The future of the Tony Luke's sandwich empire could be at stake as a family feud has ended up in court.
The fight is over money and control of the Tony Luke's name, now seen on Oregon Avenue beside I-95 in South Philadelphia and in about two dozen franchise locations.
Though the parties in two lawsuits filed over the last week are corporate identities, the emotions are personal, as it pits a father and one son against another son.
"My heart is broken," said Tony Lucidonio Jr., the bald, goateed longtime frontman of the sandwich brand. "I would never do anything to hurt my family. … [This is] painting me out to be this evil, greedy son, to destroy my father and my brother. That is not true."
The drama began last summer when Tony Luke Sr. fired Tony Jr. from the flagship eatery that the senior Tony Luke opened in 1992 as a South Philadelphia truck stop. The father and younger son Nicky also own the store in Wildwood, N.J.
In 2007, Tony Luke Jr. came to his father and brother with an idea for franchising.
Speaking today on his father's behalf, Nicky Lucidonio said his father was tired of paying Tony Jr. a salary, which court papers pegged at $145,000 a year. When the idea of franchising came up, "my brother told my father: 'Until we get started, can you help me out to get on my feet?' " Nicky Lucidonio said.
Meanwhile, Tony Luke Sr. and Nicky had not received franchise and royalty fees, which were supposed to be 15 percent. They calculated it at $3 million.
"My father said, 'I'm not seeing anything. I'm done,'" Nicky Lucidonio said.
"My father gave his name for nothing."
Then came "lawsuit after lawsuit," Nicky Lucidonio said.
Father and son reviewed franchise contracts they had signed, and were surprised. "Everything was for them," Nicky Lucidonio said.
In a complaint filed by Tony Luke Inc. on Feb. 29 in New Jersey Superior Court in Gloucester County, a lawyer representing the interests of Tony Sr. and Nicholas allege that they signed the agreement and a follow-up agreement but had not read them "because they reasonably believed that Tony Jr. had had the agreement prepared to document their understanding."
The agreement gave control of the Tony Luke trademark, recipes, and what is known as trade dress to a company controlled by Tony Jr., according to court papers filed by Steven E. Angstreich, of Weir & Partners.
The defendant in the New Jersey suit is TL Worldwide Phillyfood, a company that Luke Jr. created with Raymond A. Rastelli Jr. of Rastelli Foods, a multinational company that does extensive business in the Middle East – hence the two Tony Luke's shops in Bahrain.
According to a suit filed against Tony Luke Inc. in U.S. District Court in Camden on March 2, Rastelli invested millions into the company, promoting the Tony Luke brand and setting up the franchise plan.
The payment of royalty and franchise fees, by agreement, was tied to net profits, said Paul R. Rosen, of Spector, Gadon & Rosen, who represents TL Worldwide, in an interview. He added that there have been no net profits, so no money is due.
The flagship location benefited greatly from Tony Jr.'s work – its business growing in lockstep with the franchising and worldwide publicity, according to Rosen.
Also under terms of the agreement, the father and son's business prepared the broccoli rabe, spinach, mushrooms, fried peppers, hot peppers, red gravy and pork juice for sale to the franchisees. The franchisees were also permitted to purchase the blend of seasonings and spices from a company that the father had an exclusive agreement with.
Last year, around the time of Tony Jr.'s ouster, Tony Sr. and Nicholas stopped preparing the food, the Tony Luke's Inc. suit says.
Rastelli now prepares it.
Tony Luke Inc.'s suit says that when Tony Sr. learned of complaints from franchisees over the quality, he began moves to rebrand the South Philadelphia shop and dissociate the eatery from the Tony Luke's name.
Rosen's suit contends that the father and son produced a magazine advertisement with Tony Lucidonio Sr.'s photo and calling him Papa Luke.
Worldwide alleged that changing the name would breach their contract – which also would forbid any new Luke-owned eatery from serving the cheesesteaks, roast beef, and pork sandwiches that are now sold.
Angstreich, Tony Luke's Inc.'s attorney, wrote in his complaint that the father and son could do what they want because Worldwide had already breached its side of the agreement.
"Just leave Front Street alone," Nicky Lucidonio said in an interview. "They want to turn us into a franchise and that's not going to happen."
Rosen called it sour grapes. "Bottom line is his son [Tony Jr.] and his franchise partner have made his father a millionaire, but they not yet received the same financial benefits," Rosen said. "His tax returns show millions in sales growth from 2007 through 2014."