One of Ray Kroc’s main beliefs is that you shouldn’t work for money. “If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.” (Kroc, 22). For Kroc, his dedication to his customers mattered more than selling out for a quick buck. It was this loyalty to his customers throughout his entire career that made McDonald’s thrive. According to him, “The two most important requirements for major success are: first, being in the right place at the right time, and second, doing something about it.”
When fate lead Ray Kroc into the small burger joint of the McDonald brothers, it was how he committed to these ideals for his entire career that turned McDonald’s into the largest and richest food company working today. Walt Disney, who later became a prominent figure in the animation industry, and Ray Kroc coincidently served in the same training camp together as teenagers for World War I. Around 40 years later they would meet again, more successful than they were then.
After Kroc gained ownership of the McDonald’s franchise from the McDonald brothers, one of his first business proposals was to Walt Disney. He told Disney about his new ownership of McDonald’s and inquired to see if there was an opportunity for McDonald’s to be integrated into the creation of Disney Parks. Disney agreed but with the exception that the prices of fries increased from ten to fifteen cents. But Ray refused due to his loyalty to his own customers and left Disney to open without a McDonald’s. (The Famous People, 2011)
Ray Kroc was born on October 5th, 1902 in Oak Park, Illinois. Kroc showed foreshadowing of future traits at an early age, as he stereotypically owned a lemonade stand as a kid. Despite becoming famous for his insightful marketing plans, Kroc never finished high school (Kroc, 1977). At the age of 15, Kroc dropped out of high school and lied about his age to become an ambulance driver during World War I. While training for the war, Kroc was first introduced to Walt Disney while they were serving in the same regiment. Although he trained, the war ended before he could be put to use. After the war had ended, Kroc tried his hand at various jobs. Kroc went on to become a paper cup salesman for Lily-Tulip, a pianist, a jazz musician, a band member, and a disc jockey at Oak Park’s radio station WGES (Kroc, 1977). Then when real estate started booming, Kroc found himself in Fort Lauderdale selling real estate. Kroc was forced to return to Chicago in 1926 when the boom collapsed and went back to being a salesman for Lily-Tulip. In 1937, Kroc discovered the “multi-mixer”; a mixer, which could mix five, shakes at once. Kroc founded his own company in 1941 to exclusively distribute the “multi-mixer”(McGrath, 2008). He went from city to city, searching for customers. He noticed a trend in the cities he went to. People began to abandon the cities in search for a more secure lifestyle in the suburbs, which hurt his sales. Then in 1954, just when sales were declining at a steady rate, Kroc had heard of a restaurant owned by Richard and Maurice McDonald operating eight of his multi-mixers. Out of curiosity, Kroc visited the restaurant and discovered the McDonald brothers’ remarkably efficient business. The food was produced in an assembly-line fashion, so customers could get their food within minutes of ordering. After having years of experience in marketing and business, Kroc recognized the potential in their business. Kroc approached the brothers with a business plan and after some negotiation they agreed, giving him franchising rights. Kroc then started his business, which would lead him to fame and fortune.
On his path to greatness, Ray Kroc was affected by some of the most defining American tragedies of the early 20th century, especially by the Great Depression and the aftermath of the World Wars. Ray had already dropped out of high school during World War I, and his training soon went to waste as the war ended before he could be enrolled. Following the U.S triumphs, the country was full of hope. The U.S told its citizens and more specifically it’s veterans that the future was theirs. They could buy a piece of land and start a farm with a family. This naive hope was shut down with some early economic developments. If a person didn’t have a degree or education, they would flock down south for the agricultural market. One of the events that helped spark a continuous movement of the American population towards California was the Dust Bowl. By 1940, more than 2.5 million people had left their affected regions. Almost 10 percent of them moved to California (Foner, 2001). Adding to this movement was the end of World War II. Following the end of World War II people fled to California in search of new work. Also within the cities of America a trend began to start. This is partly due to the heightened tension in the urban cities during the growth of the civil rights movement, and also the cheapening of suburban houses. Families began to move from the cities to the suburbs in hopes of ensuring a brighter future. Ray’s multi mixer business depended on city restaurants as consumers. The decline in urban life caused his business to slow. So Ray followed the path that many other Americans did. Going to California in hope of luck and success. The first part of Ray’s equation for success was true: he was in the right place at the right time. When he saw the potential for McDonald’s he took the opportunity and took reigns over the company. (Kroc, 1977)
Kroc had a different vision for the future of McDonald’s conflicting with the plans of Richard and Maurice McDonald. The brothers were content with the extent their restaurant had grown, but Kroc had ambition to expand further. Finally, in 1961, Kroc bought the company for 2.7 million dollars with 1.9% royalty. Kroc became annoyed with the brothers when at the closing table they refused handing over the rights of the original restaurant. Kroc declined the deal and refused to pay the royalties. The brothers opened the original restaurant as The Big M due to the fact that Kroc had owned the copyright to the name “McDonald’s”. Kroc opened another McDonald’s close by to compete with “The Big M” and eventually ran it out of business (Kroc, 1977). Kroc was then able to take over the McDonald's empire.
While Kroc had gained the rights to the McDonald’s franchise in 1955, he still had a long way to go to achieve the profit he had envisioned. Kroc was unable to generate a profit from his franchising even though it was generally successful (The Famous People, 2011). McDonald’s didn’t start to see a profit until later in their existence. While Kroc had the ambition to reach his goal, he didn’t quite know how to pull it off. It was when he met Harry Sonnenborne in 1956, who told him that he could make a lot of money off of real estate, instead of raising the prices of food. Rather than relying on food for profit, the company could instead lease a plot of land for where each restaurant was built (McGrath, 2008). This “think global, act local” approach revolutionized the way chains would market their brand. When McDonald’s would expand to each certain land, Kroc would have to figure out the best way to approach the market. This approach would influence the growth of commercialism in American companies of the 20th century.
An example of conflict when expanding overseas was how McDonald’s approached the Indian market uniquely. About 80% of Indians don’t eat beef due to religious reasons, and over 150 million Indian Muslims don’t eat pork, so McDonald’s had to change their approach to adapt to Indian cultural standards. Their classic 100% beef burgers were replaced with lamb patties. They also supplied local cultural dishes to appeal to the locals more, like the “McAloo Tiki Burger”. This approach to global marketing innovated how big chains would expand.
Ray Kroc was a product of the environment of America in the early 20th century; his company and endeavors would impact America for the next half of the century. In the 1930s unemployment rates peaked at 25%. McDonalds today is the fourth largest employer in the world (second largest private employer). With 1.9 million employees. The expansion of McDonald's created many job opportunities for lower class American citizens. Today, unemployment rates an average of around 7%. This in part can be due to chains taking after the McDonalds model expanding and creating new jobs.
How did a 52-year-old degree-less man find and create one of the most successful companies in the world today? How did Ray Kroc stamp his footstep in American history in creating one of the most iconic companies in history and achieving world dominance in terms of agriculture? This question needs a proper illustration of the state of America in the earlier portion of the 20th century and how it evolved with the evolution of McDonald’s. We have to examine the mindset of an American in this part of our history to truly understand Ray’s ambitious goals that he poised the second he saw McDonald’s. How did his story of hopelessness evolve into a story of the iconic American dream about this country? A closer look at the evolvement of American culture over the past 100 years and what role McDonald’s plays into that can demonstrate how Ray Kroc’s vision has defined what it means to live the American Dream and the impact his ideals had on American culture.