The closure will allow father-and-son founders David and Gareth Atkinson to concentrate on their recently launched national retail business, with their meatballs now available in the North of England at Tesco and Asda.
In a statement issued to BigHospitality's sister publication MCA Insight, they said they remained open to a return to food service but for now would leverage their popularity to drive the retail business, with a further supermarket deal to be announced.
The pair said they were also looking at product variations for the domestic and overseas markets.
Yorkshire Meatball Co's meatball and craft beer bar opened in early 2014. The founders told MCA at the time of their first anniversary they were trading well in the market town despite a crowded restaurant scene.
They had hoped to open further sites across the North and UK, and did launch a second site under a franchise deal at the Indigo Hotel in York, but it was wound up in July 2016.
Earlier this year they raised £123,000 in a crowdfunding campaign to launch the meatballs retail business into supermarkets and roll out franchised restaurants UK wide.
A statement posted on their website said: “It is with great sadness and regret that, faced with continuing difficulties in recruiting restaurant staff following the influx of chain restaurants into Harrogate, we have taken the difficult but commercially-important decision to permanently close our restaurant until further notice.
“The closure of the restaurant business is particularly disappointing for us, considering the years of planning and hard work that went in to ensuring the concept was a success. We will, without a doubt, miss serving our Balls to you, and certainly hope to return with a food service concept in not-too-distant future.
“However, this decision will allow us the time and focus required to make the national launch of our retail Balls a success… ensuring as many people as possible, all across the UK, are able to enjoy our unique taste of Yorkshire.”