Carmen D. Caruso and his partners have
represented franchisors ranging from start-ups to the
world's largest franchisor, a company that has become
synonymous with franchising across the globe.Our experience includes significant litigation
as well as non-litigation matters.
Representing
Franchisors In Litigation
Mr. Caruso has represented franchisor in both
franchise disputes as well as disputes with third-party
suppliers that affected entire systems.Some highlights include:
Brookhurst v. McDonald’s Corp.Defense
of McDonald’s Corporation on charges of breach of
contract and fraud filed by a terminated supplier of
uniforms to the system; where the supplier alleged
that it had an oral agreement to serve to manage the
production and sales of uniforms by several uniform
suppliers, and claimed damages for “custom
programming” new computer software for the
management of uniform production and sales
Cummings v. McDonald’s Corp.Defense
of McDonald’s Corporation in parallel state and
federal cases, which included a RICO claim, arising
out of McDonald’s attempt to settle a large
verdict ($52 Million) that had been awarded to an
ice cream vendor in an earlier trial (the “Central
Ice Cream” case).(Another law firm had represented
McDonald’s in the case that resulted in the
adverse $52 Million verdict).
Fiore v. McDonald’s Corp.Victorious in representing McDonald’s
against claims for fraud, RICO violations, and
antitrust violations arising from the termination of
five franchised stores in New York on the basis of
quality, service and cleanliness (QSC) violations,
after first obtaining a transfer of the case from
Texas on the grounds of an inconvenient forum.
McDonald’s Corp. v. Rafco. Defense of McDonald’s Corporation against motion
for sanctions under Rule 11 of the Federal Rules of
Civil Procedure, where McDonald’s had filed a RICO
suit against a New Jersey construction firm with
reputed ties to organized crime, alleging that there
had been a scheme to defraud McDonald's with respect
to the remodeling of its rest rooms.
Thermodyne Corp. v. McDonald’s Corp..Defense of McDonald’s Corporation on
charges of theft of trade secrets filed by the owner
of certain oven technology.The plaintiff was seeking hundreds of
millions in damages, which it did not obtain.As part of the defense, we challenged the claimed trade
secrets as being in the public domain.The settlement terms of this case are
confidential.
Concept Development, Inc. v. Godfather’s
Pizza.Defense of franchisor against bad faith claims related
to unsuccessful rollout of deep-dish pizza product.
Ladies Workout Express Litigation.Defense of multiple lawsuits against
franchisor for alleged violations of the Illinois
Franchise Disclosure Act.
In Mr. Caruso’s partner at Schwartz Cooper
represented McDonald’s Corporation in the
termination of the franchisee in Paris, France in a
landmark decision from the early 1980’s (Dayan
v. McDonald’s Corp.) that remains widely
cited to this day.
NON-LITIGATION MATTERS
LITIGATION AVOIDANCE:Mr.
Caruso confidentially advises franchisors and
distributors whether their conduct was in violation of
applicable laws and to suggest appropriate changes to
the clients' practices, or its agreements, as needed.For example:
“TYING” ANALYSIS:Mr. Caruso and his partners reviewed the
business practices of a successful international
franchisor (that is not otherwise identified on this
site) in order to advise that client whether its
conduct was potentially in violation of the
provisions of the Sherman Antitrust Act that
prohibit the unreasonable "tying" of a
product sale to the initial franchise sale.
"HIDDEN FRANCHISE" ANALYSIS:Mr.
Caruso and his partners have counseled distributors
on compliance with state and federal franchise laws;
thus preventing costly litigation and costly
regulatory enforcement actions.
DISPUTE RESOLUTION:Mr. Caruso and his partners have counseled
franchisors on the successful resolution of
encroachment, standards compliance and product
supply disputes with individual franchisees, thus
avoiding litigation or arbitration that is not only
costly, but also destructive to good business.Our experience includes franchise terminations in which
litigation was avoided.
DEALING WITH INDEPENDENT ASSOCIATIONS:No franchisor is happy to learn that its
franchisees have formed an independent association,
but how the franchisor reacts to that development
may have critical implications for the long-term
health of the system.Mr. Caruso and his partners have experience
in advising franchisors in this situation.
DOCUMENT PREPARATION & FRANCHISE
LAW COMPLIANCE
Mr. Caruso and his partners at
Schwartz, Cooper has significant expertise in the
careful crafting of franchise documents.
Significantly, through
participation in the Fair Franchising Standards
Committee of the American Association of Franchisees
& Dealers, and in the drafting of the AAFD's model
franchise agreement, we keep our fingers on the pulse of
current issues in franchise agreement drafting, and we
bring our expertise on both sides of these agreements to
the table when we advise our franchisor clients at
Schwartz Cooper.We firmly believe that we have a superior perspective
in comparison to other firms that limit their practice
to franchisors only.
We offer competitive fees for the
preparation of all documents necessary for your
franchise or distribution system including offering
circulars, franchise agreements, multiple unit
development agreements, area representative agreements,
master franchise agreements and related franchise and
distribution agreements.
In addition, the Schwartz Cooper
attorneys have overseen and been actively involved in
thousands of state franchise and business opportunity
registrations and renewals.
RESTRUCTURING
We have counseled franchised and
non-franchised distributors on the restructuring of
their dealer programs.We have faced difficult consolidation,
remuneration and incentive issues.
