Jordan Ellis
In 1954, Ray Kroc visited a hamburger restaurant in San Bernardino, California, owned by brothers, Dick and Mac McDonald. Kroc, who had previously worked as a milkshake mixer salesman, was intrigued by the fact that the brothers had purchased eight of his mixers. He wanted to see why they were making so many milkshakes. Kroc was impressed by the low prices and efficiency of the restaurant's operations. This visit marked the beginning of a business relationship between Kroc and the McDonald brothers, which would eventually lead to the creation of the McDonald's franchise.
| Characteristics | Values |
|---|---|
| Year of the visit | 1954 |
| Reason for the visit | To see why the brothers were making so many milkshakes |
| Outcome of the visit | Ray Kroc became the franchising agent for the McDonald brothers |
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What You'll Learn
Ray Kroc's first meeting with the McDonald brothers
In 1954, Ray Kroc, a milkshake mixer salesman for Prince Castle, visited the McDonald brothers' hamburger restaurant in San Bernardino, California. Richard and Maurice McDonald had purchased eight of Kroc's mixers for their restaurant, and Kroc was intrigued as to why they were making so many milkshakes.
Upon his first visit, Kroc was impressed by the low prices and efficiency of the restaurant's operations, which had been implemented by the brothers. They had introduced an innovative, efficient assembly-line system of preparing and serving food, something Kroc had never seen before. The brothers were also looking for help expanding, and Kroc offered to buy the U.S. franchise rights.
Kroc, who was 52 at the time and frustrated with his lack of success, saw the potential of the McDonald brothers' burger café. He offered to work as a franchising agent in exchange for a small slice of the profits. The brothers agreed, and Kroc was hired as their franchise agent that same year. He took 1.9% of gross sales, of which the McDonald brothers received 0.5%frustrated with the McDonald brothers' desire to maintain a small number of restaurants. They also consistently told him he could not make changes to the original blueprint. Kroc wanted control of the company and eventually bought it from the brothers in 1961 for $2.7 million.
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Kroc's business relationship with the McDonald brothers
In 1954, Ray Kroc, a milkshake mixer salesman for foodservice equipment manufacturer Prince Castle, visited the McDonald brothers' hamburger restaurant in San Bernardino, California. He was intrigued by the fact that the brothers, Richard and Maurice McDonald, had purchased eight of his mixers. Kroc was impressed by the efficiency and speed of the restaurant's operations, and the low prices. He convinced the brothers to allow him to become their franchising agent, taking 1.9% of gross sales, of which the McDonald brothers received 0.5%innovative ideas about the food-service franchise model. He believed that selling single-store franchises, rather than larger, territorial franchises, would allow him to retain control over the direction of the chain's development and ensure uniformity in service and quality among all of the McDonald's locations. However, Kroc's relationship with the McDonald brothers soon deteriorated. Kroc became frustrated by the brothers' desire to maintain a small number of restaurants and their refusal to allow him to make changes to the original blueprint.
In 1961, Kroc bought the company from the McDonald brothers for $2.7 million (worth approximately $28 million in 2024). The brothers were happy with the deal, but they were displeased by the lack of recognition they received from the new McDonald's Corporation. Kroc's acquisition of the McDonald's franchise has been criticised, with some arguing that he treated the founding brothers unfairly and cheated them out of their fortune.
The McDonald brothers, Dick and Mac, were not interested in selling franchises themselves, and so they had allowed Kroc to become their franchising agent. However, Kroc eventually wanted control of the company entirely. He opened a new McDonald's restaurant near the original McDonald's, which had been renamed "The Big M" as the brothers had not retained the rights to the name. Kroc's focus on aggressive expansion led to the rapid growth of McDonald's, both nationally and internationally.
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Kroc's buyout of the McDonald brothers
The McDonald brothers, Dick and Mac McDonald, founded the first McDonald's restaurant in 1940 in San Bernardino, California. They created the Speedee Service System, which became the standard for the fast-food industry. In 1954, they hired Ray Kroc as their franchise agent. Kroc was a milkshake mixer salesman who had been impressed by the brothers' purchase of eight of his mixers for their restaurant.
Kroc and the McDonald brothers had differing visions for the business. While the brothers focused on quality and control, Kroc prioritized expansion and profit. He wanted to turn McDonald's into a global franchise, but the brothers were reluctant to expand through franchising due to concerns about quality. They had already tried franchising once, and the changes to the menu and the originality of the items had been significant.
Kroc became frustrated with the McDonald brothers' desire to maintain a small number of restaurants and their refusal to allow him to make changes to the original blueprint. He eventually decided he wanted control of the company entirely. In 1961, he bought the company for $2.7 million, a figure the brothers gave him when pressed for an amount. Obtaining the funds for the buyout was difficult for Kroc due to existing debt from expansion, but his associate Harry Sonneborn was able to raise the required funds.
