McDonald’s believes that locally owned and operated restaurants help the Company maximize brand performance and are at the core of its competitive advantage, making McDonald’s not just a global brand but also a locally relevant one. To that end, for 2008 and 2009 combined, the Company refranchised (i.e., sold company-owned stores to franchisees)

about 1,100 restaurants, increasing the percent of restaurants franchised worldwide to 81%.

Briefly discuss the expected impacts of refranchising on McDonald’s financial statements. LO.1