The origin story of McDonald’s, titled The Founder, is set to hit cinemas this year. The film is based on the true story of how Ray Kroc, played by Michael Keaton, manoeuvred himself into a position to buy the 1950s fast-food operation from brothers Mac and Dick McDonald, played by Nick Offerman and John Carroll Lynch. Kroc (Keaton) turned the small family burger business into the multi-billion-dollar fast food empire you know today.
McDonald’s: The Origin Story
During the Great Depression in New Hampshire, two young brothers headed west to work in the ‘movies’, but the closest they got was hustling around film sets. Eventually, when they were both in their 30s, they opened a tiny drive-through restaurant in San Bernardino, California. This original restaurant was nothing like the McDonald’s outlets in operation now.
After owning the drive-through restaurant for several years, the McDonald brothers noticed that 80% of their sales were coming from hamburgers. Taking this insight to heart, they closed their doors for three months and overhauled the entire business into a self-service restaurant where customers could place orders at windows. The McDonald’s we know today was born.
They went lean, fired their 20 servers, and downgraded to paper wrappings and cups so they didn’t need to hire a dishwasher. The McDonald brothers then simplified their menu to just nine items, which included hamburgers, cheeseburgers, three flavours of soft drinks in one 12-ounce (350ml) size, milk, coffee, potato chips and pie.
“Our whole concept was based on speed, lower prices and volume,” says Richard ‘Dick’ McDonald. Taking inspiration from Henry Ford’s assembly line production of vehicles, the brothers developed the ‘Speedee Service System’ and mechanised the kitchen of their roadside burger shack.
In the beginning, a 12-person crew specialised in specific tasks, and a large amount of the food was preassembled, which reduced preparation time. The hamburgers were standardised, and if customers wanted something custom, they would have to wait for it.
During this time, Ray Kroc, a Chicago-born businessman, was helping the brothers assess their business opportunities in South Carolina. In the late 1950’s the company expanded into nine locations, and quickly became a leading franchise. Ray Kroc turned the small business into a corporation and quickly bought up the controlling equity in the business.
Building An Empire
Over the next 50 years, McDonald’s expanded from a small operation with roughly ten restaurants into the international juggernaut that it is today. The corporation started by spreading throughout the United States, and once it had saturated this market, it expanded overseas.
McDonald’s restaurants now operate in 118 countries and territories around the world, serving 68 million customers every day through its 36 525 restaurants. It employs approximately 420 000 people.
The restaurant has diversified over the years, offering unique menus to specific locations as well as halaal options in various Islamic countries. This rapid expansion has earned the company praise from business analysts, and success as a globally competitive franchise.
Over the years, McDonald’s has pioneered multiple features of the fast food industry. This franchise can take ownership for introducing the special morning breakfast menu in the 1970’s as part of its innovative food offerings.
Related: McDonalds: Susan Rawoteea
The Real Burger King
Ray Kroc rose from humble beginnings, which included working as a paper cup salesman and jazz musician. Now, he is one of Time magazine’s ‘Most Important People of the Century’ because of his role in building McDonald’s into, arguably, the most famous and successful quick service restaurant in the world.
Back in 1954, Kroc was a struggling Prince Castle Multi-Mixers salesman. He then came across the McDonald brothers’ small hamburger shop in San Bernardino. At the time, the establishment was simple, only serving the basics, which were hamburgers, French fries, soft drinks, and milkshakes.
The brothers revived Kroc’s sales figures by purchasing several mixing machines for their kitchen from him. Curious about why the brothers needed so many mixers, Kroc decided to investigate the purchase further. Once Kroc had discovered the secret behind their ‘Speedee Service System’, he suggested that the brothers expand their presence.
The brothers appointed him as McDonald’s national agent and he began to launch their franchise across the country.
Building A Franchise
In just six years, Kroc bought out the founding brothers for USD2.7 million, and by 1965, there were more than 700 restaurants across the United States. In order to maintain uniformity of quality and service, Kroc developed an innovative franchising model; he would grant a franchisee the right to only one store location at a time.
To ensure the success of his franchise, Kroc established strict standardised operations for all of the McDonald’s outlets, including such things as uniform portion sizes, simplified food preparation, affordable packaging and common ingredients. He also introduced heightened customer service standards, but left the marketing up to each franchise.
Although the initial creation of this concept didn’t come from Kroc, he had the vision to turn a niche restaurant into an empire.
He also insisted on keeping costs down in order to cater to the low-income market, ensuring that everyone could afford a McDonald’s meal.
Establishing A User-Friendly Franchise
Kroc knew that each franchise would essentially rely on the image created by the brand, which led him to standardise both cooking and serving procedures.
This process was kept efficient and easy to learn, so that new and unskilled employees could be relied upon to represent the McDonald’s brand statement of quality.
When welcoming a new franchisee to the group, Kroc established a new arrangement, which allowed him to increase his earnings. He would charge a 1.9% commission on a franchisee’s sales, rather than charging a large start-up fee.
If you’d like to learn more about how McDonald’s went from one location in the USA to thousands of sites worldwide, this biopic of the evolution of McDonald’s will delve into the origins of how the fast food empire began, who ultimately started it and who had the vision to turn it into what it is today.
The Founder starring Michael Keaton will open in South Africa in the fourth quarter of 2016. Watch the trailer below – this movie is not to be missed.