Ray Kroc Biography - Childhood, Life Achievements & Timeline Business People Ray Kroc Biography Ray Kroc was the mastermind behind one of the worldâs largest fast food chains, McDonald's. To know more about him, read on his brief biography in the lines below. Quick Facts Rose Kroc Spouses/Partners: Ethel Fleming (1922â1961, divorced), Joan Kroc (1969â1984, his death), Jane Dobbins Green (1963â1968, divorced) education Oak Park and River Forest High School Founder/Co-Founder $500 million Image Credit Raymond Albert âRayâ Kroc was an extremely proficient American businessman. Once referred to by Harvard Business School as âthe service sectorâs equivalent of Henry Fordâ, Kroc but had a modest beginning. Starting from being a salesman of multi-mixer, he established himself as the man behind the worldwide name and fame of McDonald's with his mastermind.

In 1954, after grabbing the franchise of small-scale McDonaldâs Corporation, he transformed it into one of the most successful fast food operations in the world. He also utilized standardization to ensure that the McDonaldâs food products to taste the same in all the outlets. Kroc revolutionized the American restaurant industry with the new and developed operating and delivery system. He was named in Time 100 as âThe Most Important People of the Centuryâ. Kroc in his lifetime gathered huge wealth of $500 million. Also, he owned the San Diego Padres baseball team which was started in the year 1974. Ray Kroc Childhood & Early Life Ray Kroc was born on October 5, 1902 in Oak Park, Chicago, Illinois to the parents of Czech origin. The father of Kroc was originally from the village BÃ¸asy near PlzeÃ², Czech Republic. The childhood and most of the life of Kroc was spent in Oak Park, Illinois only. When Kroc was 15 years old, he was trained to become an ambulance driver during the First World War.

At that time, he made friends with Walt Disney who was also getting training with him. But the war soon ended before Kroc could see the action. Between the years of the end of war and early 1950s, Kroc tried his luck at numerous trades such as paper-cup salesman, pianist, jazz musician and band member. He also attempted his fate at an Oak Park radio station. He also once worked for room and boarded at one of the restaurants of Ray Dambaugh in the Midwest in order to learn the strategies to do restaurant business, (After several years, he paid his gratitude and respect to Ray Dambaugh for his favor by attending his funeral in Evans City, Pennsylvania). Kroc with the passing years became a multi-mixer milkshake machine salesman and traveled all around the country. Career The sales of Prince Castle Multi-Mixer, however, witnessed a dip as it faced tough competition from the lower-priced Hamilton Beach products. During this period, Kroc noticed McDonald brothers. The brothers had bought eight of his multi-mixers. He then soon visited the San Bernandino store and was convinced that he could easily sell the multi-mixers to their each new restaurant they were inaugurating.

Therefore, he went to the McDonald brothers and offered the same. At this time, the McDonald brothers were looking for a new franchising agent as their agent Bill Tansey had left them, due to the health issues. With the course of time, Kroc got irritated with the willingness of brothers to accept their restaurants chain. Thus in 1961, Kroc purchased the company from the McDonald’s brothers. The agreement of the same was that the McDonalds would receive a huge amount of $2.7 million for the chain which was ample to pay $1 million to each brother after the deduction of tax and to continue receiving a major royalty of 1.9% on the gross sales. The percentage was initially given 2% by the brothers which came down to 1.9 after the negotiation. But Kroc demanded that he could not show the royalty to the investors, and thus the agreement was finalized with split agreement between the parties. Kroc became quite frustrated at the closing table when the brothers did not transfer any real estate and rights to the original unit to him as they had discussed earlier of giving the entire operations, property and everything to the founding employees.

Kroc closed the transaction and denied to consider the royalty part of the agreement as it was not finalized in writing. The McDonald brothers constantly told Kroc that he could modify and make changes to things such as the original blueprint(building codes were different in Illinois than in California), etc, but in spite of Kroc’s requests, the brothers never sent him any such formal letters which allowed the modifications in the chain legally. Kroc then opened a new McDonald's restaurant just near the McDonald's with the “The big M” in the name as the brothers had neglected to retain the name’s rights, to force it out of the business. After the agreement was finalized between Kroc and the McDonald Brothers, Kroc posted a letter to Walt Disney his old acquaintance. He wrote in the letter stating that he had taken over the national franchise of the McDonald's system and wanted to inquire if there were an opportunity for a McDonald's in his Disney Development. On the reception of the same, Disney agreed under the condition to elevate the price of fries from ten cents to fifteen cents in order to taste good profit. But Kroc denied the condition and refused to gauge his loyal consumers. He left Disney to open without a McDonald's restaurant.

Undertaking Henry Ford’s assembly line ideas, Kroc introduced a whole new variety of fast foods with McDonalds. He also made use of standardization which was a business tactic to ensure that each “Big Mac”, a McDonald’s burger, tastes the same regardless whether a customer is having it in New York or Tokyo. Kroc also brought revolution in the methods of franchising, setting strict rules on the way the food is prepared. These rules were applicable to the customer service standards with such orders that money be refunded to clients in case of incorrect order or to consumers who had to wait for more than five minutes to get their ordered food. At the same time, Kroc also allowed the franchisees to decide their best strategies to market the product. The biggest example of the same is that Willard Scott developed the now internationally recognized figure known as Ronald McDonald to enhance the sales of hamburgers in the Washington, D.C. Personal Life Kroc married three times. His first marriage was with Ethel Fleming (1922–1961), he then married Jane Dobbins Green (1963–1968) and finally he married Joan. He stayed with his third wife till the end of his life.

Death Ray Kroc died on January 14, 1984 of heart failure at Scripps Memorial Hospital in San Diego, California. He was 81. RAY KROC TIMELINE Ray Kroc and the Fast Food Industry Sample Material The following material is copyright © 1996, Byron Preiss Visual Publications, Inc. and Forbes Inc. All Rights Reserved. Published by John Wiley & Sons, Inc. No use may be made of this material without the express written consent of the copyright holder. Ray Kroc, McDonald's, And The Fast-Food Industry In 1954, a fifty-two-year-old milk-shake machine salesman saw a hamburger stand in San Bernardino, California, and envisioned a massive new industry: fast food. In what should have been his golden years, Raymond Kroc, the founder and builder of McDonald's Corporation, proved himself an industrial pioneer no less capable than Henry Ford. He revolutionized the American restaurant industry by imposing discipline on the production of hamburgers, french fries, and milk shakes. By developing a sophisticated operating and delivery system, he insured that the french fries customers bought in Topeka would be the same as the ones purchased in New York City.

