Raymond Albert Kroc

Raymond Albert Kroc (1902-1984) was a salesman who set up the first franchise of the McDonald brothers' drive-in restaurant. He bought the golden arches symbol from them and built the McDonald's chain based on the concepts of a limited menu of controlled quality and uniformity combined with massive advertising.

Ray Kroc was born in Chicago, Illinois, on October 2, 1902, the son of relatively poor parents. He went to public schools in Oak Park, Illinois, a suburb of Chicago, but did not graduate, leaving school to serve as an ambulance driver during World War I, like Ernest Hemingway, also from Oak Park. After the war Kroc became a jazz pianist, playing with the Isham Jones and Harry Sosnick orchestras. Upon his marriage in 1922 he went to work for the Lily-Tulip Cup Company, but soon left to become musical director for one of Chicago's pioneer radio stations, WGES. There he played the piano, arranged the music, accompanied singers, and hired musicians. Kroc's wanderlust was not satisfied with this, and the real estate boom in Florida soon found him in Fort Lauderdale selling real estate. When the boom collapsed in 1926 Kroc was so broke that he had to play piano in a night club to send his wife and daughter back to Chicago by train. He later followed them in his dilapidated Model-T Ford.

Kroc thereupon returned to Lily-Tulip as a salesman, later becoming midwestern sales manager. In 1937 he came upon a new invention, a machine that could mix five milk shakes at one time, called the "multi-mixer." Kroc founded his own company to serve as exclusive distributor for the product in 1941. Many years later, in 1954, Kroc heard of a drive-in restaurant in San Bernardino, California, owned by Richard and Maurice D. McDonald, which was operating eight of his multi-mixers. Curious as to how they could possibly use so many machines in a small establishment, Kroc found the brothers were doing a remarkable business selling only hamburgers, french fries, and milk shakes. Kroc, from his years in the paper cup and milk shake business, recognized a potential gold mine and approached the brothers about starting a franchise operation based on their restaurant, selling hamburgers for 15 cents, fries for 10 cents, and shakes for 20 cents. After some negotiation the McDonald brothers agreed. Under the arrangement, they would receive one-half of one percent of the gross, Kroc would use the McDonald name and concept, pledged to retain high levels of quality, and would retain their symbol—the golden arches. Ray Kroc opened the first of the chain of McDonald's restaurants on April 15, 1955, in Des Plaines, Illinois.

Small by today's standards, this restaurant in Des Plaines (now the world's first "Hamburger Museum") was a little red and white tile affair where root beer was poured from a wooden barrel, potatoes were peeled in the restaurant, and there were local supplies of fresh hamburger meat. The symbol, now long forgotten, was Speedee, a hamburger-bun-faced creature. On that first day, Kroc's restaurant had sales of $366.12. By 1961 there were over 130 outlets, and in that year Kroc bought out the McDonald brothers for $2.7 million. From these humble beginnings emerged an empire which by 1984 had 8,300 restaurants in 34 countries with sales of more than $10 billion.

Ray Kroc revolutionized the restaurant industry in much the same way that Henry Ford transformed the automobile industry a generation earlier. Kroc's great contribution was to figure out how to mass-produce food uniformly in astounding quantities, and then to convince millions of Americans that they needed to buy this food. To accomplish the first objective, Kroc reduced the food business to a science. Nothing was left to chance in the logistics of the McDonald's operations, which were carefully researched by sophisticated methods. The precision of the operation can be appreciated when it is understood that each McDonald hamburger was made with a 1.6 ounce beef patty, not more than 18.9 percent fat. It is exactly .221 inches thick and 3.875 inches wide. All other aspects of the operation are equally rigidly controlled. Kroc also relentlessly stressed quality, banning from his hamburgers such filler materials as soybeans.

