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franchise arrangement. Therefore, we hold that HIC’s income
should be increased by 1.5 percent of the gross revenues of those
hotels whose management fees were remitted to HHK and HS, taking
into consideration the adjustments already discussed.36 The 1.5-
percent rate consists of 1 percent for expenses and .5 percent
for profit based on a franchise model.
To reflect the foregoing and considering the parties’
stipulations of settled issues and the fact that additional
issues remain for resolution,
An appropriate order
will be issued.
36 This allocation should be offset by the overhead charges
already taken in 1983.
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