McDonald – I’m lovin’ it.
I just happened to see a new McDonald outlet coming up at Kothrud. I wonder how they manage to capture such strategic spots right in the heart of the city or in the newly developing suburbs. Whatever may be the tricks they might use to own/ lease those places; it surely turns out to be a big crowd puller. Especially, amongst the college going students and other young people, the McDonald Outlet becomes a favourite rendezvous point. If there is anything in the Food industry that is as American as Coke, it’s McDonald.
Richard and Morris McDonald – better known as Dick and Mac were born in 1910, in New Hampshire. Their father was a foreman in a Shoes factory. McDonald family was no exception to the Great Depression, soon resulting in McDonald Sr. losing his job along with thousands others.
Dick and Mac moved to Hollywood to try their luck at Cinema. But they were given some paltry jobs of Spot boys etc. They even made a futile attempt to run a theater in Glenn View.
Depressed, they finally decided to run a Hot Dog stand named Airdome in Arcadia, California. Even though, the Airdome wasn’t like a typical fashionable hotel, it became quite popular. Both the brothers were very particular about the cleanliness and quality of the food items. And these were the basic ingredients for the recipe of success. The secret behind their popularity was in the selected items. The menu consisted of 25 odd food items, with Hamburger costing just 15 Cents. Paper plates and plastic cups were used instead of traditional steel accessories. This helped in maintaining clean environment and cutting the unnecessary costs of using and cleaning steel amenities. In short, the philosophy was “KISS – Keep It Simple, Stupid”! McDonald brothers effectively used the “Assembly Line” technique in cooking. As soon as the customer places his order, it would be relayed to the first cook who would quickly fry the meat strip, in the meantime, other cook would butter the bread and the third cook would put the meat strip in the bread and by the time, the customer gets out of the queue, he would get his order delivered neatly decorated in clean plates!
With the increasing popularity, McDonald Brothers moved the Airdome to a 600 sq. feet building in San Bernardino, California. This was the first McDonald’s. McDonald also used effective ways to advertise their success. By 1950, they would proudly put the billboard “Over 1 Million Hamburgers Sold!!!”
In 1953, MacDonald brothers “franchised” McDonald to Neil Fox. Opened in Phoenix, California, this was the second McDonald restaurant. It was, also, the first to use the famous “Golden Arches” which later on became the logo for McDonald. It was soon followed by another outlet in Downey, California. That year, McDonald posted total turnover of $350,000 and a net profit of $100,000!
1954 was the fateful year for McDonald’s. A man who was to be known as “Father of the Fast Food Industry” later made his entry this year. Born in 1902, Ray Kroc grew up to sell restaurant products including paper cups and milk-shake mixers. His trips to coffee shops, diners, and other inexpensive restaurants around the nation gave him deep experience in the industry, and a well-honed sense of what constituted successful management. Yet it was not until he was 52 years old that he had the idea that would transform the existing franchise fast food industry. He became fascinated by the McDonald Restaurants who had placed a single order for 40 Milk Shake mixers with him. The simplicity of operations, absence of the wait staff and utensils and the assembly line for hamburgers really took him by pleasant surprise.
Kroc was experienced enough to recognize the potential of McDonald Brothers. He soon offered them a deal to buy McDonald’s and start their franchise business all over the nation. McDonald brothers quoted a price of $1 Million each. Kroc was infuriated with the price quoted by the brothers because he didn’t have enough money to close the deal.
This is where another character - Harry J. Sonneborn made his way. He opened a “Franchise Reality Corporation” who would buy vantage places in the cities and sell/lease them to the McDonald Franchise. This explains how McDonald manages to capture key places. The activities of Franchise Reality Corporation resulted in McDonald acquiring valuable real estates and at the same time, rents by leasing out these spots to the franchisees.
After much debating with the McDonald brothers, Kroc bought the business, including the name and the now famous golden arches logo for $2.7 million. Finally, the first McDonald's franchise under Kroc's management opened in his home state of Illinois in 1955. Ray Kroc registered "McDonald's Systems, Inc." as a legal organization for his planned franchises. The company's literature usually refers to this date as the "beginning" of the company, then already 15 years old. The company still refers to this restaurant as "McDonald’s #1"!
