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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.

Franchise News

FASA Launches Its 2018 Events To Renewed Optimism For Growth In The Franchise Sector

Stand a chance to win with FASA. Enter online today.

Entrepreneur

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With the economy showing a positive growth for the coming year and public and business sentiment on an all-time high, the Franchise Association of South Africa (FASA) is poised to spearhead initiatives and events that will nurture entrepreneurship, encourage small business development, add to skills growth and ultimately add much needed jobs to the economy.

The franchise sector has continued its growth trajectory despite the tough economic conditions of the past eight years, adding around 88 new franchise systems and 2 789 new outlets in 2017 – proving that franchising remains one of the soundest business formats, structured to withstand economic challenges.  With a contribution of 13,3% to the country’s GDP through its 845 franchise systems, over 40 000 franchise outlets are giving direct employment to close to 400 000 people.

According to Vera Valasis, Executive Director of FASA, “the continued growth of new franchise concepts proves that franchising is the entrepreneurial heart of any economy – its growth might be temporarily curbed due to economic influences, but it remains the one business sector that is always innovating and has the highest success rate.”

Related: What To Know About Franchising Your Business

Vera Valasis believes that on a global front, our changing world is opening up opportunities on the franchise horizon. “As spending patterns change, entrepreneurs will be looking at business sectors where there is an appetite for franchising and flourishing new industries will start to see the light. Niche markets are also offering one-of-a-kind franchises that give one the opportunity to get in on the ground floor of a new franchise trend.”

With the country’s renewed energy and more positive outlook, both on the political and economy front and for those wanting to go the franchise route, whether as a prospective franchisee or as a developer of a new franchise concept,  FASA has the following events and initiatives during 2018 which include:

  • The FASA Franchise Manual, the official annual directory for the Franchise Association of South Africa (FASA), is the ‘bible’ for the industry in South Africa. It lists all franchises but highlights in detail its accredited members and features practical articles – from how to evaluate a franchise to the legalities to setting up a franchise.  Click here for your electronic copy of the 2018 manual
  •  FASA’s Awards for Excellence in Franchising, sponsored by Sanlam – the industry’s most prestigious accolades – takes place at a breakfast event at The Venue at Melrose Arch on Thursday 7th June 2018.  FASA members can enter the Awards here. To book your seat to attend the Awards Event breakfast please email fasa@fasa.co.za – tickets are R290 excluding VAT per person
  • FASA’s annual Convention, aimed at industry stakeholders as well as those wanting to franchise their business or purchase a franchise takes place at the Forum Campus in Bryanston on Thursday 28th June 2018. Convention. Delegates have access to attend no less than 50 lectures or presentations related to franchising. Click here to book your ticket to attend the convention. FASA members get a 50% reduction on the ticket price.
  • As the economy recovers, FASA’s International Franchise Expo (IFE), taking place on Level  5, Entrance 22 and 25 of the Mall of Africa from the 29th June to the 1st July 2018  is where the who’s who of the franchising world will be on show to promote their brands and offer franchise and business opportunities. For more information visit IFE at http://ife.co.za/.  Book your stand now – FASA members receive 35% discount on the cost of stands – click here http://ife.co.za/exhibitor-information/

Related: Meet Jan Grobler: Serial entrepreneur, Advocate, And Job Creator

Book now to attend one or more of the 21 free public seminars by emailing fasa@fasa.co.za – seats are limited http://ife.co.za/free-franchise-seminars/

The pubic are welcome to attend any of FASA’s events to learn more about the franchising business method.  Members of FASA are given preferential rates to attend events.  For more information contact fasa@fasa.co.za or call 011 615 0359.


WIN WITH FASA

Win tickets to attend two important franchise events – the FASA annual convention and the Franchise Expo. Win 2 free tickets to attend the convention and International Franchise Expo valued at R6000.00

The tickets include:

  • Free attendance at FASA’s Franchise Convention on Thursday 28th June for two people where you will have access to over 50 lectures/presentations on the day and find out everything about franchising from the experts
  • Two Free entry tickets to attend the Franchise Expo at the Mall of Africa from the 29th June to the 1st July
  • Two Free 2018 Franchise manuals.

HOW TO ENTER

Send an email suggesting why you would like to attend this year’s convention with the header “FASA Competition 2018 – Entrepreneur Magazine SA” to Giuli Osso at giuli@gocomms.co.za.

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Entrepreneur Today

The Simple Strategy That Grew Simply Asia Into SA’s Best Eastern Restaurant

The culture created by Mr Chai Lekcharoensuk, founder of Simply Asia Thai Food & Noodle Bar, helped turn his dream of traditional Taiwanese food into a successful and growing franchise. Find out how he got it right.