Such consistency made McDonald's the brand name that defined American fast food. By 1960, there were more than 200 McDonald's outlets across the country, a rapid expansion fueled by low franchising fees. Ray Kroc had created one of the most compelling brands of all time. But he was barely turning a profit. Ultimately, it was his decision to use real estate as a financial lever that made McDonald's a viable operation. In 1956, Kroc set up the Franchise Realty Corporation, buying up tracts of land and acting as a landlord to eager franchisees. With this step, McDonald's began to generate real income, and the company took off. Kroc then introduced national advertising programs to support the rapidly proliferating franchises, and when it appeared that growth in the company's home territory was slowing in the early 1970s, he started an energetic and successful push to make McDonald's a global presence. Throughout the company's spectacular growth, Kroc maintained a delicate balancing act, imposing rigorous system-wide standards while encouraging an entrepreneurial spirit that welcomed ideas from all levels. Many of these ideas contributed to the company's astonishing success.

In amassing a $500-million fortune, the king of the hamburger transformed the nation's cultural landscape and forged an industry that is among America's greatest exports. The widely imitated success of McDonald's offers an excellent example for today's managers and executives searching for greater production efficiencies. By putting the humble hamburger on the assembly line, Kroc showed the world how to apply sophisticated process management to the most prosaic endeavors. To succeed the McDonald's way, companies must define the basic premise of the service they offer, break the labor into constituent parts, and then continually reassemble and fine tune the many steps until the system works without a hitch. Today, companies engaged in delivering pizzas, processing insurance claims, or selling toys benefit from the kinds of systems that Ray Kroc pioneered. To the degree that such operations maintain quality control, and cherish customer satisfaction, profits may flow. Discovering The Future In San Bernardino As a milk-shake machine salesman, Raymond Kroc routinely paid visits to clients. But when the fifty-two-year-old salesman traveled from his home near Chicago to southern California to meet two of his biggest clients, the result was anything but routine.

Maurice and Richard McDonald had left New Hampshire in 1930, seeking to make their fortune in Hollywood. Unable to strike it big in Tinseltown, the brothers wound up as proprietors of a drive-in restaurant in San Bernardino, a dusty outpost fifty-five miles east of Los Angeles. While most restaurants bought one or two Prince Castle Multimixers, which could mix five shakes at once, the McDonalds had purchased eight. And Kroc was curious to see what kind of operation needed the capacity to churn forty milk shakes at one time. So he trekked to San Bernardino, and what he saw there changed his life. Kroc stood in the shadows of the stand's two radiant golden arches, which lit up the sky at dusk, and saw lines of people snaking outside the octagonal restaurant. Through the building's all-glass walls, he watched the male crew, clad in white paper hats and white uniforms, hustle about the squeaky-clean restaurant, dishing out burgers, fries and shakes to the working-class families that drove up. "Something was definitely happening here, I told myself," Kroc later wrote in his autobiography, Grinding It Out.

"This had to be the most amazing merchandising operation I'd ever seen." Unlike so many food-service operations Kroc had come across, this joint hummed like a finely a tuned engine. As Forbes put it: "In short, the brothers brought efficiency to a slap-dash business." They offered a nine-item menu -- burgers, french fries, shakes, and pies -- eliminated seating, and used paper and plastic utensils instead of glass and china. They had also devised the rudiments of a hamburger assembly line so they could deliver orders in less than sixty seconds. And the prices were remarkably low: fifteen-cent burgers and ten-cent fries. Kroc instantly knew he had seen the future. "When I saw it working that day in 1954, I felt like some latter-day Newton who'd just had an Idaho potato caromed off his skull," Kroc said. "That night in my motel room I did a lot of heavy thinking about what I'd seen during the day. Visions of McDonald's restaurants dotting crossroads all over the country paraded through my brain." Kroc had seen his destiny.

In 1906, Kroc's father had taken four-year-old Raymond to see a phrenologist -- a practitioner of a nineteenth century "medicine" that divined insights into a person's character and capabilities from the skull's shape and size. After groping and probing the bumps on the youngster's head, the phrenologist pronounced that the child would work in the food-service industry. Kroc had an intuitive feel for the restaurant business. He also possessed a more practical working knowledge of the industry, having spent the past thirty years selling paper products and milk-shake machines to restaurants all over the nation. In his journeys, Kroc saw an astonishing variety of operations -- coffee shops, mom-and-pop dinettes, diners, burger stands, and ice-cream chains like Tastee-Freez -- and became something of an expert on the low end of the American restaurant scene. Kroc concluded that too many of his clients were hamstrung by haphazard, unscientific management. And to their great chagrin, Kroc took to offering unsolicited advice on how they could improve their businesses. "I considered myself a connoisseur of kitchens," he said.

"I prided myself on being able to tell which operations would appeal to the public and which would fail." Kroc felt sure the McDonald brothers' operation could succeed wildly if it expanded. So the next day, he offered them a proposition. "Why don't you open a series of units like this?" he asked. The brothers demurred. They had already sold franchises in Phoenix and Sacramento for very little money, and had reaped no great benefits. At root, they were indifferent businessmen, satisfied with the $100,000 they earned annually and unwilling to invest the energy to build a chain. But Kroc was a veteran salesman with more that thirty years of experience. Using every ounce of persuasion he could muster, he finally convinced the brothers to cut a deal: Kroc would sell McDonald's franchises for the low price of $950. In exchange, he would keep 1.4 percent of all sales and funnel 0.5 percent back to the brothers. Because franchisees kicked back such a meager percentage of total sales -- just 1.9 percent -- the corporate parent made very little money.

This arrangement was far more favorable to the McDonalds' than to Kroc, for that small slice of revenues would have to account for Kroc's overhead and marketing costs -- and profits. But it was the act of a desperate man. While Kroc made $12,000 a year from Multimixer sales, the business was marked for extinction due to heavy competition from Hamilton Beach-brand mixers. Too old to start again from scratch, the middle-aged salesman believed the comfortable existence he and his wife, Ethel, led in suburban Arlington Heights, Illinois, would vanish if this venture failed. "If I lost out on McDonald's, I'd have no place to go," he said. Branding A Service And An Operating System With the deal in hand, Kroc set about fulfilling his vision of McDonald's restaurants blooming from coast to coast. He started by building the chain's first link -- an experimental model in Des Plaines, Illinois, outside Chicago, that featured the same low prices, limited menu, and rapid service as the San Bernardino stand. Opening on April 15, 1955, the store rang up a respectable $366.12 in sales, and quickly became profitable.

