at home," Ruth said. "Christmas and all this. Thinking I was working and actually going to save money and stuff like that. And now to be going back on unemployment this time of year, it just hurts."
Dispute with landlord
Renee Marquis, the owner of Oppy's, said she had been in a dispute with the building's owners, and the landlord put the locks on the door.
She said she planned to keep the restaurant open until after Christmas.
"I think you can say the location is not suitable for this particular endeavour," said Marquis.
She said she had instructed that all staff be notified that the restaurant was closed, but that didn't happen.
Marquis was a former KFC franchise owner.
But she announced last July that she was converting her 10 KFC outlets into home-style restaurants that would serve healthier fare, under the name Oppy's Diner.