Entrepreneur

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Little compares to the happiness that is felt across the table of a great meal shared with family or friends. Or to that moment when you experience the sights, smells and tastes of a new culture for the first time.

It’s an experience Mr Chai Lekcharoensuk, founder of Simply Asia Thai Food & Noodle Bar, wanted to create when he came to South Africa 25 years ago. Back then, he couldn’t find any Thai food that reminded him of home and so he opened Wang Thai Restaurant, in Cape Town, an upscale establishment that promised an authentic Thai dining experience: mouth-watering meals made by Thai chefs, using only the freshest ingredients.

“The success of Wang Thai inspired Mr Chai to make Thai cooking something everyone across South Africa could enjoy,” says Enzo Cocca, Group General Manager of Simply Asia. “And so, he changed the restaurant format from fine dining to family friendly restaurants – and the Simply Asia brand was born, with the first branch opening in Cape Town’s historic Heritage Square.”

simply-asiaThai food was not unfamiliar to South Africans at the time, as Thailand was a popular travel destination. But Mr Chai identified an opportunity to bring speciality, authentic Thai food and trading formats to the market and, by 2006, the company had opened 12 restaurants.

Today, customers can experience the taste of Thailand at 64 outlets across South Africa, Zimbabwe and Botswana, as Simply Asia continues to grow its footprint across the continent. By the end of 2017, the restaurant count will increase to 66 – and 72 by the end of 2018.

Quality and authenticity

Every restaurant in the franchise chain operates on the same values that the very first restaurant was built on: quality and authenticity. It’s these values that Enzo believes sets Simply Asia apart in a market that is now crowded with a wide variety of specialist food styles and trading formats.

“Consumers have a lot of choice today. They can find high-quality, readily prepared food anywhere, from restaurants, to food trucks, to supermarkets. There are a lot of competent local and international traders entering the market every day, many offering similar cuisine.”

Related: Multi-Unit Franchising Growing In South Africa

So, how does Simply Asia keep customers coming back for more – and appeal to new customers?

The answer to that question is in the question itself: “Customer retention has been key to our growth,” says Enzo. “We have to stay relevant to our customers and still be able to attract new customers every day.”

Employees first

Simply Asia’s growth strategy centres on four pillars: training, innovation, partnering with the right people, and leveraging tools and technology that provide real-time insights into its operations.

“Franchise owners and their teams are continually trained and upskilled to ensure they always offer the best possible customer service and experience,” says Enzo.

He adds that a Simply Asia franchisee is not a hobbyist looking to make an extra buck but is a passionate businessperson who is committed to the values of quality and authenticity above everything else.

“Many of our franchisees own multiple stores and treat their investment as a serious business. We believe this strategy breeds a different calibre of franchisee – one who is driven and understands that the secret to success is hard work, respect and transparency.”

Innovation at all touch points

Underlying all of this is an aggressive approach to innovation, says Enzo. Innovation extends across product offerings and business models and it’s one reason why Simply Asia has maintained its relevance and appeal to new and existing customers.

“Innovation, to us, means delivering new experiences to our customers, whether that’s through more variety and flavours on our menus, our rewards programme that puts cash back in customers’ pockets, or through partnering with service providers like Uber Eats to bring convenience to our customers,” says Enzo.

In a market where customers are spoilt for choice and competition is high, the key to success is having access to the right information, at the right time, says Enzo.

Related: Key Franchising Trends To Consider For 2018

“We control the entire supply chain, from Thailand right to our stores. When you work in the restaurant industry, control of your business processes is important. Information must be real-time and reliable so that you can properly manage your inventory and quickly make the right decisions as situations arise. If you don’t have that information, you can’t see where you’re going.”

simply-asia1For Enzo, the various tools within the Sage Evolution and Payroll solutions give him access to that information and allow him to analyse data in real-time to easily pinpoint issues and opportunities.

“In June 2017, we added 15 new items to our menus across our network of restaurants. As these items were perishable, we needed to optimise the ordering and delivery of fresh ingredients across our production facility, three distribution centres and, of course, all the stores,” says Enzo. “Sage gives us the insights we need, when we need them, resulting in zero wastage and optimal stock levels across the network.”

Transparency, trust, respect

Taking the guesswork out of supply and demand has given Enzo more time to visit Simply Asia stores and to spend time with managers, staff and customers. “At Simply Asia, we’re building more than just restaurants. We’re building opportunities for others and that depends on strong relationships built on trust and respect.”

Related: Nando’s Adopts Technology; Focuses On Food & Funny

Enzo has the following advice for anyone looking to either buy a franchise in a chain store, or to franchise out their own businesses: “The key to building a successful franchise group is to fully understand your market and your customers. This is your starting point. If you want to buy a franchise, be sure to interrogate the business model in detail and to get a clear picture of the actual results.”

