Next Generation Program and Basic Estate Planning

1. Next Generation Program and Basic Estate Planning Rhonda Heil West Division Franchising Manager MHOA

2. 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 MHOA

3. Next Generation The qualifications to become an Approved Owner/Operator have not changed • Operational • Financial • Business Management • RESULTS! MHOA

4. 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 MHOA

5. 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. MHOA

6. Decision Point • Qualified Now • Not Qualified but Qualifiable • Not Qualified and not Qualifiable MHOA

7. Final Approval • Approved Owner/ Operator Status is granted • An Approved Owner/ Operator Agreement is signed by the Candidate adding them to a franchise agreement. MHOA

8. 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 MHOA

9. 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 MHOA

10. 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 MHOA

11. Operator Organization/Entity • Multiple Approved Operators • Original Operator • Spouse • Approved Children • One Business Review and One Eligibility Status MHOA

12. BASIC ESTATE PLANNING • Do you have a Will? • Do you have an exit strategy? MHOA

13. Basic Estate Planning GOALS • Transfer wealth • Maximize Benefits / Value of Property • Minimize Taxes • Comply with McDonald’s Policies MHOA

14. Comply with McDonald’s Policies Franchise Agreement and Ownership Policies • Spouse • Children • Consent to any transfer • Approved Operator MHOA

15. 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 MHOA

16. 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 email: rhonda.heil@us.mcd.com MHOA