But broadly speaking, consistently really strong and consistent performance across the business that we’re very, very pleased with.
Mike Cieplak: Our next question is from Jon Tower with Citi.
Jon Tower: Great. Thanks for taking the question. First clarification and then a question. Ian, could you provide potential range of the size of the property gain in the fourth quarter? And then second, I’m just curious to gain your thoughts on the recent NLRB ruling that’s to be implemented, I believe, in December. And how you think this might influence your own business or that of the industry in the years ahead?
Ian Borden: Jon, it’s Ian. Let me take the first one, and then I’ll turn it over to Chris on the NRLB. On the property gain, which is in our IOM segment, we expect that to be about $60 million. I think we’ve – you’ve probably heard us talk before, we get these kind of high-value individual properties that sometimes the highest and best use is different than what we’re using it for today. This is an example of that. I don’t think we certainly expect these are going to be occurring very often, but this is a case where that was just a good business decision to make, and that’s what we’re expecting in quarter four on that.
Chris Kempczinski: Yes. And on the NLRB ruling, I mean, as you would expect, we strongly object to the last week’s NLRB ruling. We think it’s going to undermine small business ownership in the U.S. If you think about it, the franchise business model, it’s really a great American innovation. It’s created wealth for thousands, particularly underrepresent minorities and women. And this is something we think that needs to be supported, not attacked. And so in our mind, this is yet another example of agency overreach coming out of D.C. And we expect it’s going to be contested. It’s going to be contested in the courts. It’s going to be contested in Congress. In fact, you may have seen already the Senate has, as indicated, they’re going to seek to pass the continuing resolution, which is an opposition to this ruling.
So McDonald’s certainly opposes it. We’re going to support others who oppose it. How it all plays out in time, I think it’s tough to say, but this is something that’s going to affect everybody. And as we’ve shown throughout time, so long as there’s a level playing field and McDonald’s is on the same level as everybody else, we tend to win. And so even if this NLRB ruling were to pass, it’s going to affect the industry at large, and we think we’re better positioned than anybody else to withstand it.
Mike Cieplak: Our next question is from Andy Barish with Jefferies.
Andrew Barish: Good morning. Just shifting gears to IOM for a moment. Can you give us roughly how much of the $100 million to $150 million in subsidies has shown up so far? And then on the company-owned margin question, but related to IOM, I mean, this used to be 20% margin business, obviously, more pricing in the business today. Any thoughts longer term about kind of realizing back to 20% restaurant level margins in this segment?
Ian Borden: Good morning, Andy, it’s Ian. So I think on the subsidies, I guess the headline would be we expect to spend in line with what we’ve said consistently for the year, $100 million to $150 million. And so I think we’re tracking in line with that where you’d expect us to be at this point in the year is what I would say on that. I think in terms of longer-term margins, I mean, if you go back over our 60-year history, I mean we’ve had obviously many periods of higher inflation that we’ve had to work through over time. We’ve always been able to kind of get margins back as we’re able to continue to drive strong top line growth. And I certainly don’t see any reason why that would be different this time. I mean I think we have – we’re going to make sure, as you’ve heard us talk about today, that we stay really disciplined in how we’re pricing to the consumer.
We feel we’ve got a lot of capability, data and analytical capability that’s allowing us to do that better than most. And we also have industry-leading momentum as you continue to see in our results. And if you are able to have industry-leading momentum, and as you heard Chris talk about, you continue to invest in those structural advantages, whether that’s the fully modernized estate, digital platforms at scale, obviously, you’re going to be in an advantaged position versus others and how you can kind of continue to let that flow through the business. And I think that’s certainly what we expect as we look forward on margins and the ability to kind of build those as we continue.
Mike Cieplak: We have time for one more question, Brian Mullan with Piper Sandler.
Brian Mullan: Thank you. Just a question on development specific to the U.S. Can you perhaps comment on the takeaway only location in Texas. Any early learnings you’ve had thus far? I imagine we might hear more about this at the Investor Day, but just high level, do you expect new formats have the potential to play a more meaningful role in future U.S. unit growth?
Chris Kempczinski: So you’re right, we will talk a little bit more about this actually a lot more about this when we get together on December 6. We’re continuing to follow and assess the test that we have down in Texas. I think you can say that certainly there is going to be an opportunity for us to have restaurants that are smaller footprint that don’t have a dining room. You will see some of those. But I think from a development standpoint, the vast majority of the development opportunity that we see is for our traditional restaurants. We think that there’s still quite a bit of opportunity for traditional restaurants. That will be the bulk of it. You might see, again, something around the edges, which is some of the smaller formats, but the big idea is traditional restaurants that we’ll talk more about on December 6.
Mike Cieplak: Okay. Thank you, Chris. Thank you, Ian. That completes our call today. Thanks, everyone, for joining.
Operator: This concludes McDonald’s Corporation Investor Call. You may now disconnect, and have a great day.
