Klement’s sued by Milwaukee World Festival Inc.

Summerfest producer says sausage manufacturer hasn't made 2022 payment under sponsorship agreement

Klement's Sausage & Beer Garden at the Summerfest grounds.

Last updated on December 16th, 2022 at 01:41 pm

Milwaukee World Festival Inc., the parent company that produces Summerfest each year, has filed a lawsuit against Milwaukee-based Klement’s Sausage Company Inc. in response to an alleged breach of a sponsorship agreement.

According to the lawsuit filed Monday, Klement’s entered into a multi-year sponsorship agreement with MWF for a stage at the Summerfest grounds on April 2, 2018. The agreement runs through 2027. In exchange for the stage sponsorship, the complaint states Klement’s received other benefits including being named the official sausage of Summerfest and a variety of “on site signage and activations.”

In exchange for the promises mentioned in the sponsorship agreement, MWF was supposed to receive annual sponsorship fees from Klement’s. Each annual sponsorship fee was set to be paid in two installments. The total dollar amount for all the annual sponsorship fees, not including 2020 when Summerfest was canceled due to the pandemic, is $1.3 million.

The complaint states Klement’s failed to pay the 2022 sponsorship fee, which is a total of $140,473. The total amount of sponsorship fees still owed to MWF through 2027 is $1,025,000. MWF is seeking to recover the remaining sponsorship fees owed.

“Defendants, through their actions in failing to pay the 2022 sponsorship fee and communications with MWF, have clearly communicated their intent to no longer perform under the agreement moving forward,” reads the complaint.

The complaint further explains that because of this “breach of agreement,” MWF is left without a sponsor for 2023 and beyond for the area of the Summerfest grounds where the Klement’s Sausage and Beer Garden currently resides. MWF will seek to remodel this section of the Summerfest grounds prior to the start of the 2023 festival season and is also seeking $885,000 as reimbursement for the cost of this project.

Klement’s did not immediately respond to a request for comment Tuesday.

Ashley covers startups, technology and manufacturing for BizTimes. She was previously the managing editor of the News Graphic and Washington County Daily News. In past reporting roles, covering education at The Waukesha Freeman, she received several WNA awards. She is a UWM graduate. In her free time, Ashley enjoys watching independent films, tackling a new recipe in the kitchen and reading a good book.

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