Visit our website startup stories. IN for more inspirational stories and updates from the startup world.Startup stories in association with oh look. in. Today we are going to talk about a restaurant where over 70 million people eat everyday. The very restaurant has served over 00 billion burgers. And is one of the world’s largest restaurant chains which grew from a very small family restaurant in a California town. Well, we are talking about one of the most loved brands by food lovers McDonald’s and this is how it became a pioneer in the world of food business.
Founded by Richard and Morris McDonald in the early nineteen forties. McDonald’s pioneed the speedy service system. A simple method of preparing hamburgers that use production line efficiency in a restaurant. The service and the restaurant which served up simple hamburgers and family meals in a small California town. Proved to be a big hit. Tired of waiting for hours for their food in other nearby restaurants. Visitors flock to McDonald’s for tasty and affordable food. That arrived at their tables in mere minutes. However, despite its success, McDonald’s could never go beyond the lanes of California and it surprisingly took a really long time before it became the world’s biggest restaurant brand.
Well, the brothers Mac and Dick McDonald had started the first food stand in nineteen forty. But they did not receive real success until eight years later. It was then that they turned the kitchen into a mechanised assembly line with each step in the cooking process being down to its essence and accomplished with minimum effort. They got rid of the car hops and indoor seating. Replacing them with a system where customers would order directly through outdoor service windows. By concentrating their efforts on keeping cars down.
The brothers could maintain low prices for a consistently good product. This inevitably led to a high rate of customer turnover. By 19 fifty-4 as McDonald started witnessing success. They had happily licensed 10 other drivers. Many of which were boldly managed and had no consistent system. They were McDonald’s only by name. Well, McDonald’s reputation was at stake. The other franchisee owners were not following the procedure said by Mac and Dick. Things were going out of hand and the brothers did not understand how to tackle the situation.
They finally decided to take back all the licenses and shut every franchise and only run their restaurant.Well, cut to the year 198-four. McDonald’s had a thousand restaurants and was present in 32 countries around the world. But how was that possible? How did McDonald’s and its founders what once were unable to think beyond their stand alone store in California. Later went on to become the biggest food phenomena in the world. Well, the answer to that question is the name of one man and one man alone. He is none other than Ray Crock.
The mastermind behind the stupendous growth of McDonald’s. It all started back in nineteen fifty-four when Ray Crock parked his car in front of McDonald’s store. As he sat in his car, he watched a miracle unfold. The parking lot was full and the queues were really long. Yet the customers were leaving with an arm full of food and a smile on their face. Crocs stopped a few to see what was going on. Someone responded that he’ll get the best hamburger he ever ate just for 15 cents.
Without having to wait and mess around tipping waitresses. Well yet travel the country selling milkshake machines visiting countless restaurants of all types. But he had never seen a merchandising operation like this. And thus Ray Crock a spunky salesman from Illinois entered the picture. Croc was an absolute visionary. No matter what kind of business he had pursued over his life. He always dreamt big. From selling milkshake machines to flipping real estate in Florida. His goal was always to be the best.
There was no settling for the in place. So when he pissed his franchise idea to the McDonald brothers he did not hesitate to think big. At first the brothers politely declined the offer. They were content with the decent living they made running just one store in California. But Crock persisted and explained that he would help open all the stores doing all the hard work. And the brothers would just sit around and collect royalties. After a series of discussions.
They finally agreed and a contract was drafted day.Later Croc was on his way back to Chicago with a strong vision of disrupting the food industry. Before he could begin selling franchises. Croc had to build his own McDonald’s to perfect all the procedures. He went fifty 50 with a friend on a location in Des Plains, Illinois. Which opened its doors on April 15th, 1955. All the cost and time saving mechanisms had to be the same. The layout of the griddles and fry bats were essential to the operations efficiency.
But most of all Croc was adamant about maintaining consistent quality of the food. Hello they had some initial difficulties replicating the San Bernardino stores success. Although the Desplains location was not doing as well as the California’s McDonald’s. It had made money from day one and Croc now had the confidence to start lining up franchisees. Just over a year after the 1955 opening. There were already eleven franchisees stores opened across the country.
Another year later in what would become the beginning of a breadneck growth praise. There were twenty-five more units open. Well, through his agreement with the McDonald Brothers, Croth was earning as less as 1. 9% of the gross revenues of all McDonald’s franchisees and 25% of that went to the brothers. Something had to be done to earn extra income and then enters Harry Sonovan. The company’s financial visit. He came up with the idea of purchasing the real estate of all franchise locations and leasing it back to the operator.
Thereby franchise Realty got was set up in 19 fifty-six to act as a landlord to current and future franchisees. As the operators started paying ever increasing Munzi red. Franchise Realty soon became one of McDonald’s biggest generators of profit. Despite the new income from McDonald’s and franchise reality. Croc was unhappy about his agreement with the McDonald brothers. In 1961, he asked them to name their price and bought the company and the name for $2.
7 million dollars.At the time he thought that the deal was overpriced and viewed the brothers offer as outlandish. Yet in hindsight the buyout would turn out to be one of the best investments Croc would ever make.
Later after successfully running McDonald’s for 13 years Crocs stepped down as the CEO in nineteen 6-8. But he still played an active role in the company. Despite a bad economy during the 70s. He pressured the company’s leaders to increase the rate of growth. So apart the great leadership and the perseverance that is inherent in any success story. There are three elements that stand out in McDonald’s phenomenal rise to the top. Their franchisee model their leadership in cost and time efficiency and their ability to convey those benefits into the minds of customers. Today McDonald’s is valuated at over 106 billion dollars. With more than 36, 000 locations and presence in over 00 countries around the world. McDonald’s is more than just global brand.
It’s golden archers are known to the world as an American icon.Thank you so much everyone for suggesting us to do the success story of McDonald’s. We hope you liked it. Do let us know whose story do you want to see next in the comment section below and we’ll soon have it uploaded on this channel. For more inspirational stories and updates from the startup world. Visit our website startup stories. IN. Till then stay motivated.