A Banjo's representative contacted employees late on Sunday to advise that the franchise had gone into voluntary administration, effective from Sunday evening.

The franchise employed 15 staff, including three full-time apprentice bakers, with most staff younger than 25.

Banjo's Bakehouse managing director Peter Baily said he was surprised to learn of the franchise owners' intentions to close.

Mr Baily said once he had spoken with the owners and the administrator the company would search for a buyer.

"We're keen to maintain a presence in Bendigo," he said.

Former Banjo's sales manager Anthea Nicolson said the closure "wasn't a big shock." "The business hasn't been as productive recently as in previous years," Ms Nicolson said.

She said staff were told they would receive their accrued entitlements, but they may face a three-month wait.

Bendigo Chamber of Commerce and Industries president Graeme Sloan said businesses were operating in a "very tough climate… and it was becoming more difficult with increasing costs."

"To see any business go into administration is disappointing for the region as well as the business," Mr Sloan said.

"With the current skills shortage, hopefully those people won't be unemployed for too long."

The Advertiser was unable to speak with the franchise owners yesterday.