- Ray Crock was a persistent businessman, and the brothers were business owners. This was shown in every aspect of the movie. Ray saw the vision immediately he was always trying to make something out of anything. Ray literally had a skill he knew how to truly profit and capitalize off ideas. Ray was willing to take the risk that others may opt of, he saw an opportunity and didn’t want to miss it at any cost. He built up knowledge of how to operate and officially run franchise. The brothers were creative thinkers, they put their heads together to create a great concept of fast-food businesses. They worked and perfected it until it was successful in their town. However, the brothers were focused on their brand and the CSR behind their brand they wanted to ensure they were providing the best quality products for their consumers. The Brothers had the blueprint of the business, but they lacked the true knowledge of how businesses work. The Brothers were very apprehensive about their business brand and the quality of their work they weren’t so open or quick to taking risky chances.
- I don’t think the brothers should’ve sold to Ray because they didn’t share the same values! Rays mission was to capitalize and make as much money as he could the brothers wanted their own legacy and restaurant that was respected. Ray was willing to toss all the quality out the window for a quick easy way to get a job done. The contract signing was entirely the McDonalds brothers’ idea, they wanted to ensure the safety of their plan. However, there was certain specifications that should’ve been discussed before even taking on or considering the opportunity in the first place. Once changes needed to be made the contract should have been redrafted and then resigned, this step or misstep allowed Ray to “get over” on the brothers legally. The 1% royalty deal in the end should have been entered into the contract and not signed until included. The brothers felt uneasy and still went against their better judgment a decision they lived to regret forever. Ray took a big chance on this idea, even though it wasn’t his he truly trusted the vision the McDonalds brothers had. So much so he got his house appraised just to get the ball rolling, in the end he put a lot of risk into making this Franchise operation run and deserves to see a profit from his investments. Ray Kroc didn’t give the brothers a good deal, the brothers lost their first location the blueprint for their restaurant and even their name! This wasn’t a win on their part at all! They created a whole new era of eating and got nothing out of it. the only location they were able to keep they had to renounce their name and basically start new.
- Franchise could make a profit by running the McDonalds independently. They got the location, the materials, and equipment’s and McDonalds just came in and taught processes and practices and ensure cohesiveness. The franchise would only have to worry about paying out fees to the franchise owners and owner. The Franchise would cut the cost of labor completely by using this new fast-food model, they were able to cut cost. Another way to cut cost was to cut the bill the walk-in freezer generated. Housing all those ice cream crates ate a lot of the operational cost. The introduction of Insta Mix was revolutionary in cutting cost of the franchise owners.
- He pitched! Ray immediately became the franchise agent for the McDonalds brothers. Ray would pitch to a wall if it was buying, he truly believed that someone would listen because, so he never stopped selling his ideas. This mindset that Ray adapted allowed him to grow his capital, because once he had a successful model to display to possible buyers and investors there was absolutely no way someone could resist taking the opportunity of a lifetime. “You don’t build an empire off an 1/15 cut of .15 cent hamburgers, you build off owning the land that the upon which that burger is cooked” Harry J. Sonneborn. Ray quickly found that just being franchise manager for the brothers wasn’t going to cover the cost of the business expanding. The funds he was seeing after the payout was barely enough to break even. There had to be a shift in conditions in order to be able to truly operate as a franchise and continue to grow. To see a true profit and start operating to his full capacity Ray had to enter into the real estate world. Owning the land, the McDonalds operates on would be a game changer. This could and would completely change the name of the how Ray did things. A condition of the franchisee deal would be that they could only lease from Ray and Ray alone in order to open and operate a McDonalds. This provided Ray with a steady up flow stream of income and greater capital for expansion. Another condition would be the overall control over the franchisee – failure to uphold standards and policies would result in a canceled lease. “The Franchise Realty Corporation” Ray created his own franchise company; this took complete control away from the McDonalds owners. This allowed him to operate and open his franchise location however he pleased. He licensed the McDonalds brand this was a BIG MOVE This allowed him to operate under the impression of the brand. This allowed him to continue to franchise and make bigger decisions regarding the business. Once he built the demand for the fast-food chain in the smaller towns and cities, he decided to move the restaurant more developed cities. Demand grew with the stores. Selling these Franchise locations allowed him to gain profits by buying land in prime locations and charging the franchise owners rent on the property plus the fees associated with the franchising process on a whole. The franchise stores operated independently from the local/original location. The goal of the franchise owners was to gain profits in their investments. This meant reducing cost as much as possible. In an effort to reduce cost they changed original ingredients, and processes and even introduced specialty items to the menu to boost profit.
- Up until my college days I LOVED McDonalds, I thought I was so affordable and quick and most importantly convenient. It was everywhere and open literally all the time. I guess my love and constant consumption lead me to really look into their ingredients and practices. I started to investigate the practices of McDonalds and the affects their cutting cost have had on their consumers. It only took short dive into the rabbit hole to decided I wasn’t a fan of McDonalds and the principles at which they displayed. However, to see that this company was founded on the principles they lack today was completely dishearten. This film just confirmed the feelings I had before McDonalds don’t care about the consumer affect all they care about it profits. While I do not support McDonalds, I can’t take away from the brilliance of dominating the market and truly capitalizing off the franchise game
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