Biz Hero #3 – Ray Kroc, McD
Ray Kroc, McDonalds Hamburger – Biz Hero
from Forbes magazine 10/12 enhanced by Peter/CXO Wiz4.biz
The Vision. In 1952, a 52 year old Milk Shake Machine salesman – of 30 years – saw how well that one of his Clients – a Hamburger stand – was selling food and envisioned a Fast Food industry that didn’t exist before. When most men would have been thinking of retiring, Ray saw how the McDonald brothers were delivering HB, Fries & Shakes, cheaper & faster and he envisioned how he could improve it and take the system nation-wide.
A simple, cheap & fast system. Years before, the McDonald brothers had left the East Coast to make their fortune in Hollywood. They didn’t make it there, but bought a Drive-In Restaurant in San Bernardino – 50 miles east of Los Angeles. After they started their simple, cheap & fast menu to compete with other HB joints, Ray noticed they had bought 8 Milk Shake machines were most Restaurants of their size only bought 2. When he saw their operation in 1952, he couldn’t believe their efficient operations. In a few minutes, they could cook a 15¢ Burger, stuff 10¢ worth of Fries & mix a 20¢ Shake. That’s when Ray had his “vision” of the potential of this system as a Franchise.
Running with it. Ray felt McDonalds could succeed wildly, if they expanded to other locations, but the brothers weren’t interested in expanding themselves, but agreed to let Ray do it.
Perfecting the System. Ray opened his 1st Restaurant – applied as much automation as he could and standardized processes to speed up the assembly of the burgers. He was also the 1st Franchiser to believe in helping his Franchises to succeed thru education & training. Ray was the first to recognize the importance of Professional Management of the Franchise (to help them succeed), so he established Hamburger University to train Franchisees on the McDonalds methods. HU also developed new products.
Making money on the Real Estate. He made more money in profits because he would buy or lease the land, then sub-lease it to the Franchisee.
Wild Growth. Today, McDonalds is the largest Fast Food chain in world –with 34,000 locations and over $7B in Sales – to beat KFC, and all other Burger Chains. McD has expanded to > 65 countries – which now accounts for 1/3 of sales.
Ray stepped down as CEO in 1968, but loved to make surprise inspections at the local location when he traveled. He died in 1984 at age 80 – when McDs was up to > $50B in sales. He wasn’t surprised. He always had the vision.
Comments: What do you think of what Ray did?