Editor's note: This story has been updated with Hooters' comments on the lawsuit.
Twin Peaks chief executive Randy DeWitt called a lawsuit filed by Hooters of America LLC against Twin Peaks franchisee La Cima Restaurants “frivolous” and “baseless.”
The suit, which was filed in U.S. District Court in the Northern District of Georgia on Sept. 28, alleges that Joe Hummel — a former Hooters executive and La Cima’s current chief operating officer — stole trade secrets that would help his new company expand its system and compete with Hooters.
On Monday evening, Twin Peaks’ DeWitt responded to the charges, saying, “No one ever offered Twin Peaks any of Hooters trade secrets, and it’s ludicrous we would ever want them anyway. To think we would benefit from using their trade secrets seems preposterous to me.”
He went on to say that Twin Peaks developed its own “unique brand strategy, with systems and procedures that are unique to Twin Peaks. All of our franchisees, including La Cima, are required to use our systems and not use the strategy and systems from their previous company.”
According to the Hooters’ suit, Hummel “gained unauthorized access to [Hooters’] computer systems, misappropriated [Hooters’] trade secrets and confidential business information, and shared such information with La Cima.”
Hooters of America is the Atlanta-based parent company of the Hooters casual-dining chain, which has more than 435 units. Atlanta-based La Cima, established as a limited-liability company in June, plans to open 35 new Twin Peaks units in the Southeastern United States and is expected to compete directly with Hooters.
Both brands feature provocatively dressed waitresses and offer casual-dining-style menus that include sandwiches, chicken wings and salads.
Twin Peaks is based in Addison, Texas, and operates 15 units in Texas, Oklahoma, Kansas, New Mexico and Nebraska. Twin Peaks itself is not party to the lawsuit.
A phone call for comment was placed to what court documents list as La Cima’s place of business, but was not returned by press time.
Mike McNeil, Hooters' vice president of marketing and chief marketing officer, said: “For 28 years, Hooters has been one of the real success stories in the restaurant industry. The brand has become internationally recognized and an icon of popular culture. Based on our success, we certainly expect to have competition, and understand that imitation is inevitable and to an extent flattering. However, we feel that competitors need to follow the rules, and we intend to do our part through this legal action to provide our franchisee partners and employees with a fair and level playing field on which to compete."
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Hummel worked at Hooters from December 2003 to July 2011, when he resigned from his position as executive vice president of operations and purchasing. He joined La Cima as a partner and chief operating officer soon afterwards.
“Motivated by a desire to benefit his new business venture at La Cima, Hummel has misappropriated a great volume of confidential and proprietary business information belonging to [Hooters],” court documents allege. “Hummel was uniquely well-positioned to misappropriate such valuable and sensitive information from [Hooters].”
Several other Hooters executives recently departed the company to join La Cima. They include former Hooters chief executive Coby Brooks, former vice president and general counsel Clay Mingus, former vice president of company store operations Roger Gondek, and former vice president and controller James Tessmer.
The lawsuit claims that “Hummel and his former executive colleagues coordinated the timing of their departures from [Hooters], and have formed La Cima to exploit their knowledge of [Hooters’] trade secrets and confidential business information, and thereby compete unfairly against [Hooters].”
DeWitt refuted those claims.
“We found Joe Hummel and the entire La Cima team to be highly ethical, experienced and capable restaurant executives,” he said. “We wanted them as franchisees for those reasons. It made no difference to us what brand they were associated with previously.”
“The bottom line is that any significant competitive advantages La Cima enjoys will come from Twin Peaks, not from the company they left,” DeWitt said.