McDonald’s: Where it All Began

Mar 1, 2021 | Blog Posts

McDonald’s is one of the world’s biggest fast food restaurant chains, boasting a net worth of $151.19 billion. It operates 37,855 restaurants across the globe, in 120 countries and territories, with more than 210,000 staff and an annual revenue of $22.8 billion.

The fast food giant began as a small café in America in 1940 and wasn’t developed as the brand we know today until the mid-1950s. Brothers Richard and Maurice McDonald first opened their diner in San Bernardino, California.

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The family-run operation was a traditional burger café – an ethical, self-contained business that was a labour of love, rather than a money-making scheme. The brothers had introduced a revolutionary system of producing food in 1948, which they called the “Speedee Service System”.

They used an efficient assembly line to prepare and serve the burgers and fries, ensuring customers were served more quickly. It may have remained a small family business, and McDonald’s fast food chain might never have been formed, except for a chance meeting between the brothers and a travelling salesman called Ray Kroc.

Business opportunity

The Illinois salesman spent his life on the road, cold-calling at restaurants as he tried to sell kitchen equipment, such as food mixers, milkshake machines and paper cups from his car boot. At 52, he felt his career wasn’t going the way he would have hoped.

His life changed in 1954, when he called in at the McDonald brothers’ burger café at 1398 North East Street. Their assembly-line system grabbed his attention, as he had never seen it before at any of the many cafés he visited.

Initially, he was intrigued when they ordered eight malt and shake mixers, as he couldn’t understand how such a small establishment could do so much business. They explained that their Speedee Service System enabled them to make massive quantities of food cheaply.

Their basic hamburger cost just 15 cents, while competing restaurants were charging 30 cents. They had a self-service counter, so waiters and waitresses weren’t needed. Customers were served quickly because the burgers were cooked in advance, wrapped up and kept warm under heat lamps.

Chatting to the brothers, Kroc tried to persuade them to expand their business, using their unique preparation technique. He envisaged opening franchises to create a unique fast food business, as he knew he was on to something big.

Early discord

Initially, the McDonalds weren’t interested. They didn’t want to get involved in a profit-making scheme and were satisfied with their ethical, self-contained business. However, Kroc’s determination eventually paid off and after several meetings with the brothers, they began to change their views. Eventually, they came round to the idea of a chain of fast food restaurants.

The present McDonald’s corporation credits its official launch to Kroc on 15th April 1955. The first franchise was opened in Des Plaines, Illinois. In the same year, Kroc launched the McDonald’s Corporation.

According to his autobiography, he didn’t enjoy an amicable relationship with the McDonald brothers. Before hitting the big time, they were continually fighting for control of the business. He went on to purchase the McDonald brothers’ equity in the company in 1961.

It was claimed that once the documents had been signed, permitting Kroc to buy them out, the McDonalds had regrets, but it was too late to do anything about it by then.

Kroc soon began putting into practice his global expansion plan. The enduring “M” symbol was invented in 1962, while the famous mascot, Ronald McDonald the clown, was created in 1963. The company began trading stock publicly in 1965 and enjoyed steady growth. By the end of the 1960s, there were more than 1,000 McDonald’s outlets.

As McDonald’s expanded into the international market, it was to become a symbol of globalisation, representing the spread of the American way of life.

Movie biopic

The story of the launch of McDonald’s was depicted in a film called The Founder in 2016. The biopic starred Michael Keaton as Kroc. Critics praised the film for “blurring the lines”, so the audience couldn’t decide whether Kroc was a hero or the bad guy.

On the one hand, he embodied the American dream, portraying the smiling, positive entrepreneur who believed wholeheartedly in the power of capitalism, but on the other hand, he appeared to view any casualties (such as the McDonald brothers) as collateral damage, who had to be sacrificed for the greater good of the business.

The film was praised for “turning capitalism into entertainment”, as it was filmed documentary-style, with clips of real news reports of the era giving it a more realistic feel.

After founding the global franchise chain, Kroc also launched the Ronald McDonald House Foundation to care for seriously ill children and their families. He died aged 81, in 1984. During the 1990s, McDonald’s growth was so rapid that it was claimed a new franchise opened somewhere in the world every five hours!

Responsive marketing

McDonald’s has made a great effort to set the company apart from other similar chains by showing that fast, cheap food doesn’t mean it’s poor quality.

Company chiefs have spread the word that there’s nothing “fast” about the actual cooking process – the service is fast because it’s well organised rather than being a reflection on the standard of the food preparation.

McDonald’s also listened to public opinion and realised it wasn’t all about quality – it was about health issues too. A typical McDonald’s meal comprises a burger, fries and a fizzy drink. There was a distinct lack of vegetables, combined with high fat content and lots of calories.

As public opinion became concerned about increasing obesity, McDonald’s changed accordingly, introducing healthier items on its menu. These included salads, apple slices, carrot sticks and yoghurt.

A television documentary in 2004, called Super Size Me, featured film-maker Morgan Spurlock, who ate nothing but McDonald’s meals for one month as an experiment. He found his weight increased and he had little energy. After the film was released, with Spurlock reporting on the negative effects of his fast food diet, McDonald’s dropped the Super Size portions from its menu.

In 2015, McDonald’s reacted to the trend for rejecting eggs from caged hens on animal welfare grounds, making a commitment to use 100% cage-free eggs by 2025. The Humane Society of the United States called it an “earthquake” that shook the industry, as hundreds of restaurants followed suit.

McDonald’s has been serving a range of veggie burgers for some time and has introduced its latest offering for vegetarians, veggie wraps. It has also been trialling vegan burgers in some restaurants.

In April 2019, McDonald’s moved towards improving its digital presence by investing $3.7 million in the New Zealand-based app developer, Plexure – a leader in mobile engagement software.

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