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also was intended to cover the cost of royalties from HIC to
Hyatt Domestic.
Mirroring their argument with respect to respondent’s
royalty determination between HIC and Hyatt Domestic, petitioners
argue that these intangibles have no value, or that it was the
subsidiaries (HHK and HS) that created the value. In this
setting, however, petitioners also rely on Your Host, Inc. v.
Commissioner, 58 T.C. 10, 27-28 (1972), affd. on other issues 489
F.2d 957 (2d Cir. 1973), for the proposition that, even in a
chain operation, a trade name may have little value.
Your Host, Inc. v. Commissioner, supra, involved 11
restaurant corporations with common ownership and senior
management that operated a total of 40 restaurants with the name
of Your Host Restaurant. All but three of the restaurants were
located in the Buffalo, New York, area, with the remainder in
Rochester, New York. Two of the three Rochester restaurants
closed after 6 years. All of the restaurants were similar in
appearance, served identical menus at the same prices, and were
open 24 hours a day. They advertised as being part of a chain
under the same management. For economy of scale, a master policy
for liability insurance and workmen’s compensation was obtained
for all the corporations. The premium for the coverage was
advanced by Your Host corporation and was reimbursed by the other
corporations in apportioned amounts based on each corporation’s
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