October 22, 2008 MHOA

Next Generation Program and

Basic Estate Planning

Rhonda HeilWest Division Franchising Manager

October 22, 2008 MHOA

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, 2008 MHOA

Next Generation

The qualifications to become an Approved Owner/Operator have not changed

Operational Financial Business Management RESULTS!

October 22, 2008 MHOA

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, 2008 MHOA

Application Submitted

Assessment - Franchising reviews competencies & qualifications of individualInterview – Franchising will set up an interview with QSC VP for the candidate if they meet minimum qualifications.

October 22, 2008 MHOA

Decision Point

Qualified Now Not Qualified but Qualifiable Not Qualified and not Qualifiable

October 22, 2008 MHOA

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, 2008 MHOA

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, 2008 MHOA

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, 2008 MHOA

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, 2008 MHOA

Operator Organization/Entity Multiple Approved Operators

Original Operator Spouse Approved Children

One Business Review and One Eligibility Status

October 22, 2008 MHOA

BASIC ESTATE PLANNING

Do you have a Will? Do you have an exit strategy?

October 22, 2008 MHOA

Basic Estate Planning

GOALS Transfer wealth Maximize Benefits / Value of Property Minimize Taxes Comply with McDonald’s Policies

October 22, 2008 MHOA

Comply with McDonald’s Policies

Franchise Agreement and Ownership Policies

Spouse Children Consent to any transfer Approved Operator

October 22, 2008 MHOA

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, 2008 MHOA

Q & AMcDonald’s policy Booklets are located on AccessMCD

“Basic Estate & Business Planning 6-08”“Next Generation Process 4-08”

I can be reached at email: rhonda.heil@us.mcd.com