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programs, which consisted of a basic 4-week class plus a 2-week
supplemental class for international franchisees.7
In addition, when franchisees opened their initial Mister
Donut shops, petitioner provided them with the assistance of two
Mister Donut employees for a 3-week period to work with the
shop's manager and to assist in the training of the bakers and
sales personnel. Petitioner also provided its franchisees with
manuals, which covered all aspects of managing and operating a
Mister Donut franchise, such as operating and production
procedures, baked goods, training, equipment, advertising, repair
and maintenance, sanitation, and special programs. The franchise
agreements contained strict confidentiality provisions and
provided that the Mister Donut manuals remained the property of
petitioner and were to be returned to it upon termination of the
franchise agreement.
In order to ensure that the distinguishing characteristics
of the Mister Donut System were uniformly maintained, petitioner
established standards for furnishings, equipment, finished
product mixes, and supplies,8 which the franchisees were required
7International franchisees could send additional employees
for training each year.
8Petitioner had entered into supplier agreements with
manufacturers outside the United States, licensing them to
produce bakery mixes, fillings, and other products to its
specifications for sale to Mister Donut franchisees and
subfranchisees. These agreements obligated suppliers to meet
petitioner's quality standards, prohibited suppliers from selling
(continued...)
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Last modified: May 25, 2011