In 1962, Martino (P) entered into a franchise and lease agreement with McDonald's (D), which provided that neither P nor a member of his immediate family would acquire a financial interest in a competing self-service food business without the written consent of D. In 1968, P's son purchased a Burger Chef franchise in Pittsburg, Kansas. P financed the transaction. D sued for breach of contract, and P and D settled that dispute by entering into a consent agreement, which provided for the sale of P's franchise back to D. In 1975, P brought this action, alleging that the enforcement of the restriction on acquisition in the franchise and lease agreements violated Section 1 of the Sherman Act. The district court held that both res judicata and the compulsory counterclaim rule of the Federal Rules of Civil Procedure barred P from suing for antitrust violations. P appealed.

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