Disclaimer: This is entirely the opinion of the author. Everything is for educational purposes only and should not be construed otherwise.
Who’s the leader of the fastfood revolution?
1965
slice of the burger chain, the clown — ronald mcdonalds
a fantastic start
going public, loaded with debt but lots of working capital
This clown — Why would we want our business be fronted with a Clown?
impressive numbers. Sonauburn
mcdonalds is a hot stock
Emboldened by the success of Mcdonalds’ initial public offering
McDonald’s developed a franchise business model that would be standard for American business. Kroc’s growth was historical. By 1965, MCD went public at 22 a share. In 1985, MCD became part of DJIA. Besides business models for franchising and standardized operations, MCD developed the concept of a corporate culture with its Hamburger University in 1961.
MCD is an amazing story of the development and evolution of a new business model. The history of MCD goes back to 1937 when patriarch Patrick McDonald opened the Airdome restaurant in 1937 at Monrovia California. It Airdrome restaurant was a carhop operation. It was based on 10 cents hamburgers and all you can drink orange drink for 5 cents. PAtrick’s sons Maurice and Richard came into the business in teh 1940s. The brothers quickly realized the importance of speed in such an operation. In 19348 , they eliminated the carhops and moved to a business model they called the speedee service system. This was a self service system specializing in a limited menu of hamburgers, cheeseburgers, fries, shakes softdrinks and apples. They redesigned the kitchen to assure speed in order preparation. They probably borrowed from the first pioneer of fastfood, Walter Anderson of White Castle, in the 1920s. White CAstle focused on hamburger cooking speed and supply costs forcing customers to add their own condiments. MCD added more variety and kitchen organization to its operation. Both MCD and White Castle were franchising their systems in 1950s. (White Castle was franchsing in 1930s). MCD brothers were offering franchises in 1940 but lacked necessary sales and marketing skills. Another weakness of MCD was an aversion to advertising which White Castle had mastered.
Things changed in 1952 when Kroc, a milkshake mixer salesman and marketer entered the employ of the MCD brothers. Kroc had the knowledge of the infant fastfood industry and offered to franchise their system and introduce a marketing program. It was a loose business arrangement for Kroc but he was able to franchise the first MCD restaurant at Des Plains, Illionois in 1955. Kroc’s marketing quickly took the number of restaurants to over 100 in 1959. Demographics of suburban growth helped MCD franchise. Kroc and the MCD brothers grew further apart and in 1961, Kroc bought out the chain for 2.7M dollars. After the sale, brothers briefly went into competition with Kroc but Kroc drove them out of business. He retained the operating system but now added a powerful marketing campaign. Kroc’s business model stated that marketing and operations had to be coordinated to support each other. This marketing and operations coordination will always distinguish MCD from the competition.
(Credits to The 100 Most Significant Events by Quentin Skrabec)
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