Kroc watched over the store with the vigilance of a new mother, personally overseeing the kitchen and scraping gum off the parking lot with putty knife. For Kroc, duplicating the McDonald brothers' single store was just the beginning. To build a chain, Kroc knew that he had to impose discipline on the loosely run restaurant industry. And that meant refining standardized operating procedures into easily replicable processes. Forty years earlier, Henry Ford had realized that the mass production of automobiles required the marriage of precision parts to an efficient assembly process. Kroc's insight was to apply the same rigor to the construction of sandwiches. Espousing the idea that "there is a science to making and serving a hamburger," Kroc endowed his beef patties with exacting specifications -- fat content: below 19 percent; weight: 1.6 ounces; diameter: 3.875 inches; onions: 1/4 ounce. Kroc even built a laboratory in suburban Chicago to devise a method for making the perfect fried potato in the late 1950s. The upstart company became an obsession for Kroc. "I believe in God, family, and McDonald's -- and in the office, that order is reversed," he liked to say.

But it seemed McDonald's always came first. Kroc's sales experience taught him that business was a Darwinian proposition, in which those least fit and adaptable would go the way of the dinosaur. Apparently, Kroc's marriage was not strong enough to survive the challenges of starting a new business. Ethel didn't share her husband's visceral feel for the restaurant business, and angered by Ray's late-life gamble, she resented the way the new company had taken over her husband's life. "This was a veritable Wagnerian opera of strife," Kroc wrote. "It closed the door between us." The thirty-nine-year marriage would finally end in divorce in 1961. In seeking to build a chain, Kroc knew that McDonald's did not have the field to itself. When he opened for business in 1955, A&W, Dairy Queen, Tastee-Freez, and Big Boy were all modestly established chains, and the first Burger King (known then as InstaBurger King) had just opened in Miami. Consequently Kroc took great pains to differentiate McDonald's from these players -- for competitive and intellectual reasons. The crucial difference between Kroc and his rivals was one of world view.

He saw franchisees as business partners, not as mere customers. In his travels selling the Multimixer, he had observed the way franchisers milked franchisees for profits without concern for their long-term viability. Kroc vowed not to fall into that lucrative but ultimately unproductive trap. "My belief was that I had to help the individual operator succeed in every way I could. His success would insure my success. But I couldn't do that and, at the same time, treat him as a customer," he said. Instead of simply supplying franchisees with milk-shake formula and ice cream, Kroc wanted to sell his new partners an operating system. In other words, he branded a service. And this was the revolutionary means McDonald's would use to create a chain in which a store in Delaware and a store in Nevada could serve burgers of the exact same size and quality, each containing the same number of pickle slices and topped with the same-size dollops of mustard and ketchup, each arrayed on similar tray alongside potatoes deep-fried for the exact same length of time. As Kroc recalled, "Perfection is very difficult to achieve, and perfection was what I wanted in McDonald's.

Everything else was secondary for me." But the exacting demands served a strategic goal. "Our aim, of course, was to insure repeat business based on the system's reputation rather than on the quality of a single store or operator," Kroc said. Among Kroc's first partners were fellow members of the Rolling Green Country Club who had seen Kroc's busy flagship store, which was a great advertisement for success. By 1958, Kroc had sold seventy-nine franchises, some of them to Rolling Green golfing buddies. Many customers, their curiosity piqued by a pleasant dining experience, knocked on Kroc's door. Still other prospective operators answered Kroc's newspaper ads. One of them was twenty-three-year-old Fred Turner, whom Kroc hired as a dollar-an-hour burger flipper in 1955. Turner shared his boss's fascination for the mechanics of burger-making, and quickly became a favorite of Kroc, who had only a daughter. "I have a son -- his name is Fred Turner," wrote Kroc.

Turner became Kroc's top assistant and joined two other key employees in the central office: June Martino, who had been Kroc's secretary from his Multimixer days; and Harry Sonneborn, a former Tastee-Freez finance executive who offered to come work for McDonald's for the low salary of $100 a week in 1955. Real Estate As A Financial Engine Although McDonald's franchises sprouted up across the Midwest and West like wildflowers after a spring rain, the company's success appeared to be short lived. While the original deal he had struck with the McDonald brothers endeared Kroc to early franchisees, it also set his fledgling enterprise on a direct course to insolvency. Through 1960, when the chain's restaurants racked up $75 million in sales, McDonald's earnings were a mere $159,000. "In short, Kroc's concept for building McDonald's was financially bankrupt," wrote McDonald's historian John Love. And Kroc's dream house of cards began to collapse under its own weight. Unable to give valued employees like Martino and Sonneborn raises, Kroc paid them by granting them 30 percent of the company.

He further diluted his equity by ceding 22 percent of McDonald's stock to two insurance companies to get $1.5-million loan in 1961. Even this loan, obtained at remarkably onerous terms, only temporarily slaked the firm's thirst for capital: Kroc needed to raise a huge chunk of money -- $2.7 million -- to buy out the McDonald brothers. His relationship with them was a continuing source of irritation. They did not meet his precise standards at the McDonald's franchises they had sold in California. Worse in Kroc's eyes, they took the liberty of selling a McDonald's franchise to a competitor in Cook County, Illinois, Kroc's home territory. Such actions intensified Kroc's desire to manage the growing enterprise on his own. However much he came to rue his connection with the McDonald brothers, Kroc realized the value of product identification created by the more than 200 outlets bearing their name. "I needed the name," Kroc lamented. "How far could I go on Kroc burgers?" Desperate for ultimate control of the McDonald's name, in 1961 he mortgaged the company's future again.

