July 7, 2010
I went to McDonald’s this morning for breakfast and I thought to myself: What A Wonderful World. I find it amazing that they are so efficient. I want to operate my business exactly like that. My ideal is to inspire others. It’s why I started this blog. I want to give other the opportunity that I did not have. I also want to inspire others vicariously through my repertoire. I want to become something else entirely an archetype. I want to focus on every aspect of design and own my own studio. With this being said, I would like to give a brief insight into the McDonald’s franchise and how they became one of the world’s largest chain of hamburger fast food restaurants, serving nearly 47 million customers daily.
McDonald’s is a huge multi-national restaurant chain. There are restaurants all over the world that are willing to sell you a Big Mac and fries. Indeed, you would probably be hard-pushed to find a country that does not contain a few McDonald’s restaurants somewhere within its borders. The company is now so big that you could be forgiven for thinking that it has always existed. But it hasn’t. It was started in the first half of the 20th Century by two brothers – neither of whom was named Ronald.
The First Burger
Reports differ about when Richard and Maurice McDonald opened their first restaurant. Some would state that the Airdrome in Arcadia, California was the very first, opened in 1937. Others claim that it all began in 1940 with the McDonald’s Barbecue restaurant in San Bernardino, California1. What is not in dispute, however, is that both of the above were false starts. They were both the kind of American restaurant where cars park around a central hub (where the food is prepared) and it is delivered to the waiting customers by ‘car hops’.
In 1948 the brothers became disaffected by this style of restaurant, the pressures of a full menu, and the hassle of managing staff, and so decided to scale down the operation. They developed the idea of an ‘assembly line’ whereby a reduced menu (consisting only of hamburgers, cheeseburgers, french fries and drinks) could be cooked cheaper and quicker, which would hopefully lead to a higher turnover of customers. And so it was, on 12 December, 1948, that the new revamped McDonald’s Restaurant opened, and Richard McDonald cooked the first McDonald’s hamburger.
During the next few years, the restaurant went from strength to strength, and the building had a slight redesign. The brothers had a slender yellow arch built at each end of the building, looping over it but not yet joined together to make the now famous ‘M’.
The First Franchise
In 1954 Ray Kroc was a salesman for a company that made milkshake mixers. He noticed that the McDonald brothers had bought eight of the company’s mixers for their restaurant. Believing that, if he could persuade the McDonalds to open more restaurants, he would be able put eight mixers in each of them, he paid them a visit. Again, reports differ about what happened when he talked to the McDonalds. Some believe that he presented the idea of franchises to Dick and Mac, others argue that franchises already existed, and that Kroc merely managed to talk his way into running the franchising operation. Whichever was the case, the end result was the same, and Ray Kroc managed the franchising of the McDonalds’ restaurant concept.
The organisation of the franchise was this: anyone who wanted to open a McDonald’s restaurant would pay Kroc around a thousand dollars for the honour of doing so, and then 1.9% from the annual takings of the restaurant. He would then pass 0.5% of the takings onto the McDonald brothers, keeping the other 1.4%. Kroc opened his first franchise in Des Plaines, Illinois in 1955. Whether or not this was the first franchise of the McDonald’s restaurant, it was definitely the first opening of the McDonald’s Corporation.
The Buy Out
By 1961 Ray Kroc was running the whole show. The only thing the McDonald brothers did was run their one restaurant, and receive their 0.5% from the larger company. The greater expansion of the McDonald’s brand was not something they were really interested in. Ray Kroc, on the other hand, was. He wanted to put a McDonald’s restaurant in every state in America – which he would eventually do, and much more. He wanted to created a Hamburger University where potential restaurant managers could be taught how to manage a McDonald’s restaurant2. He measured every product, weighed all the ingredients, and tasted burgers in every outlet to ensure that precisely the same food was served in every McDonald’s restaurant. But Dick and Mac McDonald were happy as they were, and had no concern for the company Kroc had formed from their restaurant. So Kroc offered to buy them out, which he did at a cost of 2.7 million dollars. It is estimated that if the McDonald’s had continued to receive their 0.5% it would have been worth around two hundred million dollars by the year 2000.
The Clown
In the early 1960s, Kroc decided that the chain could make more money if it appealed to children, and so the company sponsored a kids’ TV show called Bozo the Clown. When that show got cancelled in 1963, the actor that played Bozo, Willard Scott, was hired to appear in three adverts as the McDonald’s restaurants new mascot: Ronald McDonald. Though the adverts were a success, Willard was less so, and appeared in no more adverts after the first three. But the character was established, and many other actors have donned the wig since.
The Expansion
The McDonald’s chain continued to grow. The Big Mac was created in 1968. Having covered the States, the franchise expanded overseas, with the first restaurant opening in Australia in 1971. The Egg McMuffin (the first breakfast product from McDonald’s) was invented in 1973. The three thousandth restaurant of the chain, the first in Britain, was opened in London in 1974. 1979 saw the creation of the Happy Meal, which continues to sell well to children, and adults who want the promotional toys, to this day. A restaurant was opened in Russia, and hailed as an emblem of the new friendship between the two superpowers, in 1990.
The Charity
The McDonald’s Corporation’s charitable efforts started in 1974, when the first Ronald McDonald House was opened in Philadelphia. It was originally the brainchild of Fred Hill, a member of the Philadelphia Eagles American football team. The house is a place for parents of severely ill children, who have had to travel a distance, to stay while their child is being treated at the nearby hospital. Since then, Ronald McDonald Houses have been established in several countries, and the Ronald McDonald Houses Charity has funded efforts to help children around the globe. It also provides scholarships for under-privileged students from ethnic minorities.
The Problems
The McDonald’s chain has not been without its problems. There was the famous McLibel case – the longest running libel case in British legal history. And Jose Bove dismantled a restaurant in France, in order to make a point about globalisation, of which McDonald’s has become a prominent symbol. Also the discovery that some beef products were used in the preparation of their french fries, which resulted in the company paying compensation of 10 million dollars to Hindus, sikhs, and vegetarians. There have been various criticisms of the McDonald’s Corporation, ranging from the source of their meat, to the treatment of workers in the restaurants, the fact the RMHC scholarships are not available to Native Americans, and some concerns about the healthiness of their food. There is also the occasional accusation that in order to keep all the cattle for the hamburgers, McDonald’s has to tear down vast chunks of rain forest; however, McDonald’s insist that all their produce is sourced locally, and that there is not a single massive herd that would require the removal of rainforests.
The Future
McDonald’s has, so far, weathered all of these problems, and continued to expand into more and more countries. No doubt, barring any major set-backs, the McDonald’s Corporation will continue to grow, finding ever more remote locations to place franchises. Only time will tell if they continue to adhere to Ray Kroc’s four guiding principles of quality, service, cleanliness and value.
© BBC UK http://www.bbc.co.uk/dna/h2g2/A3816740
