McDonald's

McDonald's, fast‐food restaurant franchiser. Richard and Maurice McDonald introduced assembly‐line techniques at the hamburger drive‐in they opened in San Bernardino, California, in the 1940s. Their “Speedy Service System,” combined with economies of scale made possible by serving many customers quickly, proved far more profitable that the traditional labor‐intensive approach. Their success attracted potential franchisees, including Ray Kroc (1902–1984), who supplied the Multimixers used to prepare McDonald's milk shakes. Overcoming the McDonalds' reluctance to invest time or money in franchising, Kroc offered to take all responsibility as the sole franchise agent. The brothers accepted Kroc's offer, and in 1955 McDonald's restaurants began to appear nationwide. Kroc bought out his contract with the McDonald brothers in 1962. Kroc's vision of clean, quick, family restaurants with an instantly recognizable logo—the golden arches—fit beautifully with postwar trends of suburbanization, highway expansion, working mothers, and consumer preference for standardized, mass‐marketed products.

Fast‐food franchising had a mixed record before Kroc. Earlier franchisers had tended to sell off large territories to raise capital quickly, or to operate as the supplier for the franchisees (as the Howard Johnson's restaurants did in the 1930s), creating potential conflicts of interest and temptations to overcharge franchisees. Kroc emphasized efficient restaurant operations and guaranteed franchisees' profits before McDonald's Corporation took its cut. A key to McDonald's success was chief financial officer Harry Sonneborn, who structured franchise deals that insured profitability not by food sales alone, but through the real estate the restaurants occupied.

By the mid‐1990s, McDonald's was the world's largest private real‐estate enterprise, as well as its largest food service provider, serving nearly forty million meals daily in more than one hundred countries, with annual sales in excess of thirty billion dollars. A host of competitors such as Kentucky Fried Chicken, Taco Bell, Wendy's, and Burger King testified to the success of the McDonald's formula.
See also Consumer Culture; Fifties, The; Food and Diet; Highway System; Mass Marketing.

Bibliography

Ray Kroc with and Robert Anderson , Grinding It Out: The Making of McDonald's, 1977.
John F. Love , McDonald's: Behind the Arches, 1986.

Christopher Berkeley