A New York money manager arranged a $2.7-million loan from several college endowment and pension funds, the interest payments on which were calculated as a percentage of McDonald's sales. Deep in hock and with no profit growth in sight, Kroc faced a classic dilemma. He couldn't afford to expand. And he couldn't afford to tread water. Fortunately, Harry Sonneborn came up with a solution. He thought McDonald's could make money by leasing or buying potential store sites and then subleasing them to franchisees initially at a 20 percent markup, and then at a 40 percent markup. Under this plan, McDonald's would scout out sites and sign twenty-year leases at fixed rates. Franchisees would then pay McDonald's either a minimum rate or a percentage of sales, whichever was greater. As sales and prices inevitably rose over the years, the company would collect more and more rent as its costs remained virtually constant. Embracing Sonneborn's idea, in 1956 Kroc set up a subsidiary, the Franchise Realty Corporation, to execute the new strategy.

In the years thereafter, he flew around the country in a small airplane, scouting suburban neighborhoods dotted with tract housing, schools, and churches -- which he regarded as fertile ground for the planting of new "Golden Arches." In this pre-strip-mall era, real estate along well-traveled byways was both cheap and plentiful. And in a short period of time, the real estate operation became a high-margin contributor to McDonald's bottom line. As Kroc noted: "This was the beginning of real income for McDonald's." The real estate strategy played perfectly into Kroc's larger goal of control. Rather than sell blanket geographic franchises, which would grant the holder the right to build as many or as few stores as he chose in a particular area, Kroc sold only individual franchises, for a low fee of $950. This insured that operators unwillingly to play by his rules could open no more than one outlet. As a landlord, Kroc could compose legal documents guaranteeing further control. And by writing leases that would force tenants to conform to corporate policy, he could more easily insure that the look, feel, and taste of McDonald's would be identical in Bangor, Maine, and Butte, Montana.

Leaving the company's stabilized finances in the capable hands of Harry Sonneborn, Kroc set about expanding and professionalizing the growing industrial empire. Under his novel conception, each franchisee and operator was like a plant manager. Knowing that the hallmark of any sophisticated industrial complex is professional management, Kroc in 1961 launched a training program -- later called Hamburger University -- at a new store at Elk Grove Village, Illinois. There, the faculty trained franchisees and operators in the scientific methods of running a successful McDonald's and drilled them in the Kroc gospel of Quality, Service, Cleanliness, and Value. "I put the hamburger on the assembly line," Kroc liked to say. Hamburger U also contained a research and development laboratory to develop new cooking, freezing, storing, and serving mechanisms. While Kroc dictated the size and shape of burgers, he gave franchisees wide latitude in other areas. He knew that McDonald's had to simultaneously unleash the entrepreneurial energies of hundreds of operators while maintaining the standards and regulations crucial to the efficient operation of a far-flung industrial enterprise.

As McDonald's chronicler John Love wrote: "Ray Kroc's genius was building a system that requires all of its members to follow corporate-like rules but at the same time rewards them for expressing their individual creativity." Going Public Through Advertising And A Stock Offering Nowhere was the dichotomy between central control and operating autonomy more evident than in advertising. At Christmas in the late 1950s, Turner and other managers would tour the Chicago Loop in the "Santa Wagon," an ice-cream truck converted into a rolling likeness of a McDonald's drive-in. But despite this penchant for old-fashioned hucksterism, McDonald's had no company-wide advertising strategy. Instead, when Minneapolis operator Jim Zein saw his sales explode in 1959 after running radio ads, Kroc encouraged operators to take to the air-waves with their own campaigns. Following this directive, two Washington, D.C., franchisees, John Gibson and Oscar Goldstein, decided to target kids by sponsoring a local children's show, Bozo's Circus. When the station canceled the show in 1963, the franchisees hired the headliner, a twenty-five-year-old television announcer named Willard Scott, to create a new clown persona for local ads.

Thus was born one of advertising's most enduring icons: Ronald McDonald. Successful advertising helped spur even greater growth. And in 1965, with 710 McDonald's spread throughout forty-four states, $171 million in sales, and a relatively tidy balance sheet, McDonald's finally blossomed. The company went public on April 15, ten years to the day after Kroc opened the Des Plaines store, selling 300,000 shares priced at $22.50 each. Many of the shares were offered by Kroc, who reaped $3 million on the sale, as well as by Sonneborn and June Martino. As investors jumped on the McDonald's bandwagon, the stock jumped to $30 on its first day of trading and soared to $49 soon after. Kroc deployed the cash to expand and fend off rapidly proliferating rivals, for the company's success has spawned a slew of imitators seeking to cash in on the growing industrialization of fast food. In 1965, there were already 1,000 Kentucky Fried Chickens, 325 Burger Chefs, and 100 Burger Kings in operation.

Each chain, fortified by cash infusions, expanded rapidly in the late 1960s, so much so that by 1970, fast food had grown to a $6.2-billion business garnering 17.8 percent of all money spent in restaurants. In such an environment, standing still was tantamount to shrinking. "A laurel rested upon quickly wilts" was a favorite Kroc-ism. So aside from opening new restaurants at a breakneck pace, McDonald's added a new weapon to its arsenal: national advertising. Having labored mightily to create uniform standards throughout the system, Kroc expended capital to forge a uniform image. In 1967, McDonald's spent $2.3 million, or about 1 percent of its sales, on its first national advertising campaign, which was an unheard amount for a fast-food chain. "What small businessman wouldn't cheerfully give up 1 percent of his gross to get our kind of commercials and things like sponsorship of The Sound of Music on network television to promote his store?" Kroc asked rhetorically.

Expanding the Ronald McDonald campaign created by the Washington franchises, the company outfitted the clown with a gaggle of kid-friendly characters such as Hamburglar, Mayor McCheese, and Grimace, a large purple creature who craved shakes and french fries. "We're not in the hamburger business; we're in show business," Kroc liked to say. Kroc backed up the advertising blitzkrieg with several new products, many of which were created by franchisees. Pittsburgh operator Jim Delligatti, seeking to bolster sales, in 1967 began testing a new double-decker hamburger that he dubbed the Big Mac. McDonald's introduced the sandwich throughout the chain in less than a year, and it has since become the firm's enduring signature product. Other new menu items, ranging from the Filet-o-Fish to the Egg McMuffin, also sprouted from the fertile imaginations of McDonald's operators and were similarly welcomed by Hamburger Central, as the headquarters came to be known. Becoming A Global Institution Through rapid growth and extensive advertising, McDonald's in the early 1970s became the nation's largest fast-food chain and an easily recognizable feature of the American cultural landscape.

