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The McDonald’s Origin Story Starring Michael Keaton On Circuit Soon

Get ready for a film based on the real, and gritty, story of how McDonald’s evolved into the fast-food giant it is today.

Nicole Crampton

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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

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PC: huffingtonpost.com

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.

Related: Starbucks Coffee Is All About Culture… For A Reason

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

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McDonald’s Deagu, Korea

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

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Prince Castle Milkshake Multi-Mixers

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

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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.

Related: 5 Unique Ways To Build Your Brand Like The Big Companies Do

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.

Related: 11 McDonald’s Facts That Will Knock Your Red And Yellow Socks Off

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.

Nicole Crampton is an online writer for Entrepreneur Magazine. She has studied a BA Journalism at Monash South Africa. Nicole has also completed several courses in writing and online marketing.

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Franchise News

Nando’s Adopts Technology; Focuses On Food & Funny

Without a secure failover, erratic fixed line connectivity can cause havoc, especially in the high-demand, fast-paced fast food sector.

Entrepreneur

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Without a secure failover, erratic fixed line connectivity can cause havoc, especially in the high-demand, fast-paced fast food sector. As the name suggests, the expectation is that both the food and service are delivered quickly, and at a standardised (high) level of quality. 

Modern customers require modern restaurants. As smart technology becomes the norm, diners expect reliable, high-speed networks and communications solutions, especially in the fast-food environment. These contemporary restaurants must, therefore, offer reliable POS systems and dependable back-office administrative support. In order to deliver on these requirements, a stable network is required.

“For Nando’s, downtime means an unreliable Point-of-Sale (POS), lost revenue and a frustrated customer base,” advises Sugan Ganasen, Cradlepoint Lead: Ingram Micro Southern Africa. The beloved fast-food franchise started in 1987, with the first restaurant opening in Rosettenville, Johannesburg.

“With a broad footprint of over 1 000 franchises across the globe, and 259 branches in South Africa alone, sending customers away because the POS isn’t working simply isn’t an option.”

Related: (Watch) Why Nando’s Is Clucking Its Way To The Top

According to Stephen Brookstein, Nando’s Head of Technology: South Africa and EMEA; “Nando’s is 30 years young, and facing the same challenges as all business in the local market. Stability is the key to offering customers a better experience, and this requires an integration of technology.”

In South Africa, the pace of work is at an all-time high. In the food and beverage industry, this means that downtime results in exponential losses, and reputational damage that may hinder relationships with a fickle consumer base. Whenever connectivity is interrupted, credit/cheque card payments cannot be accepted, and off-line card payments are particularly susceptible to fraud. With no secondary line for a failover connection, the required constant connection cannot be achieved.

“Customers expect to be able to make a card payment on a secure POS system, and our franchisees expect a constant connection. In a digital age, everything relies on internet access, and constant uptime must be achieved to deliver both productivity and profitability,” says John Sikiotis, Chief Strategy Officer and CFO: India, Middle East and Africa at Nando’s.

“As such, our business needs include full failover capability, centrally managed software, improved response to communication issues experienced at restaurant level, enhanced security and PCI compliance – all delivered in a scalable manner across the continent.”

After much market research and a comparison of the solutions available, Nando’s deployed Cradlepoint’s AER2100 and NetCloud Manager, supported by Infoprotect. This delivered reliable 99 percent uptime across all Nando’s restaurants in South Africa, guaranteeing that sales are never lost and customers are always satisfied.

“Nando’s selected a countrywide store advanced offering, which ensures that each store is fitted with a Cradlepoint AER2100,” confirms Ganasan. This solution is a new generation, cloud-managed 3G networking device that helps Nando’s to increase bandwidth and achieve four-nines reliability in a secure, flexible, and open-architecture platform. The AER2100 operates as the primary connection, with a cellular modem and dual sim capability.

Implemented by Infoprotect, offering managed IT solutions, data usage is centrally managed, monitored and controlled using the NetCloud Manager (Enterprise Cloud Manager). “This enables Nando’s to deploy and dynamically manage networks at geographically-distributed stores and branch locations, improving productivity, reducing costs and enhancing the intelligence of the network and business operations,” advises Brad Fraser, Infoprotect’s CEO.

Related: Show Me The Funny

This monitors ADSL data usage and adds valuable business resiliency. According to Sikiotis; “The NetCloud Manager allows Infoprotect to perform remote diagnostics, upgrade firmware, and configure devices remotely. This means our restaurants enjoy better return on investment with optimised data usage, real-time monitoring, load-balancing and proactive usage alerts.”

The result is a scalable solution offering effective uptime, a primary and secondary network ensuring a constant connection, uninterrupted card transactions, constant uptime, data usage management, PCI compliance and security, automated support, configuration and monitoring, and sophisticated scalability. 