The buyout did not include the rights to the original San Bernardino location, which the brothers had decided to give to the founding employees. Angered by this, Kroc opened a new McDonald's restaurant near the original, which had been renamed "The Big M". The Big M eventually closed, and Kroc had effectively put the McDonald brothers out of business.
There is some debate about whether the McDonald brothers received a good deal from Kroc. While they were pleased with the $2.7 million price, they later expressed disappointment over the lack of recognition from the new McDonald's Corporation. Some sources claim that Kroc cheated the brothers out of millions of dollars by cutting them out of a percentage deal and renegotiating terms in his favor. However, others note that Kroc did not leave the brothers destitute, and they had no regrets about the deal.
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Kroc's failure to credit the McDonald brothers
Ray Kroc is credited with turning McDonald's into the most successful global fast-food corporation by revenue. However, his success was built on the foundation laid by Richard and Maurice McDonald, who opened the first McDonald's restaurant in 1940 in San Bernardino, California. The McDonald brothers created the Speedee Service System, which became the standard for the fast-food industry.
In 1954, Kroc, who was then a milkshake mixer salesman, visited the McDonald brothers' restaurant and was impressed by the efficiency and speed of their operations. He convinced the brothers to let him franchise the concept, and they hired him as their franchise agent, giving him 1.9% of gross sales, while they got 0.5%. However, Kroc soon became frustrated with the McDonald brothers' desire to maintain a small number of restaurants and their refusal to allow him to make changes to the original blueprint.
Kroc wanted control of the company and eventually bought it from the McDonald brothers in 1961 for $2.7 million, a figure the brothers gave him when he pressed them for a number. The brothers were pleased with the deal but were displeased with the lack of recognition they received from the new McDonald's Corporation. Kroc is often credited as the founder of McDonald's due to his influence as a franchise agent and his role in the company's expansion, despite not actually founding the company.
Kroc's acquisition of the McDonald's franchise and his treatment of the founding McDonald brothers have been criticised. It is alleged that Kroc cheated the brothers out of a percentage deal that could have been worth hundreds of millions of dollars. The McDonald brothers' nephew, Ronald McDonald, claimed that Kroc was all about "ego, ego, ego" and set about rewriting history to ensure he was described as the founder. Kroc also angered the brothers by opening a new McDonald's restaurant near the original location, which had to be renamed "The Big M" as they no longer had the rights to the McDonald's name.
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The McDonald brothers' legacy
The McDonald brothers, Richard and Maurice McDonald, were American entrepreneurs who founded the fast-food company McDonald's. The brothers were born in Manchester, New Hampshire, to Irish Catholic parents who had immigrated to the United States as children. Their father's unemployment and lack of a pension after working for 42 years inspired the brothers to pursue financial independence.
The McDonald brothers initially ventured into the entertainment industry, taking up gigs at Columbia Movie Studios. However, they soon realised that the low pay would not make them millionaires, so they saved up and opened a movie theatre, the Beacon, in 1930. Unfortunately, the theatre struggled financially during the Great Depression. The McDonald brothers then moved to California, where their father opened a food stand in Monrovia in 1937.
In 1940, the McDonald brothers opened their first McDonald's restaurant in San Bernardino, California. They introduced the "Speedee Service System," a revolutionary concept that prioritised speed, cost, and efficiency of service, becoming a pioneer of the production line in food preparation. The restaurant was a success, and the brothers began franchising their restaurant system in 1953, with the first franchise opening in Phoenix, Arizona.
In 1954, the McDonald brothers hired Ray Kroc, a milkshake mixer salesman, as their franchise agent. Kroc was impressed by the low prices and efficiency of the McDonald brothers' restaurant and convinced them to allow him to franchise the concept. However, tensions arose as Kroc desired aggressive expansion, while the McDonald brothers wanted to maintain a small number of restaurants. In 1961, Kroc bought the company from the McDonald brothers for $2.7 million (equivalent to $28.4 million in 2024). The McDonald brothers were pleased with the deal but disappointed by the lack of recognition they received from the new McDonald's Corporation.
While Ray Kroc is often credited with the success of McDonald's, it is important to recognise the legacy of the McDonald brothers, who laid the foundation for the fast-food giant. Their innovative ideas, such as the "Speedee Service System," transformed the way food was prepared in the industry. The McDonald brothers' story serves as a reminder of the creativity and ambition that drove the success of one of the most recognisable brands in the world.
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Frequently asked questions
No, there is no evidence to suggest that Ray Kroc ever visited the McDonald brothers in the hospital.
Yes, Ray Kroc met Richard and Maurice McDonald in 1954. The brothers owned a hamburger restaurant in San Bernardino, California, and Kroc was a salesman for the milkshake mixers they used.
Ray Kroc visited the McDonald brothers' restaurant because he was intrigued by their purchase of eight of his mixers and wanted to see why they were making so many milkshakes.
Yes, after several years as their franchising agent, Ray Kroc purchased the company from the McDonald brothers in 1961 for $2.7 million.
