Martino v. McDonald’s System, Inc.

Martino (plaintiff) held a McDonald's franchise under an agreement barring him and his immediate family from acquiring an interest in a competing self-service food business without McDonald's written consent. Years later, Martino financed his son's purchase of a competing Burger Chef franchise. McDonald's and its financing affiliate sued Martino in Iowa for violating the restriction, and that suit ended in a consent judgment with court-approved findings of fact and conclusions of law. Martino later filed this separate action, claiming the restriction itself violated the Sherman Act and seeking the profits he would have earned as franchise owner. McDonald's argued the new claim was barred both as a compulsory counterclaim that should have been raised in the first suit and by res judicata.