Ray Kroc building McDonalds into a great fast food chain. Bought it from Maurice and Richard McDonald.

The Origins of McDonalds with Ray Kroc

If you were to ask anyone on the street who started McDonalds, the iconic fast food chain, they would probably say someone with the last name McDonald. There isn’t a close chance they would say the name “Ray Kroc.” 

Ray Kroc may have taken McDonald’s to it’s extraordinary heights but it was brothers Richard and Maurice McDonald who truly were the fast food restaurant founders.

1954, at the age of 52, Kroc was making his way around the country as a struggling Prince Castle Multimixer salesman when he came across the McDonald’s hamburger shop owned by Mauriec and Richard McDonald. 

At the time, the restaurant was only serving hamburgers, french fries, soft drinks, and milkshakes. The McDonalds brothers became Ray Kroc’s best customers when they bought several of his mixer machines from his business.

Ray Kroc got curious about the brothers and why they were buying so many milkshake machines. He investigated the business and fell in love with their tight knit operation. 

Kroc believed with such a great product and a repeatable system on running a fast food business that the brothers should expand their business throughout the country. Kroc convinced the McDonald brothers into becoming their national agent and began franchising their business.

6 years later, Kroc bought out the brothers for a measly $2.7 million. He formed the McDonald’s Corporation and by 1965 there were more than 700 locations across the United States. 

Kroc reinvigorated McDonalds with an innovative franchising model of only granting a franchisee with the right to only one store location. This allowed Kroc to retain the ability to exert control over the franchise and it’s strict policy to excellent quality in food and operations.

Kroc grew the business and expanded it to 31,000 sites in 119 countries around the world. Kroc was an innovator in transforming fast food into a repeatable process that can be learned by anyone.  

Kroc was at the end of his career and had nothing prosperous on the horizon for his future. Everything was looking bleak. Kroc had a grind it out mentality and a strong will to achieve success by any means necessary. He didn’t let his age or circumstances get in the way of him achieving the big time.

One of his legendary quotes:

"Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent."

Reflection: You’ve got to feel bad for the McDonald’s brothers. They worked so hard on their restaurant and only got $2.7 million dollars for it. The brothers negotiated with Kroc to have a % percentage of the sales in perpetuity but the deal was never written down on paper. The brothers never saw a dime after they received their $2.7 million from Kroc. In business you have to be shrewd, but do you think he took it too far? Do you think he knew McDonalds would get this big?

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