The other side of the McDonald's success story is franchising, marketing, and advertising. Three-quarters of McDonald's restaurants are run by franchise-holders. By 1985 each franchise cost about $250,000 and ran for 20 years, after which it reverted to the company. When choosing franchise-holders, Kroc always looked for someone good with people. As he said," … we'd rather get a salesman than an accountant or even a chef." The franchise owners were then intensely trained at McDonald's "Hamburger University" in Elk Grove, Illinois, where a training course led to a "Bachelor in Hamburgerology with a minor in french fries." The company also provided a lengthy manual that outlined every aspect of the operation, from how to make a milk shake to how to be responsive to the community. The capstone of the McDonald's operation, however, was advertising. Hundreds of millions of dollars were poured into advertising—to the point where the head of another fast-food company said in 1978 that consumers were "so preconditioned by McDonald's advertising blanket that the hamburger would taste good even if they left the meat out."

Despite its astounding success, and despite the fact that the company worked hard to project a charitable and community-oriented image, McDonald's came under attack on several fronts. A number of communities refused to allow its restaurants in their area, seeing it (as one commented) as a "symbol of the asphalt and chrome culture." The company was also criticized for its extensive use of part-time teenaged help, and especially for the $200,000 which Kroc donated to Richard Nixon's re-election campaign, since the administration soon after recommended amending the minimum wage law to provide for a "youth differential." This would have allowed employers to hire teenagers at 80 percent of the minimum wage. The architecture of the buildings and the nutritional content of the food was assailed, although nutritionist Jean Mayer said that as "a weekend treat, it is clean and fast."

In the mid-1970s Kroc turned his energy from hamburgers to baseball, buying the San Diego Padres. He had less success at this, however, and in 1979 gave up operating control of the team, saying with his typical crustiness, "there's a lot more future in hamburgers than in baseball. Baseball isn't baseball anymore." In the years before his death he and his second wife, Joan, set up foundations to aid alcoholics and established Ronald McDonald houses to help the families of children stricken with cancer.

Kroc cut a commanding figure, his thin hair brushed straight back, his custom blazers impeccable, the bulky rings on his fingers glinting as he ate his hamburgers with both hands. Aware of his abrasiveness, he once commented: "I guess to be an entrepreneur you have to have a large ego, enormous pride and an ability to inspire others to follow your lead." He died in San Diego on January 14, 1984.

Further Reading

Kroc's autobiography, Grinding It Out (1978), is of some interest. A more critical perspective is provided by Max Boas and Steve Chain in Big Mac (1976). □

KROC, RAYMOND ALBERT

Raymond Albert Kroc (1902–1984)had the energy, the salesmanship, and the inspiration to build the greatest international restaurant chain empire in the world, McDonald's Corporation. He was a genuine pioneer of the modern fast-food restaurant business. He took the assembly-line methods of big industry and applied them to a restaurant franchise business that produced a small, standardized menu at low cost to the consumer. Kroc was a super salesman who, at age 52, bought "the golden arches" symbol and the name from the McDonald's brothers drive-in restaurant of San Bernardino, California, to build the McDonald's chain of restaurants. Based on the concepts of a limited menu of controlled quality and predictable uniformity, Kroc's restaurants operated on the credo of "quality, service, cleanliness, and value," and used a massive advertising campaign to promote itself.

In 1902 Kroc was born in Chicago, Illinois, the son of relatively poor parents. He went to public school in the Chicago suburb of Oak Park, but did not graduate from high school. Instead, he left school to open his own music store. When World War I (1914–18) began, Kroc lied about his age in order to serve as an ambulance driver for the American Red Cross (like his neighbor in Oak Park, author Ernest Hemingway).

Kroc, passionate about music as a young man, returned to Illinois after World War I to become a jazz pianist, playing with at least two well-known jazz orchestras. He also became the musical director of one of Chicago's pioneer radio stations, WGES.

Yet, in 1924, a restless Kroc, dissatisfied with the outlook for a career in music, decided to become a salesman. During a period of booming development in Florida, he left Chicago to try his hand at selling real estate in Fort Lauderdale. The boom collapsed in 1926, and Kroc returned to Chicago with his first wife and their child. In Chicago, Kroc became a salesman for the Lily Tulip paper cup company, where he later became Midwestern sales manager, and developed strong promotional and sales skills.