Kroc introduced strict processes and norms to be followed by all the franchisees. Anyone who would not conform to these norms would lose his franchisee. Some of the rules were like the meat strip should contain 19% fats and should weigh 1.6 Ounce. A single pound of meat should accommodate only 10 such strips. The burger’s diameter should be 3.875 Inches and should have 178 sesames! Similar processes were followed in preparing French fries like the colour of the fries after frying, the temperature of the boiling oil, time to fry the cut potatoes and even the air required to dry the potatoes…everything was detailed and followed religiously! So much for the processes…
In early 60’s, a franchisee sponsored a show called “Bozo’s Circus”. The main character of Bozo was played by Willard Scott who was later on hired by McDonald to portray the company mascot “Ronald McDonald”
In 1967, the company went global with opening a McDonald’s in British Columbia – first branch outside US.
The 70’s saw McDonald’s opening new avenues for success in all the continents across the globe. The company stood as a symbol of American Culture. But at the same time, it faced a lot of opposition for the same reason. Many countries saw it as an invasion of American culture and the company was targeted by various movements and political powers. To value the local systems, McDonald was prompt to change their menu a little, to suit the local choice. The Veg. Burger and McAaloo Tikki introduced in India are one such good examples of McDonald’s flexibility.
In 1965, the company had 1000 outlets – the year when it went public. The number soon doubled in 1971 and by 1984, McDonald had 8000 branches all over the world.
Today, McDonald's brand operates in 122 countries around the globe. 30,000 McDonald’s serve 51 million customers each day. US, alone, has around 12,000 McDonalds. More than 70% of McDonald's restaurants are run by independent local businesspeople. As on 2004, the company’s turnover was $19.07 billion, with net income at $2.75 Billion!
Ray Kroc died in 1984. Harry J. Sonneborn became the CFO of the company, before resigning in 1967. McDonald brothers were happy with their $2.7 Million. Had the brothers maintained their original agreement, which granted them 0.5% of the chain's annual revenues, they would have been adding a $100 million per year! But then, they weren’t quite after money. However, both of them used to buy a Cadillac every year, without fault.
There were a lot of similarities between McDonald Brothers and the Wright brothers, apart from being the pioneers in their respective industries. Both pairs remained unmarried. Both of them weren’t hungry for money even when they could have made a lot. Both pairs had the passion for perfection. They only had a single difference: Whilst Wright brothers made the first human flight, McDonald Brothers used to get scared to death with flying! J
Regards,
Abhishek
Richard and Morris McDonald – better known as Dick and Mac were born in 1910, in New Hampshire. Their father was a foreman in a Shoes factory. McDonald family was no exception to the Great Depression, soon resulting in McDonald Sr. losing his job along with thousands others.
Dick and Mac moved to Hollywood to try their luck at Cinema. But they were given some paltry jobs of Spot boys etc. They even made a futile attempt to run a theater in Glenn View.
Depressed, they finally decided to run a Hot Dog stand named Airdome in Arcadia, California. Even though, the Airdome wasn’t like a typical fashionable hotel, it became quite popular. Both the brothers were very particular about the cleanliness and quality of the food items. And these were the basic ingredients for the recipe of success. The secret behind their popularity was in the selected items. The menu consisted of 25 odd food items, with Hamburger costing just 15 Cents. Paper plates and plastic cups were used instead of traditional steel accessories. This helped in maintaining clean environment and cutting the unnecessary costs of using and cleaning steel amenities. In short, the philosophy was “KISS – Keep It Simple, Stupid”! McDonald brothers effectively used the “Assembly Line” technique in cooking. As soon as the customer places his order, it would be relayed to the first cook who would quickly fry the meat strip, in the meantime, other cook would butter the bread and the third cook would put the meat strip in the bread and by the time, the customer gets out of the queue, he would get his order delivered neatly decorated in clean plates!
With the increasing popularity, McDonald Brothers moved the Airdome to a 600 sq. feet building in San Bernardino, California. This was the first McDonald’s. McDonald also used effective ways to advertise their success. By 1950, they would proudly put the billboard “Over 1 Million Hamburgers Sold!!!”
In 1953, MacDonald brothers “franchised” McDonald to Neil Fox. Opened in Phoenix, California, this was the second McDonald restaurant. It was, also, the first to use the famous “Golden Arches” which later on became the logo for McDonald. It was soon followed by another outlet in Downey, California. That year, McDonald posted total turnover of $350,000 and a net profit of $100,000!