“These solutions were impeccably implemented within tight timelines, and have created a future upgrade path, ensuring minimal disruptions. The benefits offered speak for themselves,” concludes Sikiotis. “The cost-efficiencies realised include less downtime, more satisfied customers and less data breeches. Customers are satisfied and no sales losses are experienced due to offline POS systems. With this in mind, a reliable network and constant uptime offer a real cost saving solution.”

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Key Insights From The 2017 FNB Franchising Leadership Summit

South Africa’s exponential franchises took centre stage at the 6th edition of the annual FNB Franchising Leadership Summit held recently at Indaba Hotel in Fourways, Johannesburg.

Entrepreneur

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South Africa’s exponential franchises took centre stage at the 6th edition of the annual FNB Franchising Leadership Summit held recently at Indaba Hotel in Fourways, Johannesburg.

Themed “exponential growth”, the Summit coincides with the world-wide commemoration of Global Entrepreneurship Week (GEW), which celebrates the remarkable contribution of entrepreneurs to the global economy. The 2017 Summit focused on unpacking four perspectives of exponential growth, namely: entrepreneurship, brand, employment and personal growth.

Related: To Buy Into A Franchise Or Purchase A Licence? 3 Factors To Consider

Mike Vacy-Lyle, CEO of FNB Business, says, “The franchising sector has some great examples of businesses demonstrating exponential growth like the success story of unique local brands such as RocoMamas. The franchising sector is remarkably resilient and should be celebrated, hence we felt it was important to use Global Entrepreneurship Week to highlight the contribution of this sector to our economy.”

“As a bank which values the role of entrepreneurs, we are delighted to have provided a platform to the people leading some of South Africa’s world-class franchises to relay their first-hand account of what it takes to build a successful business,” adds Vacy Lyle.

Among the key insights that were shared at the Summit was the need for businesses to deeply understand customer needs and to consistently differentiate themselves. Brian Altriche, Founder of RocoMamas shed light on building honest brands.

“People know when something is a fake; you can push it to them for a while but in the end they catch on. In today’s world, brands need to be built on the premise that I am offering what you expect to receive when you read my communication and this is the main thing with digital. The consumer is the one that drives the conversation and people do not complain for the sake of it. Therefore, brands that meet the consumer’s expectations are the ones that will continue to win.”

Related: 3 Factors To Focus On When Opening Your First Franchise

Gerry Thomas, Managing Director for Krispy Kreme South Africa is of the view that franchises grow exponentially because they have a key market differentiator as a driving force. Furthermore, Thomas believes that winning business formulas create a “need” as opposed to a “want”.

“Exponential franchises are constantly looking for new concepts and innovative ways to make things faster, easier and better. These businesses are not scared to take risks and break with old traditional ways of doing things. Businesses that are embracing this way of thinking will always be miles ahead. We are excited with the incredible success of this year’s Summit and are looking forward to continued involvement by FNB Business in helping to grow this important sector,” concludes Vacy-Lyle.

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The Rise Of Women In Franchising

Over the last ten years, the franchising industry has seen a trend of more women taking up opportunities in franchising and this is expected to further increase over the next five years.

Entrepreneur

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Morne Cronje

Over the last ten years, the franchising industry has seen a trend of more women taking up opportunities in franchising and this is expected to further increase over the next five years.

According to the international Franchise Association (IFA) there are more than 25% of women operating franchises in the world and that doesn’t include another 17% of the population where men and women operate franchises together as partners.

Morne Cronje, Head of Franchising at FNB Business says, “Women have the ability to use their time, energy and resources effectively to meet and achieve business goals. This trait, in my view, is the cornerstone for successful women in franchising.  In a country like South Africa, the growing involvement of women in franchising is vital, considering that women make up the majority of our population.”

Related: Women March Ahead In Franchising

Cronje shares four successful franchise industries that women are dominating in:

  • Education – More women are attracted to this space because they are not only looking for profits but a community and economic impact. 
  • Slimming salons – Women-led franchises in this space tend to specialise in weight loss products and services. Currently, there are good business opportunities in this component of the health sector as more people are becoming health conscious.
  • Accessory and arts – Designing and selling jewelry such as brooches, rings, necklaces, earrings, and bracelets. More women are starting to become thought leaders in this business, setting trends and staying ahead of popular accessories.
  • Beauty salons & Nail bars – This is one of the industries pioneered by women, with its main focus being hairdressing, make-up, cosmetic treatments, manicures, pedicures and nail enhancements. Interestingly men are also increasingly making use of these services.

Despite the limited awareness about the important role and great strides that women continue to make in franchising, it’s important for more women to consider exploring opportunities in this sector since it’s one of the most resilient.

Related: The 5 Secrets Of Business Success

The success rate of a franchise business is far better than a traditional start-up or small business. Consequently, franchising is one of the few industries in South Africa that are showing steady contribution to the economy and employment.

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