Be Like Ray Kroc? Or Not?

Ray Croc with a McDonalds store portrait behind him

Last week I saw the movie “The Founder,” which details which the amazing story of Ray Kroc and the early days of the McDonald’s restaurant chain.

Anyone that loves business and entrepreneurship should see this movie, as it paints in beautiful relief one of the most iconic business success stories of all-time.

It starts with the simple, startling and SO inspirational fact that Ray Kroc – played masterfully in the movie by actor Michael Keaton – first became involved with McDonalds at the ripe, young age of 52!

His life career to that point had been a series of failures and near misses – start-ups gone bust, failed marriages, and then middling success as a milkshake machine salesman, which led to his now so very famous meeting with the McDonald brothers.

Yes, Ray Kroc, contrary to popular belief and perhaps even his own illusions, did not start McDonalds, or conjure up its two most famous “secret sauces” – its assembly line inspired fast food “Speedee Service System” or its evangelically infused “Golden Arches” signage and store design.

These innovations were those of the McDonald brothers – poor, first-generation Irish immigrants that made their way during the Great Depression to California to seek their fortune.

After a failed movie theater, hot dog stand, and drive-in-restaurant, they had their “Eureka” moment, the design, implementation and simple business plan template of the world’s first, true fast-food restaurant – featuring 15 cent hamburgers, 10 cent french fries, and 20 cent milkshakes – and served via walk-up window at the revolutionary speed of just a seconds from order placement to food delivery.

Soon, theirs was by far the most popular restaurant in town, and catching the attention of Ray Kroc when he received an order from them for eight of his milkshake machines – no other restaurant had ever ordered more than one!

Kroc’s curiosity was so piqued that he got in his car and drove 2,000 miles from his Illinois home to Southern California to see for himself how they were doing it.

They quickly struck a deal for Kroc to be the company’s first director of franchising.

Kroc then mortgaged his home and put every penny he had on the line (a lot harder to do at 52 versus 22!), and after many heartaches and setbacks, soon was selling McDonald’s franchises throughout the Midwest at a rate of almost one per week, building a phenomenon the likes of which the restaurant industry had never seen.

And as I watched as the movie portray him overcome one daunting obstacle after another, his salesmanship, never-say die attitude, and messianic enthusiasm in pursuing and evangelizing his dream was…

flat out totally inspirational.

Now here’s where the Ray Kroc story gets complicated.

Almost immediately after signing their deal, Ray and the McDonald’s brothers started to clash.

Over menus, over the look and layout of the restaurants, and most profoundly over what an acceptable rate of growth and risk-taking should be.

The brothers were fundamentally conservative, focused on how the business might provide them a comfortable middle class life and an escape from the poverty of their youth.

Ray Kroc wanted an empire.

And was willing to do whatever was necessary to build one.

It goes without saying that these two world views would clash. Nor was it surprising who won – only the scale of the victory and how it was achieved being shocking and thought-provoking.

In one of the great business heists of all time, Kroc negotiated with the McDonald brothers to pay them a mere $2.7 million for the then 200 unit restaurant chain, along with an “handshake deal” for 1/2% of the companies revenues, into perpetuity.

Ray Kroc never honored that handshake, and instead went on to build McDonalds before his death into a 7,500 store behemoth with locations in 31 countries.

And to a personal net worth in today’s dollars of over $3 Billion.

This is a tale of persistence, of a 52 year old man who had swung and failed too many times in his life to count, finally connecting and with grit and belief hitting it really big in America.

And then the rest of the story, more complex but no less revelatory as to the competing priorities and values of modern business.

And of the different kinds of courage needed to make the hard and business and life offering choices inherent to truly going for it.

All of us need to grapple with these choices in our own way.

The movie “The Founder” condenses those choices into one hour and fifty five minutes of beautifully made cinematic drama.

As an entrepreneur and a middle aged guy, I enjoyed it immensely and think you will too! Go see it!

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