February 12, 2007

McDonalds

And the men behind the brand are...
Maurice McDonald and Richard McDonald

By 1954 Ray Kroc was 52 years old. He had finally erased years of debt and struggle by selling Multimixers for milk shakes. He had even achieved a modest prosperity, buying a home in Arlington Heights, Illinois, one of Chicago's poshest suburbs.

One day Kroc received an order for eight Multimixers from a hamburger stand in San Bernadino, California. What was this? Each Multimixer had a capacity for six milkshakes. Kroc wanted to see for himself an operation that needed to make 48 milkshakes at one time.

The McDonald’s hamburger stand was run by Maurice "Mac" McDonald and his brother Richard. They had come to California from New Hampshire in 1928 to work in movies, a calling particularly ill-suited to their dour personalities.
The McDonalds wound up managing a movie theater in Glendora instead.

They sold the theater in 1940 to open a hamburger stand in Pasadena.
For eight years the McDonalds worked out their ideas for a self-service food operation, mostly to eliminate the groups of teenagers that hung around the restaurant. On December 12, 1948 they were ready to test their ideas at a new location in San Bernadino.

San Bernadino, 55 miles east of Los Angeles, was the terminus for famed
Route 66. The town was in the center of post-war prosperity and the exploding automobile mentality. C-rations from World War II had also inoculated less discerning American diners with a homogenized diet.

The McDonald brothers devised an ideal food service operation for the new times. They sliced the menu to only four items: a hamburger with condiments already added that they sold for 15¢, crisp french fries warmed with innovative infrared heat lamps, soft drinks and a 12-ounce milk shake.

Everything the McDonalds did emphasized value, efficiency and speed.
There were no plates, no dishes, no condiments. The brothers were frugal and obsessed with cleanliness. Every part of their restaurant sparkled.
When Ray Kroc arrived with his Multimixers he was astounded:
"They had people standing in line clamoring for hamburgers.
I figured that if every McDonald hamburger place had eight Multimixers,
I would get rich."

Kroc was not the first to be impressed by the McDonalds' operation.
The brothers had cautiously sold six franchises in California but had no interest in growing larger. "More stores, more problems," they told Kroc. They pointed to a nearby hill where Mac, a bachelor, and Dick lived. Their houses and three Cadillacs, one for Dick's wife, were all the McDonalds needed.

The brothers were conservative and suspicious of quick money. Only months before Kroc arrived in 1954 they had turned down another big chain offer.
Neither was interested in Kroc's talk of nationwide franchises. Kroc persisted. Finally he left San Bernadino with a 99-year contract to represent McDonalds exclusively.

The arrangement would not last nearly that long. The taciturn brothers increasingly imposed restrictions on the franchises that Kroc found totally unacceptable. In 1960 he offered $500,000 for everything - trademarks,
the Golden Arches, the name. Dick and Mac countered with $2,700,000 - a figure they had arrived at that would yield each of them a million dollars after taxes.

Kroc was flabbergasted. The only financing he could obtain would eventually cost him $14,000,000 to buy out the McDonalds, which, of course, was still a bargain. The brothers had one more surprise as the final papers were signed - they intended to keep their cherished San Bernadino store.

Kroc did not want to lose the money-churning flagship store but wasn't about to blow the deal over it. Rather he built a gleaming new restaurant directly across the street. It was an exact replica of the brothers' restaurant which they had to re-name "Big M." Soon Mac and Dick McDonald were out of business.

The brothers travelled and returned to Bedford, New Hampshire where they lived out their lives in obscurity as their name became the most famous cultural icon in America.

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