Shari's Restaurants face financial problems, KGW reports: Unpaid bills, taxes, eviction notice from Bend for unpaid rent

PORTLAND, Ore. (KGW/KTVZ) — Shari's is a Pacific Northwest institution. The family-run restaurant is known for its award-winning pies and midnight specials. But KGW reports that court filings and public records indicate the Beaverton-based chain is now facing difficult times, including unpaid bills, back taxes and eviction notices.

At least seven Shari's restaurants in Washington and Idaho have closed unexpectedly in the past five months.

Sara Thomas, president of Charlton Marketing, said Shari's Management Corporation owes the small Portland-based advertising agency more than $100,000 for its work on a marketing campaign last year.

“I had to lay off employees. I really had to look at my bottom line,” Thomas said. “For Shari's, I don't know how much money that means to them, but for us it means a lot.”

Other suppliers, including a construction company and a plumbing company, also have unpaid invoices.

And two property owners have filed eviction notices. In August, a property owner in Bend sued Shari's Management Corporation for unpaid rent, court records show. In Kitsap County, Washington, a lawsuit alleges the restaurant chain has racked up more than $150,000 in unpaid rent.

In addition, the Idaho State Tax Commission has six active tax liens against Shari's Management Corporation totaling approximately $220,000 in unpaid taxes.

Shari's Management Corporation did not respond to several phone calls or emails from KGW. The company's headquarters in Beaverton was empty. Representatives at the company's offices in Dallas, Texas, could not be reached.

Shari's opened in Hermiston in 1978. The restaurant chain has more than 60 locations in Oregon, Washington, California, Idaho and Wyoming, according to the company's website. The hexagonal restaurants brought families together and often served as a late-night hangout for high school kids.

“It's very close to the neighborhood. I grew up here and went there a lot,” said Deanna Kavanaugh, standing next to her mother in front of Shari's in Garden Home.

“It's getting harder and harder to find places to go with the family. It's really a family restaurant,” said Kavanaugh's mother, Charlotte Honse.

A long-time customer commented on one of his recent visits that the restaurant felt a bit empty. Some items on the menu were unavailable.

“They talked about how some things were out of stock,” said Jennifer Germundson, who visited Shari with her four grandchildren.

In 2023, a private investment firm invested in Gather Holdings, LLC, the parent company of Shari's Restaurants and Coco's Restaurants. Financial terms of the deal were not disclosed. “This new capital will ensure our restaurants can continue their recovery from the challenges of the COVID-19 pandemic,” Sam Borgese, owner of Gather Holdings, said in a press release.

The company indicated that the investment firm would assist with video lottery operations at its Oregon locations, the press release said.

In 2023, Shari's Restaurants generated $34.7 million in video lottery revenue and earned $7.5 million in lottery commissions, according to data posted on the Oregon Lottery website.

Despite the cash injection and video lottery revenue, the Beaverton-based restaurant chain appears to be struggling with mounting bills and lawsuits.