Susser v. Carvel Corp.

PETITIONER: Susser
RESPONDENT: Carvel Corp.
LOCATION: United States Post Office and Courthouse

DOCKET NO.: 355
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 381 US 125 (1965)
ARGUED: Apr 29, 1965
DECIDED: May 03, 1965

Facts of the case

Question

Media for Susser v. Carvel Corp.

Audio Transcription for Oral Argument - April 29, 1965 in Susser v. Carvel Corp.

Earl Warren:

Number 355, Bernard Susser et al., Petitioners, versus Carvel Corporation et al.

Mr. Fleischmann.

Arnold Fleischmann:

Mr. Chief Justice, Associate Justice of the Supreme Court, may it please the Court.

This is a case of a tying arrangement within the context of a franchise system.

Carvel, the respondents are the franchise source of a chain of soft ice cream stores, roadside stores, stores which serve the general public.

They have licensed approximately 400 such stores, approximately 250 of which are located in the area about which we're primarily concerned.

These stores are of interest to the independent businessman, the independent businessman who wants to be his own boss, who wants to be on his own.

When Carvel went into the franchising business, is -- it undertook a very strong campaign to publicize the values and qualities of its franchise.

These values were constantly repeated in daily newspapers.

They appeared in television and we have a very brief outline of them on page 7 of our reply brief -- oh, page 6 on the reply brief.

These items are the ones which we consider to be the essential ones to the value of the franchise.

They are -- and this is what the independent businessman who wants to become a Carvel franchisee since they are the expert guidance which the franchisor can furnish.

They are the good location and they are the recipes and the techniques that make for success.

As a matter of fact, Carvel has very well publicized that and -- one of the exhibits introduced in this case by Carvel specifically refers to it.

It is on page 427 in the lower left-hand corner, where Carvel describes the merits of its soft ice cream chain.

It's a very small print.

Now, this is the value of this chain, the businessman has the amicus curiae put it -- get a running start if he becomes a part of a franchise organization.

This is what these individuals who were looking forward to becoming successful businessmen sought when they became franchise operators.

Now, unlike some of the franchises which are occurring in this country, Carvel has envisioned the right to operate the soft ice cream stores which it wants to franchise to the individual operators.

And the expert guidance which the applicant for a franchise seeks, not only on the payment of a royalty which is the usual and customary way but also on an agreement to purchase almost all of its commissary goods and supplies and equipment which the dealer needs in this everyday operation of his business.

Thus, the applicant has no choice if he wants a Carvel franchise.

He must buy frantically all of his commissary goods from Carvel.

Now, if we look at this problem in a broad sense, we see that there is a tying arrangement between the item which is desirable, unique and attractive to the applicant, the things that make for business success.

And which are perhaps accompanied by certain things like the Carvel name and reputation, by Carvel's way of doing business and even perhaps by the appearance of the Carvel stores in the way they have uniqueness in their qualities.

Now, these are the items which draw the franchiser -- franchisee to Carvel.

And this is the element.

This is the focus of the tying arrangement.

This interpretation of the tying arrangement does not differ very substantially from the position taken by Chief Justice Lumbard in the Second Circuit.

It is almost the same.

But, I think the emphasis is placed somewhat differently.