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unit or products served. In order
to assure that Licensee operates in
strict accordance with such stan-
dards, Licensee shall purchase the
goods listed on Schedule 2(a)(ii)
attached directly from Licensor or
from such sources as Licensor may
designate in writing from time to
time; * * *
* * * * * * *
3. Licensor’s Obligations.
Licensor agrees to provide at its own
expense:
(a) an on-site manager to train Li-
censee and/or its employees and staff on food produc-
tion, customer service, staffing and training; and
(b) all materials and information
needed by Licensee to open and maintain the Business
using the Trademarks and Licensed Rights, other than
inventory to be used or consumed by Licensee in the
operation of the Business.
During the year at issue, Mr. Ciarrocchi performed a variety
of services for petitioner, including: (1) Designing the layout
of petitioner’s bar/restaurant, (2) developing the food products
to be served at petitioner’s bar/restaurant, (3) hiring all the
employees of petitioner’s bar/restaurant, and (4) ordering all
the supplies for petitioner’s bar/restaurant.
During the last six months of the year at issue, petitioner
paid Mr. Ciarrocchi a so-called royalty fee of $902,476 under
petitioner’s license agreement (payment under petitioner’s
license agreement). During the year at issue, petitioner also
paid Mr. Ciarrocchi a salary of $18,000 and a management fee of
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Last modified: May 25, 2011