<PAGE>
                                                                   Exhibit 10.12

                             EMPLOYMENT AGREEMENT
                                        


          THIS AGREEMENT (the "Agreement"), made this first day of October, 1997
by and between MARKET FACTS, INC., a Delaware corporation (hereinafter "MFI"),
with its principal place of business at 3040 West Salt Creek Lane, Arlington
Heights, Illinois, 60005 and Sanford M. Schwartz (hereinafter "Executive"), an
individual residing in Scarsdale, New York.

                             W I T N E S S E T H:
                             - - - - - - - - - - 
                                        
          WHEREAS, Executive is currently employed as the Executive Vice
President, Market Facts, Inc. and President, Market Facts-New York, Inc. of MFI
and MFI desires to continue to employ Executive on terms which will encourage
the attention and dedication of Executive to MFI as one of its key employees;
and

          WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and

          WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.

          NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:

          1.   Employment. MFI employs Executive as its Executive Vice
President, Market Facts, Inc. and President, Market Facts-New York, Inc., and
Executive accepts such employment and agrees to continue to serve MFI, in each
case upon and subject to the terms and conditions set forth herein, which terms
and conditions shall supersede any other oral or written employment agreement(s)
entered into by and between MFI and Executive prior to the date of this
Agreement.

          2.   Term. MFI agrees to employ Executive as provided in Section 1
hereof for a term of employment (the "Term of Employment") commencing on such
date (the "Effective Date") as this Agreement shall be ratified and approved by
the Board of Directors of MFI (the "Board of Directors") in accordance with
Section 22 hereof and continuing thereafter until terminated in accordance with
the provisions of Section 7 hereof.

          3.   Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.

          Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Scarsdale, New York area or be absent from Scarsdale, New
York for such extended periods as to make his/her continued residence in
Scarsdale, New York not practicable.

          4.   Compensation. MFI agrees to pay Executive a base salary of
$212,836.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.

                                       1
<PAGE>
 
          Based upon MFI's performance and Executive's individual performance
and at the sole discretion of the Board of Directors, Executive shall be
eligible for an annual bonus consistent with the provisions and goals set by the
Board of Directors for each bonus year, and shall be entitled to participate in
other stock and bonus compensation programs of MFI, in each case on a basis no
less favorable to Executive than that available to other officers of MFI with
similar responsibilities and duties.

          5.   Expenses. MFI shall reimburse Executive for his/her business 
expenses (including expenditures for travel, meals, hotel accommodations, and
the like) incurred in the course of his/her employment hereunder, provided that
Executive submits the documentation necessary for deduction of the payments by
MFI on its income tax returns. In the event that any of Executive's expenses so
reimbursed pursuant to this Agreement are disallowed as a business expense by
the tax authorities due to lack of supporting evidence Executive shall be
responsible to MFI for any tax consequences incurred by MFI as a result thereof.

          6.   Executive Benefits. Executive shall be entitled to participate 
in MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.

          Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex 
Plan") as currently in effect, employees of MFI are entitled to select (and pay
the premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).

          7.   Termination.
               ----------- 

               (a)  Basis. Executive's employment may be terminated hereunder 
by MFI or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:

          (i)  MFI, Without Cause. MFI may terminate Executive's employment
          hereunder at any time by written notice to Executive.

          (ii)  Executive, Without Cause. Executive may terminate his/her
          employment hereunder at any time by giving MFI not less than sixty
          (60) days prior written notice.

          (iii)  Death. Executive's employment hereunder shall terminate upon
          his/her death.

          (iv)  Disability. MFI may terminate the Executive's employment
          hereunder at any time in the event of Executive's disability.
          "Disability" is defined to mean Executive's inability to substantially
          perform his/her normal duties for sixteen (16) weeks (not necessarily
          continuous or calendar weeks) during any twelve (12) successive
          months; and in the event of a dispute as to Executive's inability to
          perform his/her duties, MFI may refer the same to a licensed
          practicing physician of MFI's choice, and Executive agrees to submit
          to such tests and examination as such physician shall deem
          appropriate.

          (v)  For Cause. MFI may terminate Executive's employment hereunder at
          any time for Cause. "Cause" shall mean (a) an act of proven fraud or
          dishonesty on the part of Executive, or (b) a willful and material
          breach of this Agreement by the Executive, which breach has not been
          cured and remedied by Executive within sixty (60) days after written
          notice from the Board of Directors to Executive describing such breach
          in reasonable detail.

