Ray Kroc

Ray Kroc
1902 – 1984

Began McDonald's Corporation franchise in 1954

He partnered with the McDonald brothers to open and franchise additional McDonald's restaurants. Kroc eventually became frustrated with the brothers' willingness to accept their chain having only a handful of restaurants. In 1961, he purchased the company from the brothers. The agreement was for the McDonald's to receive $2.7 million for the chain and to continue to receive an overriding royalty of 1.9% (when negotiating the contract the McDonald brothers said that 2% sounded greedy, 1.9% was much more attractive) on the gross sales.

The agreement was a handshake with split agreement between the parties because Kroc insisted he could not show the royalty to the investors he had lined up to capitalize his purchase. At the closing table Ray became very annoyed that the brothers would not transfer to him the real estate and rights to the original unit. The brothers had told Kroc that they were giving the operation, property and all, to the founding employees. Kroc closed the transaction, then refused to acknowledge the royalty portion of the agreement because it wasn't in writing. The McDonald brothers consistently told Ray that he could make changes to things like the original blueprint (building codes were different in Illinois than in California), but despite Ray's pleas, the brothers never sent any formal letters which legally allowed the changes in the chain. He also opened a new McDonald's restaurant near the McDonald's (now renamed "The Big M" as they had neglected to retain rights to the name) to force it out of business.

Ray Kroc created a new kind of fast food with McDonald's, implementing Henry Ford's assembly line idea into his restaurants. He also utilized standardization, a business tactic that he used to make sure that every Big Mac would taste the same whether a person is in New York or Tokyo. Kroc also knew, for the most part, what the people wanted, which was standardized hamburgers. However one of his most famous flops was the Hulaburger, which consisted of a slice of grilled pineapple, with some cheese, on a bun. This was to appeal to Catholics who gave up beef during Lent. Kroc also revolutionized the art of franchising, where he set strict rules on how the food was made, but as for the marketing of the product, however, he let the franchisees decide on what the best approach was. For example, an actor named Willard Scott created the internationally recognized figure known as Ronald McDonald to improve sales of hamburgers in the Washington, D.C. area.

Kroc established various foundations for alcoholics, and also started the Ronald McDonald House foundation.

Source: wikipedia.org