MILWAUKEE — Milwaukee World Festival (MWF), Summerfest's parent company, is suing Klement's Sausage Company, Inc. over an unpaid sponsorship.
The lawsuit, filed by attorneys representing MWF, centers around a sponsorship agreement signed in 2018 that runs through 2027. The festival claims Klement's and its parent company, Tall Tree Foods Holding, Inc., indicated they wanted to terminate the agreement and then failed to pay their fee for this year.
Summerfest is asking for more than $1 million, plus the cost of removing or remodeling the Klement's stage.
The lawsuit says due to a breach of the agreement, MWF does not have a sponsor for 2023 and beyond for the area of the park currently occupied by the Klement's Sausage and Beer Garden.
TMJ4 News has reached out to Klement's for a comment but has not heard back.
The details: The 'official Sausage of Summerfest'
In April 2018, MWF and Klement's entered into a multi-year sponsorship agreement for a stage at Summerfest, as well as a sponsorship to support to design and construction of a new "Klement's Sausage and Beer Garden" stage area, according to the lawsuit.
As of the filing of the lawsuit, MWF claims there has been no payment of the 2022 Sponsorship Fee or reimbursement. The total amount of Sponsorship Fees owed to MWF under the agreement for 2022 through 2027 is $1,025,000.
The Stage Sponsorship initially ran from the 2018 festival season through the 2027 festival season but was amended after Summerfest 2020 was canceled due to the COVID-19 pandemic. The lawsuit says in exchange for the annual Stage Sponsorship, Klement's was named the "official Sausage of Summerfest", received annual tickets, passes, and parking for Summerfest, a variety of annual on-site signage and activations, and other exposures and benefits.
In exchange for these promises, MWF was supposed to receive annual sponsorship fees from Klement's which was to be paid in two installments. The total value of all the annual Sponsorship Fees, not including 2020, is $1.3 million, according to the lawsuit. Klement's has also historically paid MWF an additional annual fee to cover promotional free sausage coupons that were handed out during Summerfest.
The lawsuit alleges Klement's failed to request MWF's advance permission to hand out the free coupons but did so at Summerfest anyways. Therefore, MWF invoiced $473 for the reimbursement. The Capitol Sponsorship Contribution totaled $755,000 and was paid entirely to MWF to construct the Klement's Sausage and Beer Garden. MWF finished construction in 2018.
To date, the lawsuit says Klement's and Tall Tree have paid at least $1,035,010 to MWF between the Stage Sponsorship and Capital Sponsorship Contribution. Klement's and Tall Tree agreed to move forward with the 2022 Stage Sponsorship in May, roughly one month before Summerfest. The lawsuit says the parties failed to come to an agreement to terminate the agreement for 2023 through 2027. The 2022 fee was payable in two $70,000 payments due on May 1 and June 1 of this year, which the lawsuit claims was never paid. The lawsuit also alleges throughout the course of the agreements, Klement's and Tall Tree "consistently failed to pay invoices in a timely fashion" but through 2021 "had operated in good faith" and would eventually pay.
