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). □
