McDonald’s is the name which requires no introduction. McDonald’s is currently the King of food industry throughout the world. Let’s have a look at its success story.
McDonald’s was established by brothers Richard and Maurice McDonald in the early 1940s. At that time, McD was just a simple family restaurant who prepared easy and quick hamburgers. McDonald’s became successful as people did not like standing in queues for a long time at other restaurants and so, started visiting McDonald’s to have hamburgers served in almost no time and at cheap rates.
Slowly, McDonald’s became a successful brand and popular name in entire California. By 1954, they had licensed ten other drive-ins, many of which were poorly managed and had no consistent system.
A businessman Ray Kroc was traveling in California and was selling milkshake machines. Once he saw a place where there were a lot of people and parking was full. He stopped to see what was going on and discovered that this restaurant was selling excellent hamburgers for just fifteen cents. He discovered that out of all the restaurants he visited, McDonald’s had the best merchandising. He saw a great opportunity in investing in its franchise. Earlier, McDonald’s politely refused but agreed after many efforts.
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Now, Ray Kroc was helping the McDonald brothers expanding their business opportunities in Southern California.
“Visions of McDonald’s restaurants dotting crossroads all over the country paraded through my brain” Kroc later recalled.
Now, Ray Kroc was helping the McDonald brothers expanding their business opportunities in Southern California.
“Visions of McDonald’s restaurants dotting crossroads all over the country paraded through my brain” Kroc later recalled.
After all the hard work for years, Kroc was only getting 1.9% of revenue. Kroc was unhappy about his agreement with the McDonald brothers. In 1961, he asked them to name their price and bought the company and the name for $2.7 million.
They filed for a trademark in 1961, describing itself as a ‘drive through restaurant’ and introduced its mascot – Ronald McDonald. All the new franchise owners were asked to spend five-hundred hours working in another location first and to attend Hamburger U, the company’s training facility for managers and operators.
McDonald’s Research and Development Laboratory was established to test foods produced in McDonald’s as they did not want to risk the quality to provide cheap food. Kroc stepped down as CEO in 1964.
In Kroc’s autobiography “Grinding it Out,” he succinctly describes some of the reasons why McDonald’s works so well with both customers and franchisees:
“We wanted to build a restaurant system that would be known for food of consistently high quality and uniform methods of preparation. Our aim, of course, was to ensure repeat business based on the system’s reputation rather than on the quality of a single store or operator. This would require a continuing program of educating and assisting operators and a constant review of their performance. . . . the key to uniformity would be in our ability to provide techniques of preparation that operators would accept because they were superior to methods they could dream up for themselves.”
“We wanted to build a restaurant system that would be known for food of consistently high quality and uniform methods of preparation. Our aim, of course, was to ensure repeat business based on the system’s reputation rather than on the quality of a single store or operator. This would require a continuing program of educating and assisting operators and a constant review of their performance. . . . the key to uniformity would be in our ability to provide techniques of preparation that operators would accept because they were superior to methods they could dream up for themselves.”
After Kroc’s death in 1984, the company had thousands of franchise and slowly passed by Subway. According to a survey, McDonald’s served so much of food in 2008 that it can be said that each and every person on the globe had visited McDonald’s thrice in a year.
Today, McDonald’s is world’s largest food chain with approx. 38,000 locations and 3,75,000 employees. From simple hamburgers in the 1950s, today McDonald’s serves Hamburgers, chicken, french fries, soft drinks, milkshakes, salads, desserts, coffee and breakfast wraps.