In 1937 Kroc ran into an invention that captured his imagination—a machine called a "multimixer" that could make five milkshakes at a time instead of just one. At a time when milkshakes were very popular, Kroc saw the potential in this invention. By 1941 he had left Lily Tulip and founded his own company to serve as the exclusive distributor for the multimixer. It was a successful business that made Kroc modestly wealthy, but it was not the one that would bring him legendary greatness as an entrepreneur.

Kroc became intrigued with one of his multimixer clients, the McDonald brothers, who owned a drive-in restaurant in San Bernardino, California. The brothers used eight of his mixers at once. A curious Kroc traveled to California in 1954 to find out why so many mixers were being used by this single drive-in.

Kroc discovered the brothers McDonald sold just three items: hamburgers, French fries, and milkshakes. Moreover, the "restaurant" only had walk-up windows. The McDonald brothers were specializing in the first "fast food" service.

Kroc marveled at the efficiency of the operation. He was certain he had stumbled on that "once in a lifetime opportunity." The McDonald brothers agreed with Kroc's suggestion that he should open a national chain of their restaurants. The energetic 52-year-old veteran salesman entered into a franchise arrangement with the brothers and in 1955 opened his first store in Des Plaines, Illinois. Kroc quickly opened many franchises and oversaw quality control with an iron hand. His practice of purchasing the land used by the franchises for their operations, not leasing, eventually made McDonald's one of the largest real estate owners in the world.

By 1971 Ray Kroc had bought out the McDonald brothers' share of the business and became the sole owner of McDonald's Corporation. Kroc publicized his business relentlessly using every kind of advertising. Early in his career as Chief Executive Officer (CEO) of the business Kroc said, "I put hamburgers on the assembly line." His stores were not restaurants. Instead they were designed for frequent customer turnover. He forbade the installation of telephones, jukeboxes, or anything that encouraged loitering in the establishment.

Kroc opened his "McDonald's University" in 1972, where every new franchise owner trained in McDonald food production techniques. The school became known as "Hamburger University."

The company used national advertising in every available medium during the 1960s, when McDonald's clown-spokesman, "Ronald McDonald," was born. Television advertising was aimed at both children and adults. The McDonald's brand name had an enormous impact on America's cultural fabric. The golden arches became the second most widely recognized trademark, behind Coca Cola.

The company is striking success. Some labor experts estimated that McDonald's was the first place of employment for one in fifteen Americans. Fast-food industry observers estimate that 96 percent of Americans have eaten at McDonald's at least once.

The company founded its international division in 1969. At the end of the twentieth century the international division provided 50 percent of McDonald's operating income, putting the "golden arches" into 85 countries, and adding $30 billion to its annual income.

McDonald's is also known for its philanthropy, including the creation of Ronald McDonald Houses, which provide live-in facilities for family members of seriously ill, hospitalized children. These residences, which are often near hospitals, have been a great help to the parents of the terminally ill.

In 1984 Ray Kroc died of heart failure at the age of 81. He was survived by his third wife. One of America's most successful entrepreneurs, Kroc is often thrust into the pantheon of American business world that includes Henry Ford, Andrew and Dale Carnegie, John D. Rockefeller, and J.P. Morgan.

See also: Assembly Line

FURTHER READING

Byers, Paula K., and Suzanne M. Bourgion, eds. Encyclopedia of World Biography. " Detroit: Gale Research, 1998, s.v. "Kroc, Raymond Albert.

Emerson, Robert L. The New Economics of Fast Food. New York: Van Nostrand Reinhold, 1990.

Kroc, Ray. Grinding it Out: The Making of McDonald's. Chicago: H. Regnery, 1977.

Love, John F. McDonald's: Behind the Arches. New York: Bantam Books, 1986.

