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FINDINGS OF FACT
Introduction
Some of the facts have been stipulated and are so found.
The stipulation of facts, with accompanying exhibits, is
incorporated herein by this reference. At the time of the filing
of the petitions in these cases, the principal places of business
of all petitioners were in Ohio.
The Commonly Owned Group
Petitioners are members of a commonly owned group of
14 corporations (the group). Except for one member of the group,
BKK Management, Inc. (BKK), each member of the group either owns
and operates one or more Taco Bell restaurants or owns the real
estate on which another member of the group operates a Taco Bell
restaurant. BKK provides management and administrative support
services to the other 13 members of the group. During the years
at issue, each member of the group was owned in equal shares by
George L. Kentris (G. Kentris), Michael N. Kentris (M. Kentris),
and Kenneth J. Baerwaldt (Baerwaldt), either individually or
together with their spouses. Messrs. G. Kentris, M. Kentris, and
Baerwaldt were also the directors and managing officers of each
member of the group (collectively, the owner-managers).
BKK Management, Inc.
BKK was established as a “cost company”, to provide
management and administrative support services to the other
members of the group (the purchasing members) at cost. Among the
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