Tri-Cities Sonic Locations Closing Forever? Now We Know Why
The Kitsap Sun (paywall) and other outlets report the headquarters of Sonic Industries LLC filed a lawsuit against the franchise owner of Sonic Drive-In's in Washington and Oregon. Two of those affected by the lawsuit are the newly closed locations in Kennewick and Pasco. What is in the lawsuit and what does it mean for the Tri-Cities?
Court documents for the lawsuit are reported to show "Sonic had delivered a written notice of default and potential termination of license agreement for the SONIC restaurants located in Kennewick, Pasco, Wenatchee, Yakima, Ferndale, Poulsbo, Renton and Ellensburg." The documents go on to explain that the reason for the lawsuit was the "franchisee’s failure to pay almost $2 million in royalties and fees required under their license agreements. The company reported not having received any payments since October of 2021."
The owner of the franchise locations "Poulsbo-based franchisee, Olympic Cascade Drive-Ins LLC," was filed the complaint announcing the forfeit of the Sonic brand on June 2, 2022, from Sonic Industries LLC. Previously it was not known why all local locations had suddenly closed without warning or explanation. Well, now we have the answer, and it turns out to have been years in the making.
After a long fight with the franchise owner, the documents report that in "late November 2021, Sonic terminated the franchisee’s license agreement due to not fulfilling their financial obligations in paying royalties and fees." It also states that Sonic Industries LLC "offered the franchisee the opportunity to continue operating the restaurants for 90 days (until late February 2022) in order to sell the restaurants." After no progress the LLC moved to deliver a "notice of “Immediate Termination” of license agreements for all of the restaurants, demanding they cease operations under the SONIC brand, remove all SONIC brand signage and pay the outstanding royalties and fees, an amount now exceeding $2 million" in May of 2022.
In August it is reported the court ordered the franchise to "cease operations under the SONIC brand and take down SONIC brand signage. Compliance was to be demonstrated to the court within 10 days of the order." The lawsuit is still open and there has been no announcement of an agreement. The Wacom News reports a sign at their location that says "Sonic Will be Closed Effective 8/31/2022 until Further notice. We are transitioning to new ownership. We truly appreciate your patience and understanding." No word yet on if Tri-Cities will be switching ownership or closing for good.