- 13 - owner-managers' service hours) is reasonable, they have not directed any of their argument to proving that respondent's method produces an arbitrary, capricious, or unreasonable result, to wit, that gross sales is not indicative of management and administrative services provided. Petitioners do, however, make a collateral argument assaulting respondent's method, alleging that Ms. Camper did not take into account certain unusual events that occurred during the years at issue, which required BKK to provide unusual types and amounts of services to the affected purchasing members.3 Ms. Camper testified that she considered allocation methodologies based on both hours and gross sales. Although she admitted that the "top" method would have been based on hours or time spent, she was limited by the information available to her. The owner-manager’s failure to maintain time logs or other documentation recording the allocation of their time spent among the purchasing members, along with their failure to separately account for the time spent by support staff (whose activities gave rise to 15 percent of payroll-related costs), made it impossible for her to determine the impact of the unusual events on the services provided using an hour-based allocation 3 The unusual events include: (1) A fire at one of Kenco's restaurants that burned the restaurant to the ground on Dec. 7, 1989, and the subsequent construction of a new, larger restaurant, (2) the owners razed Tiffin Realty's only restaurant and rebuilt a new facility in 1990, (3) the owners remodeled Bowling Green's only restaurant and expanded the dining room of K-K's restaurant located on Trenton Ave. in 1991, and (4) Bryan was incorporated on June 3, 1992, and Bryan's restaurant opened in Oct. 1992.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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