Today’s topic- Did The Mcdonald’s Brothers Get Ripped Off?
The McDonald Brothers came into the food business in April 1940 in San Bernardino, California. The brothers go by the name Maurice Nicknamed “Mac” and Richard McDonald. Initially, it operated as a drive-in that offered a variety of services.
But by 1948, the brothers decided to change their business strategy. They renovated their restaurant, and within three months, Mcdonald’s became a restaurant that produces huge quantities of food at an affordable price.
So, Did The Mcdonald’s Brothers Get Ripped Off?
The McDonald Brothers got 1% of the profits as agreed. 0.5% went to the brothers, and the remaining 0.5% went to Mcdonald’s corporation. According to the movie “ The Founder,” the Mcdonald’s brothers did get ripped off, but you have to keep in mind that it is a drama film and not a documentary, hence the discrepancies. In this article, ‘Did The Mcdonald’s Brothers Get Ripped Off?’,
What we will discuss
- The True Story of the McDonald brothers
- Lessons learned from the Mcdonald brothers and Ray
The True Story of the Mcdonald Brothers
After Mac and Dick changed their business strategy in 1948, they altered their menu, too. Their strategy was to limit the menu that consisted of hamburgers, potato chips, which later changed to french fries, pie, and drinks. They also created an efficient service system known as Speedee. With the service system, the restaurant did not need waiters or waitresses. What it had instead were self-service counters which made the customer service very quick, with the food being cooked ahead of time and then warmed under heat lamps.
With this innovation, the brothers could now sell their hamburgers at 15 cents, while other restaurants selling them at 30 cents. Mcdonald’s grew tremendously, which led to the brothers starting a franchise program.
Kroc was a salesperson at a company that sold multimixers to the two brothers. He was curious to know more about the restaurant, so he decided to visit the brothers in 1954. He was impressed by how much the company had grown. Kroc later found out that the Brothers were looking for a new franchise agent and he was ready to grab the opportunity. That’s how Kroc started working with Richard and Maurice.
In 1955, Kroc launched Mcdonald’s System, Inc, which later became McDonald’s Corporation, which was launched in Illinois. After six years, he exclusively bought the McDonald brothers out. This includes; the Mcdonald’s name and the operating system.
How Ray Kroc Developed The Mcdonald’s Brand?
After taking full ownership of the Mcdonald’s year 1961 brand, Kroc came up with an exact standard of how the Mcdonalds should be run. From cleaning to food preparation. This was to keep all the franchise operations standardized. It became a program and the name was later changed to Hamburger University. The program is used to train franchisees.
In the long run, he added counter-staff to take the orders from customers. In 1975, Kroc opened the very first walk-through window; this was in Arizona. Earlier, the company had introduced other interesting features. In 1963 they introduced the public face of the company, and he went by the name “Ronald McDonald” Ronald was a clown. Unfortunately, due to the negative perception of clowns that was rising, Ronald was taken down.
In 1968, McDonald’s, a hamburger to its menu known as the “Big Mac”. It did so well that it became the second most sold item on the McDonald’s menu. The company also modified the logo. This logo is one of the world’s famous logos and it has been used for years now.
All the changes accelerated the growth of McDonald’s restaurants to almost 1000 stores. By 1965, they were trading publicly. The chain continued to expand rapidly in the United States and internationally. The first international locations were Canada, Richmond, and British Columbia. The growth became so massive in the ’90s that it was said a new restaurant was opened every 5 hours. This explains why over 30,000 Mcdonald’s restaurants were operating in over 110 countries.
Despite the tremendous growth in McDonald’s, there was also a high level of criticism.
In early 2000, Mcdonald faced various lawsuits in the states due to a perceived notion that it was the cause of an increased number in obesity globally. Although the plaintiffs’ did not prevail, a documentary on a filmmaker eating fast food only from Mcdonalds, proved that indeed, the food at McDonald’s did cause health problems.
McDonald’s did respond to the criticism and added healthier options (vegan hamburgers) to their menu. Later in 2018, McDonald announced that they had stopped using preservatives on the hamburgers, and they reduced the hamburger size.
McDonald’s was also called out for paying low wages to their employees. The low-paying jobs ended up being added to the Merriam-Webster Dictionary as McJob. Lastly, Mcdonald’s was accused of posing a threat to the environment from the greenhouse gas emission from their thousands of restaurants. They responded by starting an initiative to reduce greenhouse gas emissions. They also launched a program to reduce the use of recycled bags, utensils, and other renewable items for their packaging.
8 Lessons learned from the Mcdonald brothers and Ray Kroc
- The brothers launched a scholarship scheme specifically for Hispanic students. They also launched an initiative to help families who had children with leukemia. The lesson here is to give back to the community when you become successful.
- As an entrepreneur, you have to be resilient. We learn this from Ray Kroc never giving up.
- Being innovative. Ray always found new ways to attract customers by innovation.
- Have the right people surrounding you. Having people, he trusted helped Kroc find the right management team to run the Mcdonald’s franchise. He also had a support system that could swoop in to encourage you during the tough periods in your business. For Kroc, it was his wife.
- Kroc was a very driven man and he had a vision of how far he wanted the restaurant to go.
- Ray Kroc was in his 50’s when he went into business with Richard and Maurice McDonald. At the time, he was just a salesman for a multimixer company. The lesson here is It’s never too late to go for your dreams.
- The Mistake that the McDonald’s brothers made was they cashed out too soon. This may be because the McDonald’s Brothers was already successful even before the interaction with Kroc. They already owned three homes and Cadillacs. They sold the company to Kroc for $2.7 million, which is around $24 million today. The brothers were so convinced that the changes in the system would compromise their ideals hence cashing out.
- Unfortunately, after the sale, Ray McDonald’s started taking credit for the birth of the company. But as of 1991, the company decided to honor both the Mcdonald brothers and Ray Kroc. After all, the brothers did come up with the concept of the company that was later developed by Ray Kroc to be the world’s biggest Food franchise.