And the supreme ruler of McDonaldland, Ray Kroc, became a figure of national stature. In 1972, when more than 2,200 McDonald's outlets racked up $1 billion in sales, Kroc received the Horatio Alger award from Norman Vincent Peale. As the value of his stock holdings rose to about $500 million, the septuagenarian acquired certain trappings of wealth: a house in Beverly Hills, a mansion in Florida whose doorbell chimed "You Deserve A Break Today," and the San Diego Padres baseball team. But Kroc remained at heart a simple man, who spoke proudly of "the peasant bones of my Bohemian ancestors." Unlike so many other newly rich captains of industry, he developed no taste for great art or society events. Instead, he continued to find beauty in the simple bun. "It requires a certain kind of mind to see beauty in a hamburger bun," Kroc rhapsodized.

"Yet, is it any more unusual to find grace in the texture and softly curved silhouette of a bun than to reflect lovingly on the hackles of a favorite fishing fly?" Just as the Ford Motor Company aroused the scrutiny of muckraking journalists and reforming politicians, Ray Kroc's high-profile industrial juggernaut attracted attention from many quarters. As McDonald's fare became a staple of the American diet, it aroused the snobbery of the food industry elite. New York Magazine's Mimi Sheraton proclaimed: "McDonald's food is irredeemably horrible, with no saving graces whatever." Nor did the nutritionists take kindly to McDonald's offerings. As Dr. Jean Mayer, a Harvard professor, wrote: "The typical McDonald's meal -- hamburgers, french fries, and a malted -- doesn't give you much nutrition. It's typical of the diet that raises the cholesterol count and leads to heart disease." Politicians took note, too. In 1974, when the company's market value surpassed that of lumbering U.S.

Steel, Senator Lloyd Bentsen complained: "Something is wrong with our economy when the stock market is long on hamburgers and short on steel." But the future Secretary of the Treasury ignored the fact that burgers had become an industrial product nearly as significant as rolled steel, for the McDonald's industrial complex was a prodigious consumer of raw materials. It bought about 1 percent of all beef wholesaled in the United States and a huge quantity of potatoes besides. Each store was an opportunity-generating machine -- providing one out of fifteen young Americans with a point of entry into the workplace. To broadcast its booming output, McDonald's made a practice of posting its latest chain-wide total sales figures on the Golden Arches. And the mounting billions were monitored in the highest offices in the land. President Richard Nixon, upon meeting Kroc in the early 1970s, asked him: "What is it now, eight or nine billion?" Kroc replied: "Mr. President, it's twelve billion." Many analysts viewed McDonald's rampant growth as unsustainable. But Kroc believed the company needed to continue to expand in order to survive. "I don't believe in saturation," he said.

"We're thinking and talking worldwide." Kroc envisioned a world in which 12,000 sets of Golden Arches would stand as outposts of a mighty commercial empire. Sure, there was one store for every 90,000 citizens of the United States in 1972. But there were three billion people outside America's borders who had never wrapped their mouths around a Big Mac. So just as Henry Ford sought foreign markets for the Model T, Ray Kroc embarked upon an ambitious campaign. McDonald's started by invading former Axis powers Japan and Germany in 1971. And in 1977, it introduced the fast-food sandwich to the land of Sandwich, opening the company's 3,000th store in London. "With all the fervor of the Pilgrims returned, McDonald's set out to introduce Europe to the joys of the real American hamburger," Forbes noted. Establishing beachheads in European capitals was just the beginning. Over the course of the decade, the thousand stores that the company opened overseas fueled its 27 percent annual growth rate. Golden Arches sprouted from the soil in virtually every continent -- in South America, in Europe, and in Asia.

The chain became so universally recognized as a symbol of American enterprise and influence that, when Marxist guerrillas blew up a McDonald's in San Salvador in 1979, they proclaimed the terrorist act a lethal blow against "imperialist America." Although Kroc stepped down as chief executive in 1968, giving way to Fred Turner, he remained a vital symbol of the company's roots, and an enduring influence over day-to-day operations. The founder reviewed first-day results from each new store, and kept watch over the company-owned McDonald's outlet from his office in southern California. "Despite McDonald's success, and his personal wealth of $340 million, he always worries," Forbes wrote in 1975. "When Kroc travels, he insists that his chauffeur take him to at least six McDonald's for surprise inspections." Though he killed the competition, the competition didn't kill Ray Kroc. He passed away from old age in January 1984, at the age of eighty-one, just the ten months before McDonald's sold its 50-billionth hamburger. Ray Kroc didn't live to see his company's ultimate triumph.

The Dow Jones Industrial Average, the best daily barometer of the nation's economy, consists of the nation's thirty most important companies. In 1985, when the value of McDonald's $4.16-billion real estate portfolio surpassed that of Sears, the New York Stock Exchange added McDonald's to the Dow. With this stroke, Wall Street validated Ray Kroc's contention that beef patties could be placed on the assembly line. The once-humble hamburger finally took its rightful place among planes, trains, and automobiles as a titan of American industry. Adapting To Foreign Climates One key to McDonald's continued growth is international expansion. With operations in more than 65 countries, McDonald's now opens about one-third of its new restaurants outside of the United States. In the early 1990s, Fred Turner predicted that international sales would eventually surpass U.S. sales. While foreign markets can sometimes offer new obstacles for the American company, like hostile government bureaucracies and unreliable local suppliers, McDonald's faces an even greater overall challenge. In each country, from Belgium to Brunei, the company is forced to walk the tightrope of selling its uniquely American product, while simultaneously catering to local tastes.

Although McDonald's always insisted on planting its rigid operating system in foreign soil, when it came to other aspects of the restaurants' operation, the company was more flexible. For example, to make the chain's name more easily pronounceable for Japanese consumers, it was changed to Makudonaldo, and its mascot became Donald MacDonald. Hamburger Central also allowed local operators to devise unique promotional campaigns. "Our name may be American, but we're all Irish," ran one promotional campaign for outlets in Dublin. Today, even the menus at McDonald's restaurants in foreign locations clearly reflect differences that do not exist at the company's American outlets. While the stores offer fare like hamburgers, french fries and milk shakes, there have been some additions: for example, when McDonald's restaurants opened in Germany in the early 1970s, they started serving beer; in the Philippines they offer McSpaghetti noodles, while Norwegian franchises offer a salmon fillet sandwich, the MacLak. All sample material is copyright © 1996, Byron Preiss Visual Publications, Inc. and Forbes Inc. All Rights Reserved. Published by John Wiley & Sons, Inc. No use may be made of this material without the express written consent of the copyright holder.