                                       2
<PAGE>
 
          (vi) By Mutual Agreement. This Agreement may be terminated at any time
          by the mutual agreement of the parties. Any such termination shall be
          memorialized by an agreement which is reduced to writing and signed by
          Executive and a duly appointed officer of MFI.

               (b)  Notice of Termination. Any termination of Executive's 
employment by MFI or by Executive (other than pursuant to Section 7(a)(iii)
above) shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment if such
termination is pursuant to clauses (iv) or (v) of Section 7(a).

               (c)  Date of Termination. For purposes of this Agreement, "Date 
of Termination" shall mean the date specified in the Notice of Termination as
the last day of employment of Executive or, if no such date is specified, (i) on
the sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.

          8.   Rights Upon Termination.
               ----------------------- 

               (a)  If Executive's employment is terminated other than pursuant 
to Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:

          (i)  if Executive's employment is terminated pursuant to the
          provisions of Section 7(a)(i) hereof, the one (1) year anniversary 
          date of the date of the Notice of Termination;

          (ii)  if Executive's employment is terminated pursuant to the
          provisions of Section 7(a)(ii) hereof, the date specified in the
          Notice of Termination or if no such termination date is specified, the
          60th day after the date of the Notice of Termination (or such earlier
          applicable date as may be provided herein);

          (iii)  if Executive's employment is terminated pursuant to the
          provisions of Section 7(a)(iv) by reason of Executive's Disability,
          then until the first anniversary of the Date of Termination, Executive
          shall be entitled to receive such portion of Base Salary as would have
          been paid to Executive pursuant to MFI's disability programs then in
          effect, if such Notice of Termination had not been given by MFI; and

          (iv)  if Executive's employment is terminated pursuant to the
          provisions of Section 7(a)(vi), the termination date mutually agreed
          by MFI and Executive. 

               (b)  If Executive's employment is terminated by his/her death, 
or if Executive's death shall occur prior to his/her receipt of the payments
provided for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.

          9.  Executive's Ability to Contract for Company. To the extent 
Executive is so authorized by MFI's Board of Directors or By-Laws, and until
such time as a Notice of Termination is given pursuant to Section 7(b) hereof,
Executive shall have the right to make any contracts or commitments for or on
behalf of MFI, to sign or endorse any commercial paper, contracts,
advertisements, or instrument of any nature, and to enter into any obligation
binding MFI to the payment of money or otherwise.

          10.  Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:

               (a)  solicit or otherwise attempt to induce any clients of MFI 
on whose account Executive has worked during the two (2) years prior to the
termination of Executive's employment to terminate their relationship with MFI
or otherwise divert from MFI and/or its affiliates any trade or business

                                       3
<PAGE>
 
being conducted by such customers with MFI or otherwise provide any services
similar to the services provided by MFI to such customers; or

               (b)  recruit, solicit or otherwise induce or influence any 
employee or agent of MFI to terminate their employment or agency relationship
with MFI, or employ, seek to employ, or cause any other business competitive to
MFI to employ or seek to employ any person who is then (or was at any time
within the six months prior thereto) employed by MFI.

          11.  Confidential Information. Executive recognizes that as a key 
member of the management of MFI, Executive has and will continue to occupy a
position of trust with respect to such business information of a secret or
confidential nature which is the property of MFI or any of its subsidiaries or
affiliates and which has been or will be used by or imparted to Executive from
time to time in the course of Executive's duties. Executive therefore agrees
that:

               (a)  Executive shall not at any time during the term of this 
Agreement or thereafter, except in the performance of his/her duties hereunder,
use or disclose directly or indirectly to any third person any such information.

               (b)  Executive shall return promptly on the termination of 
Executive's employment for whatever reason (or in the event of Executive's
death, Executive's personal representative shall return) to MFI at its direction
and expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.

               (c)  The term "information of a secret or confidential nature" 
means information of any nature and in any form which at the time or times
concerned is not generally known to those persons engaged in businesses similar
to those conducted or contemplated by MFI which relates to any one or more of
the aspects of MFI's business, including, but not limited to, tests, test
procedures, test programs and systems, patents and patent applications;
copyrights or copyright applications, inventions and improvements, whether
patentable or not; writings whether copyrightable or not; development projects;
machines; machine designs and the materials for machines; policies, processes,
formulas, techniques, know-how, data, data bases, computer designs, computer
programs whether embodied in source or object code, computer languages or
formats and other facts relating to design, construction, development
utilization, manufacturing or servicing of machines or programs or relating to
materials for machines or programs; to plant layout or to plant operations;
policies, processes, formulas, techniques, know-how and other facts relating to
sales, marketing advertising, promotions, financial matters, customers, customer
lists, customers' purchases, or requirements, and other trade secrets, both
tangible and intangible, in writing and orally imparted.