1954 was the fateful year for McDonald’s. A man who was to be known as “Father of the Fast Food Industry” later made his entry this year. Born in 1902, Ray Kroc grew up to sell restaurant products including paper cups and milk-shake mixers. His trips to coffee shops, diners, and other inexpensive restaurants around the nation gave him deep experience in the industry, and a well-honed sense of what constituted successful management. Yet it was not until he was 52 years old that he had the idea that would transform the existing franchise fast food industry. He became fascinated by the McDonald Restaurants who had placed a single order for 40 Milk Shake mixers with him. The simplicity of operations, absence of the wait staff and utensils and the assembly line for hamburgers really took him by pleasant surprise.
Kroc was experienced enough to recognize the potential of McDonald Brothers. He soon offered them a deal to buy McDonald’s and start their franchise business all over the nation. McDonald brothers quoted a price of $1 Million each. Kroc was infuriated with the price quoted by the brothers because he didn’t have enough money to close the deal.
This is where another character - Harry J. Sonneborn made his way. He opened a “Franchise Reality Corporation” who would buy vantage places in the cities and sell/lease them to the McDonald Franchise. This explains how McDonald manages to capture key places. The activities of Franchise Reality Corporation resulted in McDonald acquiring valuable real estates and at the same time, rents by leasing out these spots to the franchisees.
After much debating with the McDonald brothers, Kroc bought the business, including the name and the now famous golden arches logo for $2.7 million. Finally, the first McDonald's franchise under Kroc's management opened in his home state of Illinois in 1955. Ray Kroc registered "McDonald's Systems, Inc." as a legal organization for his planned franchises. The company's literature usually refers to this date as the "beginning" of the company, then already 15 years old. The company still refers to this restaurant as "McDonald’s #1"!
Kroc introduced strict processes and norms to be followed by all the franchisees. Anyone who would not conform to these norms would lose his franchisee. Some of the rules were like the meat strip should contain 19% fats and should weigh 1.6 Ounce. A single pound of meat should accommodate only 10 such strips. The burger’s diameter should be 3.875 Inches and should have 178 sesames! Similar processes were followed in preparing French fries like the colour of the fries after frying, the temperature of the boiling oil, time to fry the cut potatoes and even the air required to dry the potatoes…everything was detailed and followed religiously! So much for the processes…
In early 60’s, a franchisee sponsored a show called “Bozo’s Circus”. The main character of Bozo was played by Willard Scott who was later on hired by McDonald to portray the company mascot “Ronald McDonald”
In 1967, the company went global with opening a McDonald’s in British Columbia – first branch outside US.
The 70’s saw McDonald’s opening new avenues for success in all the continents across the globe. The company stood as a symbol of American Culture. But at the same time, it faced a lot of opposition for the same reason. Many countries saw it as an invasion of American culture and the company was targeted by various movements and political powers. To value the local systems, McDonald was prompt to change their menu a little, to suit the local choice. The Veg. Burger and McAaloo Tikki introduced in India are one such good examples of McDonald’s flexibility.
In 1965, the company had 1000 outlets – the year when it went public. The number soon doubled in 1971 and by 1984, McDonald had 8000 branches all over the world.
Today, McDonald's brand operates in 122 countries around the globe. 30,000 McDonald’s serve 51 million customers each day. US, alone, has around 12,000 McDonalds. More than 70% of McDonald's restaurants are run by independent local businesspeople. As on 2004, the company’s turnover was $19.07 billion, with net income at $2.75 Billion!
Ray Kroc died in 1984. Harry J. Sonneborn became the CFO of the company, before resigning in 1967. McDonald brothers were happy with their $2.7 Million. Had the brothers maintained their original agreement, which granted them 0.5% of the chain's annual revenues, they would have been adding a $100 million per year! But then, they weren’t quite after money. However, both of them used to buy a Cadillac every year, without fault.
There were a lot of similarities between McDonald Brothers and the Wright brothers, apart from being the pioneers in their respective industries. Both pairs remained unmarried. Both of them weren’t hungry for money even when they could have made a lot. Both pairs had the passion for perfection. They only had a single difference: Whilst Wright brothers made the first human flight, McDonald Brothers used to get scared to death with flying! J
Regards,
Abhishek
posted by Gyan for the Day! | 7:12 pm
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