Our History and Timeline | McDonald's Our History As proud to make history as we are to make burgers. From drive-thru restaurants to Chicken McNuggets to college credits from Hamburger U, we’ve had quite a journey. And we’re still going. But to take a look into our past, we need to share the story of one man. The Ray Kroc Story How do you create a restaurant business and become an overnight success at the age of 52? As Ray Kroc said, “I was an overnight success alright, but 30 years is a long, long night.” Origins In 1917, 15-year-old Ray Kroc lied about his age to join the Red Cross as an ambulance driver, but the war ended before he completed his training. He then worked as a piano player, a paper cup salesman and a Multimixer salesman. In 1954, he visited a restaurant in San Bernardino, California that had purchased several Multimixers. There he found a small but successful restaurant run by brothers Dick and Mac McDonald, and was stunned by the effectiveness of their operation.

They produced a limited menu, concentrating on just a few items – burgers, fries and beverages – which allowed them to focus on quality and quick service. They were looking for a new agent and Kroc saw an opportunity. In 1955, he founded McDonald’s System, Inc., a predecessor of the McDonald’s Corporation, and six years later bought the exclusive rights to the McDonald’s name. By 1958, McDonald’s had sold its 100 millionth hamburger. A Unique Philosophy Ray Kroc wanted to build a restaurant system that would be famous for providing food of consistently high quality and uniform methods of preparation. He wanted to serve burgers, buns, fries and beverages that tasted just the same in Alaska as they did in Alabama. To achieve this, he chose a unique path: persuading both franchisees and suppliers to buy into his vision, working not for McDonald’s but for themselves, together with McDonald’s. He promoted the slogan, “In business for yourself, but not by yourself.” His philosophy was based on the simple principle of a 3-legged stool: one leg was McDonald’s franchisees; the second, McDonald’s suppliers; and the third, McDonald’s employees.

The stool was only as strong as the three legs that formed its foundation. “If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean with them.” – Ray Kroc System First First and foremost, Kroc advocated adherence to the system approach. So while many of McDonald’s most famous menu items – like the Big Mac, Filet-O-Fish and Egg McMuffin – were created by franchisees, the McDonald’s operating system required franchisees to follow the core McDonald’s principles of quality, service, cleanliness and value. The Roots of Quality McDonald’s passion for quality meant that every single ingredient was tested, tasted and perfected to fit the operating system. Kroc shared his vision of McDonald’s future, selling his early suppliers on future volumes. They believed in him and the restaurant boomed. Again, Ray Kroc was looking for a partnership, and he managed to create the most integrated, efficient and innovative supply system in the food service industry. These supplier relationships have flourished over the decades. In fact, many McDonald’s suppliers operating today first started business with a handshake from Ray Kroc.

Hamburger University In 1961, Kroc launched a training program, later called Hamburger University, at a new restaurant in Elk Grove Village, Illinois. There, franchisees were trained on the proper methods for running a successful McDonald’s restaurant. Hamburger U utilized a research and development laboratory in nearby Addison, Illinois to develop new cooking, freezing, storing and serving methods. Today, more than 80,000 people have graduated from the program. The Legend Lives On Right up until he died on January 14, 1984, Ray Kroc never stopped working for McDonald’s. His legacy continues to this day as the system provides McDonald’s customers with great tasting, affordable food; crew and franchisees with opportunities for growth; and suppliers with a shared commitment to provide the highest quality ingredients and products. From his passion for innovation and efficiency, to his relentless pursuit of quality, to his many charitable contributions, Ray Kroc’s legacy continues to be an inspirational and integral part of McDonald’s – today and into the future. Sources Grinding it Out: The Making of McDonald’s by Ray A. Kroc, ©Ray A. Kroc 1977.

McDonalds: Behind the Golden Arches by John F. Love ©John F. Love 1995. aboutmcdonalds.com 2009. One Milestone At A Time From the first drive-thru to the first Chicken McNuggets, we’ve had a lot of memorable milestones. For a snapshot of our accomplishments, take a look at our interactive History Timeline . Leadership Team Ray Arthur Kroc Ray Kroc creator of the McDonald's franchise Ray Arthur Kroc was born in Oak Park, Illinois, on October 5, 1902. In 1917, he lied to the Red Cross about his age in hopes of becoming an ambulance driver during World War I , but the war ended before he could realize his dream. After the war he initially took a job as a piano player, but it was as a salesman that Kroc would begin his climb to fame. In 1922, Kroc became a salesman for the Lily Tulip Cup Company. One of Kroc's best customers was Earl Prince, who had invented a milk-shake machine that could make five shakes at a time.

Kroc was able to obtain exclusive marketing rights to the Prince Castle Multimixer, and he spent the next 17 years crisscrossing the country peddling the device. As Kroc visited restaurant after restaurant on his sales rounds, he saw first hand which restaurants seemed to have the right formulas for success and which seemed doomed to failure. And, never one to keep his opinions to himself, he was always prepared to offer advice to restaurant owners as to how they could improve their business. In 1954, he was presented with an opportunity to put his advice to work for himself. In 1954, Kroc traveled to San Bernardino, California, home to a small hamburger stand owned by brothers Maurice and Richard McDonald. The McDonalds had ordered eight Mixmasters, and Kroc just had to see what kind of operation needed the ability to make forty milk shakes at one time. What he saw when he arrived was a long line of people waiting to place their order. Looking into the building, he saw an all-male crew, each man clad in white paper hats and white uniforms, working in a squeaky-clean kitchen with great efficiency.

There were only nine items on the menu (hamburgers, cheeseburgers, french fries, shakes, soft drinks, and pies), and each item was offered at an incredibly low price (fifteen cents for burgers, and ten cents for fries, for example). And, the brothers had developed an "assembly line" process that allowed them to deliver any order in less than sixty seconds. Kroc was greatly impressed. The McDonald brothers had already established a "chain" of eight hamburger stands in Southern California, but were initially unsure about Kroc's proposal to franchise their operation. After some heavy persuasion, he was finally able to convince them to let him sell franchises at $950 each. Under their agreement, Kroc would get 1.4 percent of all sales in those restaurants he franchised, and another 0.5 percent would go to the brothers. On March 2, 1955, Kroc formed McDonald's Systems, Inc. (which was renamed McDonald's Corporation in 1960).