          12.  Intellectual Property Rights.
               ---------------------------- 

               (a)  MFI shall have all rights including international priority 
rights in: all tests, procedures, inventions, developments and discoveries,
whether or not patentable, and all suggestions, proposals, computer programs and
writings, including any copyright interests therein, which Executive authors,
conceives or makes, either solely or jointly with others during his/her
employment with MFI which: (i) relate to any subject matter with which
Executive's work for MFI may be concerned; (ii) relate to the business products
or services or actual or demonstrably anticipated research or development
projects of MFI; (iii) involve the use of the time, equipment, materials or
facilities of MFI; or (iv) relate or are applicable to any phase of MFI's
business. Further, Executive agrees to execute all documents and to take all
actions as may be necessary in order to assign all rights to or otherwise vest
good title to MFI in the property and proprietary rights described in this
subparagraph (a).

               (b)  MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.

                                       4

<PAGE>

          In addition to the foregoing, MFI shall have no rights in any 
inventions made or conceived by Executive which do not involve any equipment,
supplies, facilities or materials of MFI and which are developed entirely on
Executive's own time unless: (i) the invention relates to the business, products
or services of MFI; (ii) the invention relates to actual or demonstrably
anticipated research or development projects of MFI, or (iii) the invention
results from any services performed by Executive for MFI.

               (c)  Executive will disclose promptly in writing to MFI all 
ideas, inventions, improvements, discoveries and writings, whether or not
patentable or copyrightable, made or conceived by him/her either solely or in
collaboration with others during his/her employment with MFI, whether or not
during regular working hours, and, if based on confidential information as
defined in Paragraph 11(c) hereof, within one (1) year thereafter, if such
inventions or writings relate to either: (i) the subject of Executive's work for
MFI; (ii) products, projects, programs or business of MFI of which Executive had
knowledge in the course of Executive's work or otherwise; or (iii) any business
of MFI during Executive's employment.

               (d)  Executive shall maintain for disclosure to MFI complete 
written records of all such inventions and writings. Such records shall bear
dates and signatures and show (i) the full nature thereof, and (ii) the critical
dates pertaining to conception, development, reduction to practice, and
embodiment in a tangible form. Such records shall be the sole property of and be
readily available to MFI.

               (e)  Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.

          13.  Remedy. Executive understands that MFI would not have any 
adequate remedy at law for the material breach or threatened breach by Executive
of any one or more of the covenants set forth in this Agreement and agrees that
in the event of any such material breach or threatened breach, MFI shall be
entitled to preliminary and permanent injunctive relief without bond in any
court of competent jurisdiction, which rights shall be cumulative and in
addition to any other rights or remedies to which MFI may be entitled.

          14.  Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.

          15.  Counterparts. This Agreement may be executed in counterparts, 
each of which shall be deemed an original.

          16.  Assignment. This Agreement shall not be assignable by either 
party without the express written consent of the other party hereto.

          17.  Amendment and Modification. No amendment or modification of the 
terms of this Agreement shall be binding upon either party unless reduced to
writing and signed by Executive and a duly appointed officer of MFI.

          18.  Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:

                    Sanford M. Schwartz
                    Market Facts, Inc.
                    3040 West Salt Creek Lane
                    Arlington Heights, Illinois 60005

          Either addressee may change its (his/her) address upon prior written
notice.

                                       5
 
<PAGE>
 
          19.  Repayment of Compensation. In the event that either (a) all or 
any portion of the amounts payable and benefits provided to the Executive under
this Agreement from and after the date hereof are disallowed by the Internal
Revenue Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.

          20.  Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.

          21.  Severability. The provisions of this Agreement shall be 
severable. The unenforceability or invalidity of any one or more provisions,
clauses, or sentences hereof shall not render any other provision, clause or
sentence herein contained unenforceable or invalid. The portion of the Agreement
which is not invalid or unenforceable shall be considered enforceable and
binding on the parties and the invalid or unenforceable provision(s), clauses(s)
or sentence(s) shall be deemed excised, modified or restricted to the extent
necessary to render the same valid and enforceable, and this Agreement shall be
construed as if such invalid or unenforceable provision(s), clause(s), or
sentence(s) were omitted.

          22.  Effective Date. This Agreement shall become effective only upon 
and subject to the approval of the Board of Directors of MFI.

          23.  Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.



                                   Sanford M. Schwartz
                                   -------------------
                                   Executive



                                   MARKET FACTS, INC.


                                   By:  Thomas H. Payne
                                        ---------------

                                       6