Fears are growing for the future of a popular restaurant chain after dozens of locations closed.
Shari’s, known for its award-winning pies, once had about 100 restaurants in the Pacific Northwest, California and Idaho, but that number has now dwindled to 60.
The closures, including seven in the past five months, come after reports of unpaid bills, high outstanding taxes and even eviction notices in some locations.
The chain’s position appears increasingly precarious as legal proceedings are underway in Washington, Oregon and Idaho.
The family-style restaurant chain, which first opened in 1978, owes the Washington state tax authorities nearly $1.3 million in back taxes.
Shari’s has closed more than 40 locations due to unpaid taxes, rent and other bills
The state issued three tax warrants between October and December last year.
Since 2020, at least 11 debt collection cases have been filed against the company in the state.
In addition, Shari’s owes approximately $220,000 in back taxes to Idaho, and the state Tax Commission has placed six liens on her management company.
In addition, two landlords have filed eviction notices because the rent could not be paid.
A homeowner in Kitsap County, Washington, is owed more than $150,000 in back rent.
Shari is also said to owe six-figure sums to other companies, including for construction, plumbing and marketing services.
Sarah Thomas, director of Charlton Marketing, told local news that the chain owes its advertising agency more than $100,000 in unpaid bills.
“I’ve had to lay off staff. I’ve really had to look at my bottom line,” Thomas told KGW 8.
‘I don’t know how much money it means to Shari, but it means a lot to us.’
According to retail experts, the store closures are not surprising.
“Full-service concepts have had a hard time raising money,” said Aaron Allen, founder of global restaurant consulting firm Aaron Allen & Associates The News Tribune.
Allen explained that chains have been struggling due to rising costs of labor, food and rent since the pandemic.
“All three have seen prices rise faster than the prices on their menus,” he said.
While Allen doesn’t expect the chain to immediately close its remaining stores, he does predict a “slow withdrawal from the commercial landscape.”
Shari’s is known for its award-winning cakes and home-made dishes
The family favorite has closed about 40 locations in recent years
Shari’s is the latest restaurant chain to struggle with rising operating costs and customers dining out less often due to inflation.
Mediterranean chain Roti filed for bankruptcy protection last month.
Recently, popular Italian restaurant chain Buca di Beppo closed 13 of its underperforming locations and filed for bankruptcy.
Red Lobster is one of the largest chains to have run into trouble. In May, the company filed for bankruptcy and closed nearly 100 restaurants.
Just a month later, Mexican chain Rubio’s closed 48 locations in the state and also filed for bankruptcy.
BurgerFi, which bills itself as an upscale McDonald’s, sparked concerns about mass closures after warnings in August that the company could go bankrupt.
Hooters has also closed dozens of restaurants in recent months as rent and food costs rise.