Hooters of America will pay $900,000 to settle a lawsuit that accused the chain of failing to pay sponsorship fees to a NASCAR team.
The suit, filed in July in North Carolina by Hendrick Motorsports, said that the restaurant company stopped paying its 2024 dues last March, racking up an overdue bill of $1.75 million for the year.
Hooters had been a sponsor of Hendrick driver Chase Elliott since 2017, with the chain’s name and logo appearing on Elliott’s No. 9 car during races in the NASCAR Cup Series.
Hendrick dropped Hooters as a sponsor in July over the payment issue, saying that the two sides had not been able to come to a “workable solution.” It filed the lawsuit later that month, and a judge approved the settlement agreement last week, according to court filings.
The casual-dining chain known for chicken wings and scantily clad waitresses has a long history with NASCAR, having sponsored a number of different drivers starting in the early 1990s.
The settlement comes as the Atlanta-based company is reportedly considering a Chapter 11 bankruptcy filing following years of sales declines and restaurant closures. From 2018 to 2023, U.S. systemwide sales at the chain declined nearly 15%, and its domestic footprint shrunk by 12%, according to Technomic data.
Its failure to fulfill its NASCAR obligations points to deeper financial problems at Hooters. In September, credit rating agency KBRA downgraded securities issued by Hooters, citing revenue declines at its restaurants. And last year, the company took about 4 times longer to pay its vendors than the average restaurant chain, according to data from credit report company Creditsafe.
Hooters of America operates or franchises nearly 300 restaurants worldwide.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.