Dispatch from Hubbard to Sue Mithoff re: MOWW/SMI EVAL

This document in pdf format

[handwritten]

Sue 10 Sept

Copy of reject

re: MOWW/SMI EVAL

[the following was typed]

This eval is cloudy in its plan.

The evaluator has not got the clear one, two, three scene and if we let this go through, people would tangle up all over the place because I have had trouble trying to figure out what she was about.

The basic thing wrong with this eval is they’ve got their sequences out. So the eval is actually I in its planning section.

People trying to execute this plan would have difficulty as it is not clear cut. The exact sequence which is covered in earlier telexes and materials from me was as follows:

A) Set up SMI totally, completely, absolutely and utterly without paying any attention whatsoever to MOWW. MOWW could continue to operate just as it is operating. There would be no change in it of any kind whatsoever. The main change of MOWW would come about through knowing now what was going to happen to it. SMI would be set up legally, contract-wise, promotion-wise and in every other way without paying any attention whatsoever to the lines of MOWW which would continue to run. MOWW would have to be ordered to continue to run. Every precaution would have to be taken to make MOWW continue to run. If this is violated, it would shatter what exists of a Mission Network. So this eval would be destructive by having that out of sequence sitting there. It is very cloudy in this planning.

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This is very waffly. Yet, is a very simple point. Somebody is still going up against MU’s here because complexities and things like this only occur in the presence of MU’s. In short, one would set up SMI totally, completely and utterly, a brand new network having damn all to do with the existing Mission Network. The existing Mission Network would continue.

B) SMI contracts would contain the advantages to having SMI separate from C of S and would include such things as no franchise holders must be of criminal background etc., etc, as telexed recently. The contracts must be air tight. The basic reason behind all this is that the GO is continuously involved in trying to handle or control franchises because they can put C of S at risk. So that is an underlying why which has been given no attention here whatsoever and which is taken care of at the contract stage.

C) Location has now been established as to the management location and the collection location in Lichenstein. But this has not been followed through by making sure that SMI would have any quarters in UK. What are they going to be put in, a root cellar or the swimming pool? This moves over into the SH Estate planning. MOWW and such were supposed to have their own quarters according to estate planning. But there is no mention of this here. You can’t locate an organization a hundred and fifty feet up in thin air. It might be here. I just can’t find it.

D) The point of “selling” a franchise area has been misunderstood by Legal WW. One cannot sell a territory. But one can sell a very posh package of set up materials for thousands and thousands of dollars which is a starter package. One sells the starter package and what goes along with that is a district and SMI contrct. The money which is received is from the starter package and the money which will be received is from the percentage which will be paid to SMI. There is not the least bit of legal difficulty at this if one takes a look at it. This idea has not been put on the lines previously. But it is very easy to resolve it and no reason to block the sale of franchise districts just because you can’t say “Chicago southend is now sold for $25,000.” You can say “The district Chicago southend is granted between block number so and so and block number so and so to the (corporate name of the franchise acquirer) who must now buy a starter package for his franchise of

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so many books, so many this, so many that, so many meters, so many this, so many that etc., at such and such a price and in return for signing the SMI contract which requires the payment of so many percent tithe to SMI.’ What is added to the contract is up to the GO as a series of protective clauses which are advantageous and otherwise. Do you realize that when this organization is put together as a Church from SMI, it will have all manner of tax benefits and everything else. It can trade, buy property etc., etc. and all of these things are tax exempt. There is one hell of a sales pitch that can be launched back of this. In the last issue of “Spotlight” newspaper there was an ad from a Henshal or Benshal about the United Church league, or some such thing, who laid out the benefits of being a church under the heading of “the fastests growing religion in the world”. This guy sells ordinations, and is getting away with it. What he says is true. It has terrific, terrific advantages from a tax point of view to run a church. A copy of this should be acquired, or I can get it back and send it through, but the point is this can be a highly adantageous thing that the guy is buying. What he pays for is the starter package and the promise to give a certain tithe to the basic organization and he also is therefore and thereby disconnected from C of S of California and from liability to the C of S of California, and this is what we’re trying to do and this is the only reason we’re organizing SMI. I have added to it the additional reason that it can make a fortune. It also gets this franchise scene under control. What has been overlooked here is the reasons why this organization is being created. We have just lost just now the Kristofferson suit, a 2 million dollar suit, because of the sloppy contacts and relationships of the franchise network to C of S of California. Therefore, it has got to be handled and it is behind times already. One has to sort out the sales pitch, how one will get money from it, the advantages, and get this fully understood by anybody along the line, or nobody will be able to sell a damn thing. This is actually not a very bright coclusion at Legal WW, but then they are concerned with law and not with promotion and Marketing. These new franchises have to be marketed, marketed, marketed. It’s a piece of cake. You can sell a dozen of them in every major city in the world. They gain in this enormous tax advantages, a good business that pays money, ways and means to invest money and hold money without tax ripoff and it’s actually like selling warm mittens to a frozen eskimo. You don’t have to sell it at all. But there is no concept of what we’re selling here. Just that

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“it’s illegal” to directly sell a piece of territory. It isn’t illegal to sell a starter package and include with it the right to a certain district and a contract for further help and guidance etc., etc. in return for certain percentages. That contract must contain protection for C of S and the GO and for us in very many ways, and yet still be advantageous.

E) At such time as SMI is running and is a going concern, then those franchise holders which are now part of MOWW are offered the option of moving over under the network of SMI. There is no thought here of greater percentages or all kinds of wild things which I’ve just read. It is a very simple operation. You simply move them over. You don’t make it a penalty for them to move over, you make it an advantage. With these money motivated guys, one could get them very, very excited of having all these advantages. They might think they have the same advantage under C of S of California, but actually it looks to them like it’s a much freer advantage. This is a matter of selling. And those that don’t move over, you simply start applying rules and regulations to. You lean on them. And they’ll move over. This is a simple matter of salesmanship.

F) The staff at MOWW simply phases over to SMI. SMI up to that time will be mostly promotional and sales and won’t have any management to amount to anything, so in the meantime, MOWW must be sharpened up as managers with a proper org board and that sort of thing. The this whole thing is moved over lock, stock and barrel under SMI. They are the management organization which are moved over. Up to that time there is no management organization, there is only a sales and promotion organization with legal angels and so forth all handled.

That is the essence of this caper. If this isn’t done in the above sequence it will fail. Missing in all of this is the actual reasons why SMI is coming into being and why it was created in the first place. This is all the subject of earlier despatches and discussions with CS 6 and others on this line at that particular time. It is not laid out in those earlier despatches as specific as it is above. This is in essence a review of all the existing materials which needed to be polished up a bit.

Let’s get this eval back on the rails where it was back about Thanksgiving of 1978 and get this show on the road.

I leave it up to you to rip this eval into shape or get it ripped into shape and get it understood. These

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people did not do their homework and if we released it in this fashion, both and all of these activities would fail in addition to being very expensive. So make it a very clear, crisp scene. When people don’t have clear, crisp scenes stated, then they haven’t understood what the scene is all about. So there are Mis U’s on this line still which have not been cleaned up.

But the above is the evolution and that evolution has got to go in in concrete. One step at a time. It’s a piece of cake. Let’s get the show on the road.