Seen a “Big M” somewhere, or have you seen a red-headed joker statue sitting outside a restaurant or ever heard about the famous tagline, “I’m Lovin’ It”. Yeah, you guessed it correctly, I’m talking about the famous fast food restaurant, McDonald’s. Do you know, the franchises of McDonald’s were raked up in 1961? Yes, the company’s background story is dramatic and had struggling past behind its success. The company went through various ups and downs to fulfill the dreams of two brothers that of becoming millionaires by the time they turn 50.
The life of Two Brothers
During the great depression, 1930’s, the two brothers, Maurice McDonald and Richard McDonald, fought very hard with their fate to stay on the line of their dreams. They saw how their father earned working at a shoe store. This caused urgency in them for earning money and left out to work at Columbia Movie Studios, where they got covered in sweat to pay the rent. But their poor salary wasn’t enough to make their living, so in 1930, they bought a theater, 20 miles east of Los Angeles. Viewers coming up to the theater used to go out for snacks or drinks, to prevent this outgoing money, the brothers installed a mini food refreshment station at the corner of the movie theater and were surprised to see its effects.
During their Business Years
Due to the recession years, not much profit was made hence they had to sell their theater in 1937 and wanted to shift their business into food department. They borrowed an open-air food stand, naming it as “Dimer” and the stall was established just outside the airport which drew traffics from all around making profits on a high scale. The profits earned made them able to shift their parents from New Hampshire to open up more stands near the airport. Later they took a loan of $5,000 from a lender and moved further east to an established trading hub about 60 miles away from Los Angeles, where they reincarnated their name to “McDonald’s Bar-B-Que.”
One of the most important factors about this restaurants compared to others at that time was their carhops, a fleet of young attractive women dressed in such attire that attracted the customers to buy food and deliver the food directly to the window panes of the automobiles. McDonald’s survived the age of World War II and now with the production of Henry Ford’s automobiles, the rate of profits earned by McDonald’s Bar-B-Que increased because eating a food that is directly served at your window of the car is a charming feeling in those days and hassle free too. With 20 carhops around and parking space for 125 vehicles in the parking lot, the business provided a steady flow of money topped up to $100,000.
The Problems in the Business
In 1948, the biggest problem faced by the brothers was the duration for preparing hamburgers, fries, and shakes, slow speed of production, how to gain maximum profits and how to distinguish themselves from other restaurants. These problems were analyzed by the brothers and the most optimum path was searched which will help them to grow their business. They identified the menu item which was most served or bought by the customers.
Richard McDonald also known as Dick, got an idea and installed a mechanical device which on a push of a button spills precise amount of ketchup or mustard. The whole output of the kitchen layout was changed and formulated in such a way that the time consumed to produce hamburgers, shakes or fries is reduced significantly and the output result produced is far greater in number as compared to earlier production. This added more space for refrigerators in the restaurants for storing more products, multimixers were now used to churn out milkshakes. The grilling of meats, frying of fries and dispatch of the meal to the customers now was done more efficiently and speedy service was performed.
They simplified the menu items to just nine items and those were hamburgers, cheeseburgers, milk shakes, coffee, potato chips, pie, and three soft drinks with different flavors. The business now wanted to conserve their earnings and so dishwashers were removed so that there was no cost for washing and wrapping system prevailed in the business reducing the use of plates, cups, and spoons. Carhops were also removed out of the pictures which caused a huge uproar because now the customers have to come out of their vehicles to take their order. Now the new staffs were all males, wore neat and tidy white uniforms because brothers thought that women employees are a distraction for the customers.
The Growth of Business
Although the business has now become stable, but the growth wasn’t stabilized yet and the business faced many problems as carhops were removed and the menu was shortened to 9 items, public people were disappointed in the service. But the business started flourishing slowly due to a high production rate of about one million hamburgers and 160 tons of French fries a year and the profit soon rose to $325,000 annually. Now there are three Cadillacs to the brothers, including one for Mac’s wife. Dick had yet to marry.
The business was growing at its full pace with giving huge profits and becoming famous rapidly. By the time a milkshake salesman, Ray Kroc, came to San Bernardino in 1954 to see the mechanism behind such growth, the brothers have already established few franchises in California and Arizona. Ray Kroc was surprised to see the working behind the input of products and foods. He saw the high potentials in this business and the extent up to which the company can grow and give huge lumps of money in future.
So, in 1955, Ray bought the rights to the franchises of the restaurants across the country and finally founded the company along with Richard McDonald, on 15 April 1955 in Des Plaines Illinois. Although the company went by smoothly but some tension and aggression grew between the founders as they have different philosophies about running the business.
Ray Kroc: Revolutionizing McDonald’s
This tension grew extravagantly on daily basis and finally in 1961, Kroc purchased the company for $2.7 million and the company revolutionized under his possession. The agreement was done in such manner that the original store would remain in the brother’s possession, which left Kroc with unpleasant mood and the brothers changed the store’s name to “Big M”. In this annoyance, Ray opened a McDonald’s store in front of the shop that blocked their business and they slowly faded away with time and in 1970 they were out of business. The original store got transformed into an opera building and later became a museum of McDonald’s artifacts inside.
Since the introduction of Ray Kroc, the company slowly rose to a new level and through his vision, hard work, persistence and leadership qualities he converted that branch in one location to thousands of branches in every corner of the world. He made McDonald’s avail to everyone in the world and had served over 100 billion hamburgers. Ray also wrote an autobiography in 1977, “Grinding It Out”.
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