Raymond Kroc

2 Pages 451 Words

Raymond Kroc

Ray Kroc was the founder of the immensely successful
McDonald’s franchise operation. He was a pioneer of
the modern fast-food restaurant industry. He
introduced management innovations that are now
standard in the business, such as implementing
assembly line methods and employing a part-time
teenage work force to produce a standardized menu at a
low cost. Kroc’s formula allowed him to build an
initial investment of a few thousand dollars into a
giant, international corporate empire.
In 1937, Ray Kroc came up with a new invention: a
machine that could mix five milk shakes at one time,
called the “multi-mixer.” He headed his own company to
serve as the exclusive distributor for the product.
Many years later, he heard of a drive-in restaurant in
San Bernardino, California, owned by Maurice and
Richard McDonald, which was operating eight of his
multi-mixers. Kroc was curious as to how they could
possibly use so many machines in a small
establishment, so he decided to visit the restaurant
himself. Kroc found that the brothers were doing a
remarkable business selling only hamburgers, french
fries, and milk shakes, while using the principles of
the assembly line as their basis for production. Kroc
recognized the potential opportunity and approached
the brothers about starting a franchise operation
based on their restaurant. After some negotiation, the
McDonald brothers agreed to join Kroc in partnership.
In exchange for one-half of one percent of the gross,
Kroc was granted the use of the McDonald name,
concept, and symbol (the golden arches), along with
unlimited franchise sales rights.
Ray opened the first of the chain of restaurants in
Des Plaines, Illinois. On that first day, Kroc’s
restaurant had sales of $366.12. By 1961, there were
over 130 outlets, and in that year he bought out the
McDonald brothers for 2.7 million dollars. From these
humble beginnings emerged a...