Reiter, Ester. Making Fast Food: From the Frying Pan into the Fryer. Buffalo: McGill-Queen's University Press, 1991.

i put hamburgers on the assembly line.

raymond kroc

Kroc, Ray

American businessman
1902–1984

Raymond Albert Kroc was born in Oak Park, Illinois, to Luis and Rose Kroc. He had two younger siblings, Robert and Lorraine. As a child, his mother called Ray "Danny Dreamer" because he would daydream all the time. Rose Kroc was a piano teacher, and she taught young Ray to play.

Kroc's first job was with his uncle, Earl Edmund Sweet, in a soda fountain the summer before he started high school. The next summer Ray dropped out of school, and he used the money he made the previous summer to rent a building with two friends. They sold sheet music and small instruments, but after a few months the business failed.

During World War I, Kroc lied about his age and became an ambulance driver for the Red Cross. He returned to Chicago after the war and held various jobs, including work as a jazz pianist and as a real-estate salesman. In the summer of 1919, Ray played in a band at Paw-Paw Lake, Michigan, where he met his future wife, Ethel Flemming. Ray and Ethel married in 1922, but only after he satisfied his father's requirement of getting a steady job—selling paper cups for the Lily Tulip Cup Company, where he worked for seventeen years.

In the early 1940s, Kroc became the exclusive distributor of a multimixer that could mix five milk shakes simultaneously. Two of his best customers were the McDonald brothers, Richard and Maurice (Mac), who bought eight of the mixers for their fast-food restaurants. The McDonalds had started with a group of hot-dog carts, and now had a chain of restaurants—for which Richard McDonald designed the "golden arches" logo and the "number-of-hamburgers-sold" sign.

In 1954, Kroc went to San Bernardino, California, to see the McDonald brothers' restaurant, which used an assembly-line format to prepare foods. Kroc decided to set up a chain of drive-in restaurants based on the McDonalds' format and convinced the brothers to sell him the rights to franchise McDonald's restaurants nationwide. His first restaurant opened on April 15, 1955, in Des Plaines, Illinois. Kroc also began selling franchises on the condition that the owners managed their restaurants. Kroc was known for his obsessive cleanliness, and he wanted the restaurants kept very clean. In 1961, Kroc bought out the McDonald brothers for $2,700,000. At this time he had established 228 restaurants, and sales had reached $37,000,000. By 1963 more than 1 billion hamburgers had been sold.

Kroc served as the company's president from 1955 to 1968, as chairman of the board from 1968 to 1977, and as a senior chairman from 1977 until his death. He also was the owner of the San Diego Padres professional baseball team. Kroc died on January 14, 1984, in San Diego, California. He is remembered as a pioneer in the fast-food industry, and was named as one of Time magazine's "Builders and Titans" of the twentieth century.

McDonald's Worldwide

By 2004, McDonalds had become a $40 billion global enterprise with more than 30,000 restaurants in 120 countries and more than half its sales outside the United States. International outlets are adapted to local cultures. In Saudi Arabia, for example, single men are seated separately from women and children. Indian McDonald's restaurants serve no beef or pork, but feature instead such menu items as a Chicken Maharaja Mac, a Paneer Salsa Wrap, and a McAloo Tikki Burger. In Japan, where the "r" sound is difficult, Ronald McDonald goes by the name Donald McDonald. As the chain faces slowing sales in a mature domestic market, the pace of its international expansion has increased. In China, where there are already 500 McDonald's, the chain plans to open more than 100 new branches a year. The company has become a major employer worldwide, with more than 1 million employees. However, despite (or because of) its international success, McDonald's has frequently come under attack as a symbol of American cultural imperialism. In 2000, anti-globalization protesters in a French farm town smashed windows in a half-built McDonald's franchise, highlighting the struggle between small farmers and big business in the global agriculture market. And after the United States began bombing Afghanistan in 2001, McDonald's outlets in Pakistan and Indonesia were vandalized. Attacks on McDonald's have been recorded in more than 50 countries.

—Paula Kepos

see also Dietary Trends, American; Fast Foods.

Delores C. S. James

Bibliography

Kroc, Raymond, A. (1977). Grinding It Out. Chicago, IL: Contemporary Books.