On April 15, 1955, the very first McDonald's franchise operation opened for business in Des Plaines, a suburb of Chicago, Illinois ; the store did $366.12 worth of business that day. Kroc's formula for sucess was to insure that all McDonald's products were prepared the same and tasted the same, no matter where the particular restaurant was located. He even had a laboratory built in Chicago to devise better methods for making each product, and by the late 1950's every McDonald's hamburger, no matter where it was purchased, was cooked the same way, and contained the exact same amount of toppings. By 1960, there were more than 200 McDonald's restaurants across the country, and people were practically lining up at Kroc's door to open new franchises. In 1961, Kroc secured a $2.7 million loan, which he then used to buy out the McDonald brothers. Subsequent Milestones in McDonald's History 1963 The 500th McDonald's opened. 1963 The "One Billion Hamburgers Sold" slogan became valid.

1963 Two Washington, D.C., franchisees hired Willard Scott to create a clown persona for local ads, and Ronald McDonald was "born." 1965 The McDonald's Corporation went public. 1967 The first national McDonald's advertising campaign began, featuring Ronald McDonald, the Hamburglar, Grimace, etc. 1968 Kroc stepped down as chief executive of McDonald's. 1971 The first McDonald's restaurants outside of North America opened, in Japan and Germany. January 14, 1984 Ray Kroc died in San Diego. Greatest Business Stories of All Time The Time 100: Builders & Titans Fast Food during the 1950s and 60s In the 1950s and 60s, fast food chains  epitomized by McDonald's  revolutionized the restaurant industry and changed farming and food distribution businesses. The first McDonald's restaurant was actually a barbecue joint that opened in 1940 by brothers Dick and Maurice (Mac) McDonald along Route 66 in San Bernardino, California. At first, they offered 25 different items served by carhops.

They catered to young affluent people who were part of the emerging California car culture. Teens drove up, placed their order with the carhops and were served on trays that hooked onto rolled down windows. In 1940, The brothers figured out that almost all of their profits were coming the sale of hamburgers. They also sensed that teens and families alike were interested in eating quickly. So, they closed down their restaurant for several months and developed their "Speedee Service System" of food preparation. This was a streamlined assembly line for food. They also streamlined their menu to hamburgers, milkshakes and french fries. The burgers sold for 15-cents, about half of what a burger cost at regular diners of the time. With success, the brothers franchised their enterprise and had eight restaurants open by the early 50s. It's significant that McDonald's concentrated on milkshakes because that brought Ray Kroc to McDonalds in 1954. Kroc was selling the Multimixer  a machine that could mix five shakes at a time  when he became fascinated with the Speedee system. He asks the brothers to allow him to franchise McDonald's outside of California.

They do and Kroc opened his first outlet in Des Plaines, Illinois, a suburb of Chicago. By 1958, the company sold its 100 millionth hamburger. By 1961, Kroc bought out the McDonald brothers and opened a training facility called Hamburger University in Illinois. The rest, as they say, is history. In a way, Burger King was an outgrowth of McDonald's. The same year that Ray Kroc visited the original McDonald's, James McLamore and David Edgerton visited as well. They were both graduates of the Cornell University course in hotel administration, and they also saw the potential of assembly-line fast food. They opened their first restaurant in 1954 in a suburb of Miami, Florida. Now, Burger King has more than 11,220 franchise outlets in 61 countries. The franchise model was quickly adapted to other types of food, for example, pizza. By the early 50s, servicemen returning from Italy brought back a taste for pizza. Up until then, pizza was a regional dish concentrated in Italian immigrant neighborhoods in New York and Chicago. New York pizza was very thin, and Chicago pizza tended to be very thick.

After WWII, other local pizza joints began to open up with a variety of recipes. In 1958, Dan and Frank Carney borrowed $600 from their mother and opened the first Pizza Hut in Wichita Kansas. It was so successful that they began franchising restaurants quickly. By 1968, they opened their first restaurant in Canada. Now they have operations in over 100 countries. Dominos added delivery to the pizza business when they opened their first store in Detroit Michigan in 1960. Their guarantee  delivery in 30 minutes or it's free  helped them expand to include more than 8,000 stores in 55 countries. Today, there are 4.2 billion pizzas sold every year by 60,000 pizzerias. The franchise model  with a central source of supply for food items and standardized menu  became so successful that fast food joints are now part of multi-national corporate giants. Pizza Hut is now part of the aptly named Yum! Brands, a corporation that also owns Taco Bell, A&W, Long John Silver's, and the American icon KFC.

In the early 1950s, Col. Harland Sanders was both a victim and a beneficiary of the automobile boom. Since the Depression, Sanders had been serving fried chicken  prepared with a "secret recipe of 11 herbs and spices"  at his gas station and restaurant in Corbin, Kentucky. But the route for the new Interstate 75 was going to bypass his establishment, so the Colonel sold his property and started traveling across the U.S. trying to sell his spice recipe and preparation method. Sanders claimed that frying his chicken in a pressure cooker shortened the preparation time. The short cooking time would take advantage of the fast food boom. No one bought, until Pete Harman of South Salt Lake, Utah, opened the first "Kentucky Fried Chicken outlet in 1952. Today, KFC has 750,000 employees and is the most popular Western fast food chain in China. Coincidently, Dave Thomas got into the fast food business by franchising several KFC stores in Ohio.

He was the one who came up the idea that the chicken should be sold in paper buckets to wick away excess moisture, and he also came up with the rotating bucket-of-chicken advertising sign that, at one time, was outside every KFC. But in 1969, Thomas wanted to go out on his own, and so he opened the first Wendy's in Columbus, Ohio. He stressed fresh, rather than frozen, meat served as square patties prepared fresh and served "hot off the grill." Wendy's was also the first fast food restaurant to build a drive-through window in 1970. That cut down on labor costs because carhops were no longer needed, and all of the fast food chains built drive-throughs within a few years. The predominance of fast food restaurants changed the food supply chain all the way down to the farmer. McDonald's quickly became the single largest buyer of beef, pork, potatoes and apples in the U.S. That gave them tremendous economic clout. The fast food system is all about standardization, and so when the companies went looking for someone to supply their meat, they choose to deal with their large, corporate counterparts in the packing industry.

