- What makes Ray Kroc and the brothers different from each other?
While the brothers of McDonald’s preferred to have just one franchise in one place, Ray Kroc sought to expand the McDonald’s chain all across the country. So, they have different thoughts and opinions towards their business.
- 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 decision they made was more smart than right. Because despite being good local business people, the brothers weren’t prepared for the big time. According to Kroc “McDonald’s” was a very unique and uncommon name which is what made him purchase it. It is a type of name where it catches attention because you get curious about what it is. Since Kroc had a stronger business sense than brothers, it was the right and smartest move. His presence helped McDonald’s grow into the giant big company it is today.
The brothers did receive a portion of the money from their contract with Ray Kroc. It was given to the McDonald’s Corporation, and Dick and Mac McDonald received 0.5% of that sum. The myth in the film is that Ray cheated the brothers out of that 5% by playing them like fools. So, even if the McDonald brothers ultimately formed a separate company, the arrangement was still unjust to them.
4.How did the local store franchisees make money?
It all started with a franchisee (a business visionary) purchasing a location and receiving access to the franchisor’s (the setup organization’s) company assets, such as its name, strategies, frameworks, and brands. Franchisees must pay a franchisor a variety of costs depending on the type of business and required licenses. These often include start-up costs, annual fees, and sometimes commissions or expenses on perks. The foundation of a franchise’s success is preparing the employees by teaching them and demonstrating their presumptions. The more effective your reps are, the happier your clients will be. Positive customers spend more money and will give you a lot less grief than negative ones. The franchisee generates revenue by Area is crucial: The McDonald’s business has a pretty clever idea on how the local store should operate depending on where it was built.
5. How did Kroc make money? How was that different from the franchisees, running the local stores?
Having implemented the franchise concept at McDonald’s, the brand has grown like wildfire, and North America is home to more McDonald’s franchisees than any other region in the world. Franchisees rent buildings to McDonald’s, often at markups that McDonald’s claims, in order to rent the cheap food it sells. This model provides an unquestionably predictable and consistent income stream, in addition to lower labor expenditures, due to a more straightforward approach to productivity, as a result of leasing payments and royalties received from franchisees. McDonald’s is able to negotiate favorable terms because it controls the property and has a long-term lease. Franchisees pay a monthly fee, similar to a membership.
6. Does this film change your view of McDonald’s?
The movie somehow changes my perspective of Mcdonald’s because it is nice to know that the owner came up with the idea with nothing in his hand but just an interesting name. He was creative enough to give it a try and it worked out perfectly fine. It’s always inspiring to know that you can create something big from something very small if you believe in yourself.