The people of Thailand place a lot of value on hard work, balanced with friendliness and hospitality. Traditionally, people would greet others by asking if they’d eaten yet. This sums up the Thai way of life, which revolves around sharing and enjoying delicious food in great company.

“When you bring the flavours of another country into your community, something magical happens; a culture is shared between strangers. At Simply Asia, we enjoy nothing more than sharing an authentic Thai experience with our customers.”

*For more on the story, please watch the video here.

 

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Entrepreneur Today

Franchising Sector Ready To Lend A Hand

How business can use franchising to improve jobs and support entrepreneurship throughout South Africa.

Entrepreneur

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“We are at a moment in the history of our nation when the people, through their determination, have started to turn the country around.
Now is the time to lend a hand…
Now is the time for each of us to say ‘send me’…
Now is the time for all of us to work together, in honour of Nelson Mandela, to build a new, better South Africa for all.”
Cyril Ramaphosa, SONA 2018

The Presidents commitment to small business

The SONA speech by President Cyril Ramaphosa and his commitment to supporting small business and entrepreneurship has been welcomed by Tony Da Fonseca, the Franchise Association of South Africa’s Chairman, who in 2017 had already met with the chairperson of the Parliamentary Portfolio Committee for Trade & Industry to pave the way for greater co-operation between government and the franchise sector.

“We are encouraged by the President’s promise to increase co-operation with business and look at ways to encourage entrepreneurship, youth training and job creation” says Tony Da Fonseca.

“We are confident that the franchise sector can play a pivotal role through innovations like the development of social and micro franchising which hold enormous and largely untapped potential for the development of the economy and improve service delivery.”

Confirming that the growth of the economy will be sustained by small businesses, “as is the case in many countries”, President Ramaphosa confirmed that government would honour its undertaking to set aside at least 30 percent of public procurement to SMMEs, co-operatives and township and rural enterprises and would continue to invest in small business incubation. “It is our shared responsibility to grow this vital sector of the economy.”

Franchising is ready to play a larger role

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As a sector that already contributes 13, 3% to the country’s GDP generating an estimated R587 billion through its 845 franchise systems, 40 528 franchisees and employing 343 319 people, franchising is perfectly poised to play an even bigger role in furthering small business development, skills transfer and job creation.

“As a successful businessman and former franchise owner himself, Cyril Ramaphosa is familiar with the far-reaching potential that franchising has in small business development, skills development and job creation, says FASA Chairman Tony Da Fonseca.

“We are hopeful that he will look to us in the franchise sector to assist in building that ‘small business support ecosystem that assists, nourishes and promotes entrepreneurs’ that he referred to in his SONA speech.”

That, together with the welcome measures by government to reduce the regulatory barriers for small business and the introduction of an innovation fund targeted at start-ups and small suppliers that could become supply chains to the franchise sector, will go a long way to opening the doors to small business expansion and the benefits to the economy that will flow from that.

Related: Multi-Unit Franchising Growing In South Africa

The Franchise Association of South Africa (FASA) has always been a proponent of small business incubation and has, over the years, embarked on various public/private initiatives to grow the franchise sector. Their efforts have included youth cadet schemes through the Jobs Fund, developing micro businesses to become franchise-ready through the Department of Small Business Development’s Micro Franchisor Development Project and through various private initiatives with funders and franchise members.

The franchise sector to stimulate entrepreneurship and jobs

According to Tony Da Fonseca, much more can be done in the public/private development space. “The opportunities to transform government services, such as health care, water delivery, education and in many other areas, through the social franchise format, are enormous. Both locally and internationally, pilot projects in social franchising that operate on commercial principles, making enough profit to sustain operations and re-investing surplus profits into the community they serve, have proved to be viable.”

According to Tony Da Fonseca, the franchise sector is well-positioned to come together in a concerted effort to stimulate entrepreneurship and create much-needed jobs.

Franchising in South Africa currently services around 17 business sectors – way behind countries such as Australia, Europe, Canada and the USA who boast between 25 and over 70 business categories.

Related: Key Franchising Trends To Consider For 2018

“The opportunities to expand into many more sectors and particularly in the social and services sectors of the economy are endless. We welcome the opportunity to work with government in creating an entrepreneurial environment that will grow investment confidence, introduce new small business concepts via the franchise system, accelerate BEE and enterprise opportunities, giving training to the youth and above all create those much needed jobs.”

Mr President, the franchising sector is ready and able to take on the opportunities for ‘renewal and revitalisation, and for progress to build the fair, just and decent society to which Nelson Mandela dedicated his life.’

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