October 22, 2008MHOA Next Generation Program and Basic Estate Planning Rhonda Heil West Division Franchising Manager

October 22, 2008MHOA McDonald’s Philosophy Committed to training of qualified new owner/operator candidates New blood energizes the System while building the strength of the family business Qualifications are basically the same for all candidates

October 22, 2008MHOA Next Generation The qualifications to become an Approved Owner/Operator have not changed Operational Financial Business Management RESULTS!

October 22, 2008MHOA Program Requirements  20% ownership in a restaurant  Parent organization Eligible for Growth and Rewrite  Restaurant Manager or above  Application – Credit report will be run  QSC VP meeting with Candidate and parents  Signed Preliminary Agreement (entry date)  Quarterly updates from Candidate and parents  Succession Plan  Regular meetings with Field Service

October 22, 2008MHOA Application Submitted Assessment - Franchising reviews competencies & qualifications of individual Interview – Franchising will set up an interview with QSC VP for the candidate if they meet minimum qualifications.

October 22, 2008MHOA Decision Point  Qualified Now  Not Qualified but Qualifiable  Not Qualified and not Qualifiable

October 22, 2008MHOA Final Approval  Approved Owner/ Operator Status is granted An Approved Owner/ Operator Agreement is signed by the Candidate adding them to a franchise agreement.

October 22, 2008MHOA Conclusion of NG Program  Candidate is Approved – Signs A/O  Inactive in Program for more than 6 months  Failure to make measurable progress  Parent organization fails to maintain eligibility for growth and rewrite

October 22, 2008MHOA Spouse Development  All assets considered joint No minimum equity requirement No Credit Check  Same development requirements  Interview with QSC VP  Sign an Approved Owner/Operator Agreement  One store at a time

October 22, 2008MHOA Ownership Policy  O/O and Spouse may sign F.A.  Primary Approved O/O must own 51% equity or more Exception – spouses  Children may have up to 49% equity Ownership does not equal approval  No sibling or other partnerships

October 22, 2008MHOA Operator Organization/Entity  Multiple Approved Operators Original Operator Spouse Approved Children  One Business Review and One Eligibility Status

October 22, 2008MHOA BASIC ESTATE PLANNING  Do you have a Will?  Do you have an exit strategy?

October 22, 2008MHOA Basic Estate Planning GOALS Transfer wealth Maximize Benefits / Value of Property Minimize Taxes Comply with McDonald’s Policies

October 22, 2008MHOA Comply with McDonald’s Policies Franchise Agreement and Ownership Policies Spouse Children Consent to any transfer Approved Operator

October 22, 2008MHOA Basic Estate Planning WHERE DO I BEGIN? Family relationships and responsibilities Inventory of assets and liabilities – both McDonald’s and non-McDonald’s Review existing plans Objectives and purposes McDonald’s policies Consult with Advisors / Experts

October 22, 2008MHOA Q & A McDonald’s policy Booklets are located on AccessMCD “Basic Estate & Business Planning 6-08” “Next Generation Process 4-08” I can be reached at