Fears are growing for the future of a popular restaurant chain after it closed dozens of its branches.
Shari’s, known for its award-winning pizzas, once operated about 100 restaurants in the Pacific Northwest, California and Idaho, but that number has now dropped to 60.
The closures, including seven in the past five months, come amid reports of unpaid bills, large back taxes and even eviction notices at some of its locations.
The chain’s position appears increasingly uncertain as it faces legal battles in Washington, Oregon and Idaho.
The family-style restaurant chain, first opened in 1978, owes the Washington State Department of Revenue nearly $1.3 million in back taxes.
Shari’s has closed more than 40 branches due to unpaid taxes, rent and other bills
The state issued three tax payment orders between October and December of last year.
There are also at least 11 debt collection cases filed against the company in the state since 2020.
In addition, Shari’s owes Idaho about $220,000 in back taxes and the State Tax Commission has placed six liens against its management company.
In addition to this, two landlords filed eviction notices after failing to pay rent.
A Kitsap County, Washington, landlord is owed more than $150,000 in unpaid rent.
Shari also reportedly owes six-figure sums to other businesses, including construction, plumbing and marketing services companies.
Sarah Thomas, president of Charlton Marketing, told local news that the chain owes its advertising agency more than $100,000 in unpaid invoices.
“I had to lay off staff. I had to take a hard look at my bottom line,” Thomas told KGW 8.
“For Shari, I don’t know how much money that means, but for us it means a lot.”
Retail experts say the branch closures are not surprising.
“Full-service concepts have had a hard time raising money,” said Aaron Allen, founder of global restaurant consultancy Aaron Allen & Associates. The News Tribune newspaper.
Allen said rising costs of labor, food and rent since the pandemic have left chains struggling.
“All three have grown at a faster rate than they are able to increase their menu prices,” he said.
While Allen doesn’t expect the chain to close its remaining stores immediately, he could foresee a possible “slow withdrawal from the retail landscape.”
Shari’s is known for its award-winning pies and home-style cooking.
The family-friendly restaurant has closed about 40 locations in recent years.
Shari’s is the latest restaurant chain to struggle with rising operating costs and inflation-weary customers dining out less often.
Mediterranean chain Roti filed for Chapter 11 bankruptcy protection last month.
Most 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 seen its share of troubles, filing for bankruptcy in May and closing nearly 100 restaurants.
Just one month later, Mexican chain Rubio’s closed 48 branches in the state and also declared bankruptcy.
BurgerFi, which markets itself as an upmarket McDonald’s, sparked fears of mass closures after warning in August that it might shut down.
Hooters has also closed dozens of its restaurants in recent months, blaming rising rent and food costs.