A significant legal dispute has emerged in the world of motorsports, as HMS Holdings LLC, an organization closely associated with the renowned NASCAR Cup Series team Hendrick Motorsports, has initiated a lawsuit against Hooters of America LLC. The lawsuit, which seeks a substantial sum of $1.7 million in unpaid sponsorship fees, along with accrued interest, has drawn attention to the ongoing tensions between the two entities.
According to court documents filed in Mecklenburg County, and first reported by The Charlotte Ledger on Wednesday, HMS Holdings LLC formally submitted its complaint on July 30. The allegations against Hooters include breach of contract and claims of unjust enrichment, suggesting that the restaurant chain may have benefited financially without fulfilling its obligations under the sponsorship agreement.
This legal action comes on the heels of the recent termination of a long-standing partnership between Hendrick Motorsports and Hooters. The motorsports team has asserted that Hooters failed to meet its business commitments, which ultimately led to the dissolution of their collaboration. The lawsuit not only highlights the financial implications of this fallout but also raises questions about the nature of sponsorship agreements in the competitive world of professional sports.
As the case unfolds, it will likely attract further scrutiny from both the motorsports community and legal experts, who will be keen to see how the courts interpret the contractual obligations and the claims of unjust enrichment. The outcome of this lawsuit could have significant ramifications for both parties involved, potentially influencing future sponsorship deals and partnerships within the industry.
Since 2017, Hooters has been a prominent multi-race sponsor for Chase Elliott, the 2020 NASCAR Cup Series champion, who drives the No. 9 Chevrolet Camaro for Hendrick Motorsports. Over the course of their eight-year collaboration, Hooters has featured its branding on Elliott’s car during 24 races. According to a complaint reported by the Charlotte Business Journal, Hooters was obligated under their sponsorship agreement to provide Hendrick Motorsports with four annual payments totaling $1.75 million, scheduled for March 10, June 10, August 10, and October 10. Hendrick Motorsports claims that Hooters made a partial payment of $45,000 in March but subsequently failed to deliver the payment due in June.
In its complaint against Hooters, the plaintiff stated, “Hooters has informed HMS that it will not be making any payments for the remaining two installments due for the 2024 term under the amended Sponsorship Agreement, specifically those due on August 10, 2024, and October 10, 2024. With no other options available to safeguard its rights and interests, HMS has initiated this legal action to uphold its contractual rights.”
Racing America On SI has reached out to Hendrick Motorsports for a comment or statement from the organization, but as of the publication time, no response has been received. Any response received will be included in this article.
