Franchised corporation exclusion???

[jaemmons]

Scenario:

Company A - is a karate studio owned 100% by Owner 1. Has 15 separate locations which are owned 51% - Owner 1 and 49% by an employee of the individual location. No one employee owns any other studio. I don't believe that there is a stock purchase agreement for the ee owners to buy any direct stock in Company A or any other buy sell agreement for them to be able to buy Owner 1's interest over a period of time.

Company A provides payroll & HR services, along with other management functions for every studio that is established. I don't know what fees/income is received by Company A from any of the studios, but I would assume that something is paid to them for the aforementioned services.

Company A does not own directly any stock in any of the 15 locations.

Question:

I don't believe I have a controlled group, since there isn't any effective controlling interest with Owner 1 and any of the other studios (owns less than 80%). Could this be considered a Management Function Group under the ASG rules? If so, how?

If I need to provide any other information, please let me know.