- What makes Ray Kroc and the brothers different from each other?
- When comparing the McDonald brothers and Ray Kroc, it becomes clear that some of their major differences lie in their moral compass, ambition, and business approach. The McDonald brothers focus on doing the “right” thing – looking out for the employees, providing quality services and goods, and staying true to their words. Ray Kroc is the opposite – valuing profit over quality all while be exploitive. Though they are both ambitious, the McDonald brothers had enough ambition to follow their dreams but not beyond that. When they became overwhelmed or discouraged, they sized back and focused on their one goal whereas Ray Kroc continued pushing limits in the face of adversity. Lastly – they approach running their businesses completely different. The McDonald brothers focus on maintaining quality and are overly cautious of their practices. In contrast, Ray Kroc takes huge risks – going as far as refinancing his house – in order to achieve his goals.
- Do you think the McDonald’s brothers did the right thing by selling out to Ray Kroc? Did Ray Kroc give the brothers a good deal?
- I think the McDonald brothers did the right thing but not in the right way. I’m sure they were aware of their demise the moment “handshake” deal was brought up. I’m surprised they did not have their own legal counsel present to advise against that. Selling their name made sense since it was clear that Ray Kroc had the upper hand with his expanding franchises and financials – but they could have asked for more. The amount they did settle for was significant for the time and likely allowed them to retire comfortably.
- How did the local store franchisees make money?
- The local store franchisees made money by being given the blue prints, “secret” works, training, and name recognition of the McDonald brand. They were able to invest a lump sum in the beginning to get started and reaped the benefits of owning a restaurant that was already established and well known.
- How did Kroc make money? How was that different than the franchisees, running the local stores?
- Kroc first made money by selling the franchise rights to the entrepreneurs and receiving a percentage of the profits from that location. However, it became clear that this was not entirely sustainable or as profitable as he thought it would be due to the high overhead costs. Kroc then switched to instead owning the land on which the restaurants were built, allowing him to get a steady stream of rental income and regain control of the real estate assets. When he bought he McDonald brothers out, he became sole owner and thus owned stock and shares in the growing business. The franchisees running the local stores only earned money from the profits of their specific location sales, they did not own the stocks or shares of the overall companies.
- Does this film change your view of McDonald’s?
- This film did change my view of McDonald’s – particularly the final scene where Ray Kroc literally stares at himself in a mirror and blatantly lies about the beginnings of the company. He erases the hard work, effort, and ingenuity of the McDonald brothers and gives no acknowledgement to their major contributions. It made me feel less inclined to support McDonald’s – knowing that there are many other mom and pop shops that offer similar if not better food and service.
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What makes Ray Kroc and the brothers different from each other?
There were many differences between Ray Kroc and the McDonald brothers. Just from first impressions, Ray immediately came off as the generic pushy monotoned salesman that stuck with the same spiel over and over again even though it was failing. Whereas, the brothers’ impression came off as wholesome and original and unlike Ray when they did face challenges or saw that a particular problem needed to be solved they would try different methods to find a solution (mapping the layout of restaurant on tennis court). They also had differences in morals and what was important to them. Rays’ dreams had no endpoint and grew bigger and bigger despite the huge risks and morality involved. The brothers had their own dreams as well but were content after reaching it and cared more about maintaining it well.
Do you think the McDonald’s brothers did the right thing by selling out to Ray Kroc? Did Ray Kroc give the brothers a good deal?
I think that it comes down to the fact that the brothers didn’t even have a choice to decide if it was a right or wrong decision, by that point it was too late for them to sue and truly win because as Ray threatened them “he’d bury them in court costs alone”. Also, whether the brothers got a good deal or not is a question of how much they feel their idea and their name cost. Yes they got a fortune for that time but they eventually lost their precious dream business when Ray opened up a franchise across the street and lost the right to their own name.
How did the local store franchisees make money?
Although not much, local franchisees made money from the profits of their sales after paying the franchisor the royalties and fees.
How did Kroc make money? How was that different than the franchisees, running the local stores?
At first, Kroc made money by getting a percentage of the profits from the franchise rights he sold to his friends. However, after he realized that he wasn’t actually getting much and was about to lose his house, he made a bounce back after he met Sonneborn who enlightened him on profiting more through real estate. By making it that franchises could only build a McDonals on the land leased from his company, he would see immense profits compared to before.
Does this film change your view of McDonald’s?
This film definitely shocked me about the origins of how McDonald’s first started and educated me a lot on the world of franchises. I felt very disappointed in Kroc’s ways (personal/professional choices) and see even more now why supporting local businesses is important.