Saturday, December 13, 2014

Ray Kroc and MacDonald

McDonald’s was founded by Ray Kroc, one of the pioneers of the modern franchise organization format, in 1955. Raymond Albert Kroc was born in Oak Park, Illinois on October 5, 1902. He grew up with a younger brother and sister.

Ray was good at selling things. He ran a lemonade stand in front of his house. Later, Ray worked in a grocery store and at a soda fountain. After a variety of odd jobs, he had settled on selling Lily paper cups.

In 1939, Kroc made a big decision and started Malt-A-Mixer Company. He began selling Multi-mixers to ice-cream stands and other restaurants. He also sold Multi-mixers to many fast food franchisees, including Dairy Queen and Tastee Freez.

In the early 1950s, increased competition had reduced the sales of Multi-mixers and Kroc needed new outlets. Kroc seen advertisements promoting McDonald’s franchises and was surprised to find that the McDonald brothers had purchased eight of his company’s Multi-mixers. The restaurant, McDonald Brothers Burger Bar Drive-In, operated by Maurice and Richard McDonald, had developed the concept of the assembly-line hamburger with French fries.

There was also a large sign in front of the restaurant displaying two golden arches.
It was entrepreneurial love at first sight - and Kroc immediately foresaw a glowing future for the chain. He persuaded the brothers to sell him the right to license the restaurant and recognized early that site election would be key in spreading the chain across the nation.

In 1955, Kroc created McDonalds’ System, Inc and on April 15, 1955, Kroc opened his first McDonald’s in Des Plaines, Illinois.

By the end of 1957, there were thirty-seven McDonalds. Two years later, the total had reached over one hundred.

Kroc was extremely successful in establishing the chain, but despite this success, Kroc went through numerous legal and personal disagreements with the McDonald brothers along the way.

Kroc finally solved the impasse with the McDonalds by buying them out, for $2.7 million and astronomical sum in 1961. He immediately began an effort to modernize and publicize the establishment, launching what has been described as the most expensive and aggressive ad campaign in American corporate history.
Ray Kroc and MacDonald

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