Working with Walt Disney
Raymond Albert Kroc, was an American businessman who purchased the fast food company McDonald's in 1961 from the brothers Richard and Maurice McDonald's for $2.7 million, eventually opening 7,500 outlets in the United States and 31 other countries and territories before his death in 1984. During World War I, Kroc worked as a Red Cross ambulance driver alongside Walter Elias Disney, the american animator, film producer and entrepreneur who would later found and operate The Walt Disney Company a few years later. At the peak of the Great Depression, Kroc worked a variety of jobs including selling properties as a real estate agent in Florida, playing keyboard in live bands, selling paper cups, and becoming a milkshake mixer salesman for the food service equipment manufacturer Prince Castle. In 1954, Kroc visited Richard and Maurice McDonald after the brothers purchased eight of his multi-mixers for their McDonald's restaurant in San Bernardino, California.
The Speedee Service System
Kroc was impressed and stunned by the effectiveness of the brothers' Speedee Service System for hamburger preparation, producing only a limited menu of burgers, fries and beverages, allowing them to focus on quality and quick service. After seeing an unlimited number of opportunities for the restaurant, Kroc franchised and eventually founded the McDonald's System Inc. one year after, and bought the exclusive rights to the McDonald's name and operating system, six years later. Kroc has been credited with a number of innovative changes in the food franchise model, implementing uniformity in service and quality among all of the McDonald's locations which he specifically wanted to be established in suburban areas instead of urban or downtown areas. He also implemented a rule of having a standardized content, where restaurants were not allowed to deviate from specifications in any way, and insisted that every condiment container was to be scraped completely clean, not wasting any food or ingredient in the operation.
Buying McDonald's
In the 1960s, a wave of new fast food restaurants like Burger King, Burger Chef, Arby's and KFC, started to appear with an operation similar to that of the McDonald's Speedee Service System. Kroc wanted to push for a rapid expansion of restaurants all over America, but was disappointed when the brothers themselves wanted to maintain only a small number of food chains. Despite being in a difficult financial situation due to his persistence to pursue an aggressive McDonald's expansion, Ray Kroc obtained funds to buyout the company for $2.7 million, ensuring the brothers received $1 million each after taxes. Kroc operated McDonald's using the assembly line Speedee Service System, ensuring every burger, fries and beverage would taste the same in every branch in America.
The Sonneborn Model
Ray Kroc and his financial advisor Harry Sonneborn, were the first entrepreneurs to upgrade the business model of restaurant franchising, coming up with the idea of buying the land where a McDonald's restaurant would be built, and renting that land to the franchisee. Still remembered today as the Sonneborn Model, this strategy remains to be used by McDonald's, accounting for 35% of the company's global earnings, and contributing to it's real estate holdings estimated to be around $37.7 billion. Kroc appointed Sonneborn as McDonald's first president and Chief Executive Officer in 1959, which led to the opening of hundreds of stores nationwide until Sonneborn's resignation in 1967. In the 2016 film The Founder, Sonneborn was portrayed by actor Benjamin Novak who spoke the famous line "You're not in the burger business; you're in the real estate business."
A Family Friendly Restaurant
Attributes that would somehow sum up Ray Kroc would be relentless, tireless, and ruthless, traits that have been evident by his aggressive business dealings in the early days of McDonald's, initially having a singular focus of opening 1,000 restaurants all over the world. Wherever he saw fit, Kroc bought land to setup the next McDonald's restaurant, and listed potential buyers for that franchise, allowing him to earn more on the real estate side of things, than the food menu. Kroc spent plenty of effort and time to create the ideal McDonald's atmosphere, becoming a huge pioneer in the food service industry instructing staff to be professional and courteous at all times, especially to children, creating an atmosphere that is congenial for family gatherings. In 1973, Ray Kroc received the Golden Plate Award of the American Academy of Achievement and died 9 years later due to heart failure at a hospital in San Diego California.
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