ent001424-193

Page three of these figures include any per diem time for any member of Regan?╟╓s organi- zation, nor legal fees or charges of that character, except those actually expended to the firm of Paul, Paul & Moore for fees in connection with pro- curing trade mark registration. This latter amount was not substantial. Accordingly, our total expenditures for royalties paid to the Foundation and advertising and other expenses, excluding those general charges referred to above, total the sum of $20,589.20. The foregoing is set forth for the purpose of requesting your con- sideration of the following proposal respecting the manner of calculating the distributive share of royalties paid to the Foundation, advertising fund and Regans. fe have used General Mills mix in the baking of Angelita Bread now for some months. The product appears to be as well received as we could probably expect and our organization is satisfied that the bread baked using this mix is a satisfactory product for the purpose of general markets served by wholesale bakeries. The matter of stale, advertising expense and other expenses of the franchise holder we suggest can best be handled by selling a hundred pound bag of mix which will produce approximately 140 loaves of bread product. It has been suggested and General Mills is willing to handle the matter of royalties in the following manner; General Mills will accept orders from any baker holding an Angelita franchise, subject, of course, to credit approval and matters of that character at a price to include a markup on each hundred pounds of mix of $3.00, having in mind that $1.00 would go to the Foundation for the purpose of the Hospital, $1.00 to an advertising company, in this case, Angelita Bread Company of Min- nesota, and $1,00 to Regans. The basic price which we are currently paifhg General Mills for this mix is $8.90 per hundred pound bag. Accordingly in the event General Mils receives an order from a particular baker, it would fill the order and bill the baker for $11.90. (The basic price may vary from time to time but probably not to any great extent.) Upon receipt of payment General Mills would remit the $3.00 in accordance with our joint in- structions. General Mills advises me orally, through Kir. Lohman, that they have checked such an arrangement with their Legal Department and they have concluded that the same would be satisfactory to them. In an endeavor to point out to you the practical result in handling this matter in this fashion, I am setting forth the following statements Regans prepare an Angelita "dough" or batch, using the following ingredients; 600 pounds of mix, 336 pounds of water, 15 pounds of yeast. Accordingly, there are 951 pounds of ingredients in a "dough?╟Ñ. The cost of ingredients on today?╟╓s prices if $71.AO for the mix, $2.48 for the yeast.