IBP began to produce "boxed beef," where the final cuts of beef, including hamburger, were produced at the processing plant rather than the local grocery. IBP became the largest supplier of hamburger meat to the fast food industry. Kentucky Fried Chicken buys all of its chickens from huge suppliers like Perdue, Tyson and Pilgrim's Pride. McDonald's gets its fish products from the giant supplier Gorton's of Gloucester. Because consumers with busy lifestyles needed food fast, the chains needed raw materials in standardized packages. So, meat packers needed a consistent supply of standardized animals to produce their meat. They couldn't afford to deal with the uncertainty of many, small family farms. So, livestock producers became bigger and bigger. McDonald'sand other chains have also been accused of using their huge buying power to keep farm produce prices artificially low. When McDonald's expanded into international marketplaces beginning in 1971, McDonald's both adapted to local conditions and forced local farmers to adapt to them. For instance, beef is not the lead meat item offered in countries that have cultural taboos or food preferences for other types of meat. However, the company has been accused of changing food preferences and exporting American culture around the world along with its propensity for obesity.

McDonald's and other fast food chains have affected farmers wherever new restaurants open. In 1990, McDonald's opened their first outlet in Russia. When they realized that they couldn't guarantee a high quality, reliable supply of meat and other food products, they opened their own farms, controlling the supply chain at every step. Written by Bill Ganzel, the Ganzel Group . First published in 2007. A partial bibliography of sources is here . Ray Kroc News | Wiki - UPI.com Ray Kroc News Next Wiki Raymond Albert "Ray" Kroc (October 5, 1902 – January 14, 1984) was an American businessman who took over the small-scale McDonald's Corporation franchise in 1954 and built it into the most successful fast food operation in the world. Kroc was included in Time 100: The Most Important People of the Century, and amassed a $500 million fortune during his lifetime. He was also the owner of the San Diego Padres baseball team starting in 1974. Kroc was born to parents of Czech origin in Oak Park, Chicago, Illinois, in 1902.

He grew up and spent most of his life in Oak Park, Ill. During the First World War he trained to become an ambulance driver. At this time he befriended Walt Disney who was also in training. The war ended before Kroc saw action. Between the end of the war and the early 1950s he tried his hand at a number of trades including paper-cup salesman, pianist, jazz musician, band member and worked at an Oak Park radio station. At one time, Ray worked for room and board at one of Ray Dambaugh's restaurants in the mid west to learn the restaurant business. Years later, he returned the favor by coming to Ray Dambaugh's funeral in Evans City, Pennsylvania to pay his respects. He eventually became a multi-mixer milkshake machine salesman, traveling across the country. Convinced that he could sell mixers to every new restaurant that they opened, he partnered with the McDonald brothers who were looking to begin franchising. Kroc eventually became frustrated with the brothers' willingness to accept their chain having only a handful of restaurants. In 1961, he purchased the company from the brothers.

The agreement was for the McDonald's to receive $2.7 million for the chain and to continue to receive an overriding royalty of 1.9% (when negotiating the contract the McDonald brothers said that 2% sounded greedy, 1.9% was much more attractive) on the gross sales. McDonald’s Movie ‘The Founder’ Starring Michael Keaton Gobbled By Weinstein Co | Deadline Michael Keaton In Talks To Join 'Kong: Skull Island' For Legendary It’s the true story of how Kroc, a salesman from Illinois, met Mac and Dick McDonald, who were running a burger operation in 1950s Southern California. Kroc was impressed by the brothers’ speedy system of making the food and saw franchise potential. He maneuvered himself into a position to be able to pull the company from the brothers and create a billion-dollar empire. FilmNation has the foreign half of the pic. CAA put together the movie and brokered the deal.

Below is the official press release: Following a fierce bidding war among top US distributors, The Weinstein Company (TWC) will co-finance THE FOUNDER, the origin story of the rise of the McDonald’s fast food empire, with FilmNation Entertainment and will distribute the film in the US. FilmNation Co-President Production & Acquisitions Aaron Ryder will produce along with Jeremy Renner’s and Don Handfield’s The Combine. FilmNation will handle all international territories, which nearly sold out last month at Berlin’s European Film Market. The drama will star Oscar nominee and Golden Globe winner Michael Keaton (BIRDMAN: OR THE UNEXPECTED VIRTUE OF IGNORANCE) to be directed by John Lee Hancock (SAVING MR. BANKS, THE BLIND SIDE). Pre-production is set to begin this month, and shooting will start mid May in Atlanta. Commented TWC Co-Chairman Harvey Weinstein: “THE FOUNDER is set to be an incredible project centered around one of America’s greatest modern success stories.

We are immensely excited to be joining with Glen Basner and the wonderful FilmNation team, along with The Combine, in bringing such a prestigious set of acting and filmmaking talent together on screen.” “TWC’s continuously fresh approach to distributing and marketing elevated films like this is second to none and is exactly what we were looking for when finding a US home and partner for the film,” said FilmNation Entertainment CEO Glen Basner. The tone of the script has been described as being akin to THE SOCIAL NETWORK and THERE WILL BE BLOOD. Written by Robert Siegel (BIG FAN), THE FOUNDER is a drama that tells the true story of how Ray Kroc, a salesman from Illinois, met Mac and Dick McDonald, who were running a burger operation in 1950s Southern California. Kroc was impressed by the brothers’ speedy system of making the food and saw franchise potential. He maneuvered himself into a position to be able to pull the company from the brothers and create a billion-dollar empire.

International distributors on board include: Studiocanal in the UK, Elevation Pictures in Canada, Roadshow Films in Australia, Europacorp in France, Splendid Film in Germany, Videa in Italy, Sun Distribution in Latin America, Mis Labels in Scandinavia, Spentzos Film in Greece, LEV Cinemas in Israel, Prisvideo/Ecofilmes in Portugal, Aqua Group in Turkey, Ster Kinekor in South Africa, Bravos in Hong Kong, PVR Pictures in India/Pakistan, PT Amero in Indonesia, Captive Entertainment in Philippines, Shaw Renters in Singapore, 9ers Entertainment in South Korea, and Applause in Taiwan. CAA brokered the deal with FilmNation EVP Business & Legal Affairs Alison Cohen and TWC COO David Glasser and EVP Acquisitions and Business & Legal Affairs Michal Steinberg.

Question: Ray Croc developed which company in the 1950's?
Answer: McDONALDS