Early Days, 1955 Part Two – From Little Acorns to Globalisation

ray kroc mcdonalds 1

Some World changing developments were happening around about the time of my first year, most of them in the America where the USA was emerging as the wealthiest and most progressive country in the World.

Apart from the Atomic Bomb no development was more dramatic than the hamburger.

The  original McDonald’s restaurant opened in San Bernardino, California in 1940, with a diner owned by two brothers, Richard and Maurice McDonald.  The present McDonald’s Corporation however dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois in April 1955.

The McDonald brothers were interesting, some would say rather eccentric characters who were inspired by the assembly line manufacturing method of Henry Ford in his car factories and in 1948 without warning they suddenly closed their traditional and popular establishment for several months and set about applying the principles of mass production to the restaurant industry.

1955 mcdonald_brothers

They pared the service back to only the essentials, offering a simple menu of hamburgers, french fries and milkshakes, which were produced on a continuous basis rather than made to order and with no alternatives on offer.  Basically just ‘take it or leave it’.  This was whole new idea that they called ‘fast food’ that went against all service conventions which could be served to a formula, almost instantaneously and always with absolute consistency.

They also removed any distractions like jukeboxes and payphones so it wouldn’t become a hangout spot for young people and that there would be a continuous turnover of customers.

mcdonalds speedee

The brothers reduced labour costs because there were no waiting staff and customers presented themselves at a single window to place and receive their orders.  They made the food preparation area visible to the customers to demonstrate its high standards of cleanliness and they eliminated all plates and cutlery serving only in paper bags with plastic knives and forks.

Their introduction of the ‘Speedee Service System’ established the principles of the modern fast-food restaurant. The original mascot of McDonald’s was a man with a chef’s hat on top of a hamburger shaped head whose name was ‘Speedee.’  Speedee was retired in 1962 and replaced by Ronald McDonald which I always thought was the weirdest possible merchandising mascot.  He was just plain scary!

1955 ronald mcdonald

Ray Kroc was a multi-mixer milkshake machine salesman and he was intrigued by an order from the McDonald brothers who had purchased eight of his Multi-Mixers, which to him seemed rather a lot for a small restaurant.  Immediately after visiting the San Bernandino restaurant he became convinced that he could sell exceptional numbers of mixers to every new restaurant that they opened and so he offered the McDonald brothers a deal.

Although they were truly innovative the it turns out that the two brothers were not especially ambitious and were they were satisfied with their one restaurant that provided them with a comfortable lifestyle and regular income.  Their only indulgence was to treat themselves to a new car every year.  But Ray Kroc realised the potential of their idea and with much bigger plans proposed a chain of new McDonald’s restaurants and he tried to convince them to expand the operation.  They refused.  He eventually became frustrated with their lack of vision and forced them into an agreement.

Kroc prepared a business proposal but insisted that he could not show all of the details to the potential investors so the agreement was made with a handshake (as opposed to a milkshake). The brothers dithered and Kroc became impatient and annoyed that they would not transfer to him the real estate and rights to the original unit.  Kroc walked away from the transaction and then refused to acknowledge the royalty portion of the agreement because it wasn’t in writing.

The McDonald brothers were clearly poor businessmen and no match for the ruthless Kroc, they even neglected to register the name McDonalds so to force the issue Kroc opened his new McDonald’s restaurant near the brothers diner which they were forced to change to “The Big M”.

In 1961, he finally purchased the company from the brothers. The agreement was for the McDonalds to receive $2.7 million for the chain and to continue to receive an overriding royalty of 1.9% on future gross sales and very specifically 1.9% because when negotiating the contract the McDonald brothers said that 2% sounded greedy.

Nowadays McDonalds and Greedy are virtually synonymous!

McDonalds didn’t reach the United Kingdom until 1974 and now there are over a thousand of them and the Company business plan is to open thirty new restaurants every year.  I don’t remember when I first started using McDonald’s, probably at about the time my children started to request it as a dining option, and now, apart from the occasional breakfast bun, I would only use it if I am absolutely desperate!

One place where Kroc failed to make an impression was at Disneyland.  In 1955 he wrote to Walt Disney offering a deal: “I have very recently taken over the national franchise of the McDonald’s system. I would like to inquire if there may be an opportunity for a McDonald’s in your Disneyland Development.”  The story goes that Walt was too busy to deal with the matter personally so he passed it on to the President in charge of concessions.  Allegedly he agreed but wanted to increase prices by 50% with all the extra profit going to Disney.  Kroc refused and it was to be another thirty years before they worked together.

mcdonalds world

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45 responses to “Early Days, 1955 Part Two – From Little Acorns to Globalisation

  1. It’s an interesting story, isn’t it? They got one thing right- paper bags! We seem to’ve gone a bit wrong after that 🙂 🙂

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  2. this was a fascinating story on so many levels

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  3. I like better Burger King 😎 and Wendy’s is even better for chains.

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  4. I always preferred Wimpy, and nowadays prefer Ed’s Diner, straight burger and onions, no extraneous crap, red leather seats and non stop free juke box in every booth 🍔

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  5. My first visit to a McDonalds’ was in the eighties. I was horrified at the casual dining and couldn’t handle not having a knife and fork.

    I’ve taken grandchildren at their request on many occasion, but never had breakfast there.
    Not keen on the fries at Burger King they have an odd flavour.
    I’ve only ever eaten homemade, home cooked Kebabs.

    Six of my grandchildren are half Chinese and we used to own a takeaway with one of my son-in-laws. Therefore top of my list of takeaway food is Chinese, but real Chinese food is never found in a takeaway and their cakes are to die for!

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  6. Not sure i’ve ever had a Macdonald’s! I must be one of the last people on the planet.

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  7. The McD story is an interesting one, Andrew. My son-in-law had recorded the TV special on it. I refused to eat in a McDs for a long time, finding the whole concept of fast-food obnoxious. But eventually I gave in a bit. About all I can say is that the franchise is consistent. –Curt

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  8. I consider myself fortunate to have grown up in one of the few Canadian towns without a MacDonalds. (The nearest one was a ferry ride or two away.)

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  9. We didn’t get a macdonalds in South Africa for a very long time.. Thank goodness..

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    • Official website – McDonald’s opened its doors in South Africa in 1995. Today, over 200 restaurants in all nine provinces across South Africa. Serving over 8 million customers per month. Employing over 10, 000 people

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  10. Henry Ford said you can have any color you like so long as it’s black;
    Macdonald’s is pretty much along the same lines, anything you want so long as it’s their stuff.Bland and uninteresting,I suppose it fills a hole that’s about all

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    • I think that is the point. You know if you buy a Big Mac in Sydney it will taste the same as in London. Having said that there are a lot more variations these days country by country. Frog Leg Burger in France?

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  11. I was a little disappointed to find one close by the pyramids on a trip Egypt many years ago, if anything that what I hate about them most, there placement. They should be reserved for the side of the motorway, thats about the only time I use them and that I’m glad of them 🙂

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  12. I remember being horrified at my mother who, upon returning from a trip to Japan, raved about the fact that they had a McDonalds. Why bother leaving home if that’s the focus.?

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    • Sadly it is hard to find anywhere without the Golden Arches. Iceland has none which is rather a surprise.
      I do like to take a peek inside them just to see if there are regional variations in the menu.
      I have never been to Canada but this is McDonald’s poutine which looks especially unpleasant…

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      • I manage to avoid them, but going back ages when I first tried them, I thought the so-called hamburgers were simply atrocious. Have to agree that the french fries are pretty good, but without any sauces or additions.

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