Where's the beef?

If only they could all be as vegetarian as the deal that McDonald's Corp. has just done in Iceland! From Nov. 1, the Golden Arches will no longer adorn the fronts of the hamburger chain's three outlets in the country and the local franchisee, Lyst ehf, will put up its own Metro logo instead.

Lyst managing director Magnus Ogmundsson says the Americans didn't ask him for payment or make any tough demands on him. Both sides simply agreed the McDonald's name wouldn't be on his products and their six years of cooperation would end.

"We just came to mutual agreement that we would stop using their brand," he says. "They've been very nice to work with and we've just been delighted to work with these guys."

Apparently, Icelanders are divided over whether the disappearance of such a recognized, but not always appreciated, global brand is a good thing or a sad signal of decline for their embattled country. But for Ogmundsson, the future looks as satisfying as a burger and fries.

Since the collapse of the Icelandic economy at the start of the credit crunch, he has struggled to cover the cost of his ingredients. He has been forced to peg his prices low enough to compete with Kentucky Fried Chicken, Pizza Hut, Subway and other denizens of the global fast-food universe, bringing in 800,000 cash-strapped locals a year -- more than before the credit crunch -- and doing 800 million kronur ($6.4 million) in sales. Now he may use locally sourced onions and beef and not spend Iceland's devalued currency to import expensive McDonald's supplies from far-off Germany.

He'll be able to cut his prices slightly, continue paying rent to his landlord, Landic Property hf., and still improve his margins.

But, then, according to Ogmundsson, McDonald's didn't invest in his company and he paid not McDonald's, but the previous franchise holder for the right to use the name. Meanwhile, McDonald's has decided that, from its point of view, it is closing the restaurants and retreating from Iceland for the foreseeable future. Reports said McDonald's blamed the move on the very challenging economic climate and the difficulty of following its established business model in a remote island nation with a population of 300,000 -- smaller than Luxembourg or Wyoming.

So everyone is happy. Iceland joins Albania, Armenia, and Bosnia and Herzegovina, among others, on the list of countries where McDonald's does no business. Icelanders carry on eating what Ogmundsson admits will be "quite similar" burgers and paying a lower price. Lyst stays in business.

You might think that at least life will become a little tougher for macroeconomists trying to assess Iceland's cost of living relative to other nations after the country officially delists from The Economist magazine's Big Mac Index, which measures national wealth by the price of a globally standardized hamburger on the streets of the capital city. But Reykjavik has long been too small a burger market to receive regular coverage in that important chart. Iceland's economic erosion will likely continue, even if the rest of the world fails to follow the slide.

But there's a wider question here. It is this: Where's the beef? What kind of transaction is it in which a business disappears and re-emerges rebranded and rejuvenated without so much as a token exchange of money?

When Russian tycoon Alexander Lebedev and his son, Evgeny, bought London's money-losing Evening Standard newspaper from British publishing group Daily Mail and General Trust plc this year, they paid a nominal £1 ($1.63). (They later turned it into a free newspaper, but not, one fears, before they had written off that initial investment.)

When Richard Branson's Virgin Group Ltd. sold the music retail business Virgin Megastores to its management, it was also for a token £1.

The new management made the odd decision to rename the business Zavvi Retail Ltd. and then saw it tumble into administration, dragged down by the collapse of its main supplier, Woolworths Group plc. But at least it paid its dues to Virgin.

McDonald's won't take a big hit by forgoing its nominal Ikr124 ($1). But the forms should have been observed.