Schlosser, Eric (2001). Fast Food Nation: The Dark Side of the All-American Meal. New York: Houghton Mifflin.

Internet Resources

Britannica.com (2001). "Kroc, Ray." Available from <http://www.britannica.com>

Pepin, Jacques. (2000). "Ray Kroc." Available from <http://www.time.com/time>

KROC, RAYMOND A. 1902-1984

Fast-food magnate

Early Career

Few millionaires begin a worldwide empire with a paper cup. But Raymond A. Kroc, who had sold Lily cups for almost twenty years, started just that way. Kroc spent much of his early life as a paper-cup salesman until, in 1941, he abandoned cups for the milk-shakes that went in them. He joined the Mult-A-Mixer company, which produced multiple-milkshake mixers for restaurants. When he visited the McDonald Brothers hamburger stand owned by Dick and Mac McDonald in San Bernardino, California, in 1954, Kroc saw a mass-production operation—using his Mult-A-Mixers in sets—that no one else had developed. Kroc was impressed by the McDonalds' procedures for food preparation: "each step was stripped down to its essence and accomplished with a minimum of effort." Kroc reasoned that by combining the fast service offered at McDonald Brothers with his Mult-A-Mixers and disposable eating utensils (exemplified by his paper cups), a new type of restaurant could be created. He signed an agreement with the McDonalds, acquiring virtually all of their business, including their name. Kroc said "visions of McDonald's restaurants dotting crossroads all over the country paraded through my brain."

Franchising

The key, Kroc thought, to spreading McDonald's product to the American consumer lay in consistent recipes—which he had acquired with the McDonald's name in 1960—and similar, predictable restaurants across the country. He could only guarantee that consistency by selling the rights to do business under the McDonald's name with the condition that the restaurant use McDonald's recipes, meet the company's standards, and utilize its national advertising and marketing. Kroc accomplished that through franchising, wherein the local owners pay a fee to the company for the use of the product (the burgers and french fries, in McDonald's case) and for its training, advertising, and corporate support. Franchising was not a new idea—A & W Root Beer and Howard Johnson's restaurants and motels had used franchising for years—but in the hands of Kroc led to a "burger boom" that took hold in the 1960s.

The Empire

From 1955 to 1977 Kroc created a vast empire of hamburger stands bearing the McDonald's name and featuring predictable fare at low prices. Kroc took making hamburgers and fries seriously: he established a "Hamburger University" to train managers and employees of McDonald's, demanding of his "burger flippers" a commitment to excellence. He ventured into sports ownership by purchasing the San Diego Padres baseball team and serving as its chairman from 1974 until his death ten years later. Kroc told his story in Grinding It Out: The Making of McDonald's (1977).

Sources:

Ray Kroc, Grinding It Out: The Making of McDonald's (Chicago: Regnery, 1977);

John F. Love, McDonald's: Behind the Arches (Toronto & New York: Bantam, 1986).

Ray Kroc (Raymond Albert Kroc), 1902–84, American fast-food restauranteur and franchiser, b. Chicago. Kroc held several jobs before becoming (1937) the distributor for a blender that simultaneously prepared several milkshakes. Visiting a small but profitable San Bernadino, Calif., restaurant owned by brothers Mac and Dick McDonald, he was impressed by the fast assembly-line fashion preparation of burgers, fries, sodas, and shakes. Kroc acquired the business's franchising rights and in 1955 founded the McDonald's Corp. Six years later he bought out the brothers. Using quality, service, cleanliness, and value as a commercial mantra, and maintaining strict uniformity of product, McDonald's grew quickly, as franchises opened throughout the country and menu items were gradually added. Kroc served as president (1955–68), chairman of the board (1968–77), and then senior chairman until his death. By then, McDonald's had changed America's eating habits, with more than 7,500 restaurants in operation and annual sales topping $8 billion.

Bibliography: See his Grinding It Out: The Making of McDonald's (1977, repr. 1990).