In the 1940s, the brothers Dick and Mac McDonald owned a small restaurant for motorists. It was located in California, San Bernardino. Business was not bad, bringing up to 200 thousand dollars a year in revenue. However, the brothers decided not just to improve it slightly, but to develop an absolutely new concept. It was based on fast service, low prices and a large volume of products. If earlier the menu for a barbecue consisted of 25 dishes, now there are only 9 left.
For the customers themselves put something off the counter: a hamburger, a cheeseburger, chips, patties, three kinds of soft drinks, milk and coffee. Soon to this list were added milkshakes and french fries. To implement the new project, the kitchen was remade, where all the equipment was now made of stainless steel. There you can now quickly and a lot of cooking. This allowed cutting the low price of hamburgers – from 30 cents to 15.
In December 1948, a new restaurant for the McDonald Brothers was opened. True, it took some time to promote it. But in a few years it turned out that the spirit of the post-war period was definitely captured. A small factory for the production of hamburgers brought an annual profit of 350 thousand dollars. An innovative approach could double the number of visitors. At peak hours, around 150 visitors crowded around a small stand with hamburgers.
About the successful method of trading in 1952 wrote the magazine American Restaurant Magazine. As a result, the brothers began to receive up to 10 requests a day with a request to share a secret. The first licensee was also Neil Fox, who kept a restaurant for car enthusiasts in Arizona. The brothers decided that this institution would be the first experience in creating a whole network. This building with a sloping roof and lined with red and white tiles, with golden arches in front of the entrance has become a classic example for the first wave of McDonald’s restaurants.
To start the process in a new place, Dick and Mack crawled along the tennis court, chalking out the kitchen design. It was studied even the movement of employees in the preparation of dishes, this made it possible to most effectively place the equipment. Mel was washed away by rain, the brothers had to draw again, improving the design. The restaurant was very successful, and the McDonald brothers became pioneers of franchising.
For a thousand dollars, they offered their licensees the brand name McDonald’s, a basic description of the rapid service system. For a couple of weeks, Art Bender, who was the first employee of the brothers in their restaurant, was sent to the restaurant. This employee helped the licensees to work. In 1954, the new system came under the attention of the usual traveling salesman Ray Crocus. Tom was already 52 years old. The pension seemed to be around the corner.
However, Krok was able to found a company that is known today as McDonald’s. It was a rather unusual person. He dropped out of school at the age of 15 and went to the First World War. Krok was a dreamer who was constantly looking for new products for sale. He started with paper glasses in Chicago, then he had real estate in Florida, and he got to McDonald’s restaurant in San Bernardino, being the exclusive distributor of machines for making cocktails.
Krok became interested in how the brothers managed to sell as many as 20 thousand servings of cocktail per month. Appearing in this institution in the morning and saw how quickly the turn of buyers of burgers and potatoes moves, the traveling salesman realized that such a system would work everywhere.
The McDonald Brothers themselves did not want to engage in global control over the expansion of the licensing business around the country, trusting Ray Crocus. On March 2, 1955, he founded a new franchise company, McDonald’s Systems, Inc. Already on April 15, 1955 McDonald’s restaurant appeared in Des Plaines, Illinois. There, the first hamburger introduced Art Bender, only this time the product belonged to Ray Krack.
Bender retired, owning as many as seven establishments.Krok managed to preserve the basic principles of the structure of the brothers – a limited menu, quality food, production with an assembly line, fast service. In addition to this, standards of cleanliness were added. Knowledge of a traveling salesman in franchising helped Crocus create a whole system.
By agreement with the McDonald brothers, they received from Krok to $ 950 for each new restaurant and a small portion of the turnover. The company began to buy or rent real estate of its restaurants, which provided a competitive advantage. Krok tried to ensure that licensees constantly increased their turnover. After all, their failure left an imprint on the company. Thanks to the ability to negotiate, Crock persuaded suppliers, managers, and creditors. He was so absorbed in his mission that until 1961 he worked for free.
By the beginning of 1957, 14 McDonald’s restaurants had sold 50 million hamburgers, the turnover was $ 1.2 million. And after 4 years there were already 228 such establishments that sold 400 million hamburgers for $ 37.6 million. Krok understood that for further development he needed to buy business from the McDonald brothers. After all, Krok’s net profit was only 77 thousand dollars a year, with debts of 5.7 million.
The brothers asked for 2.7 million dollars, of which 700 thousand would have gone as taxes. Such was the price for the invention of the fast service industry. Crock took a loan secured by real estate of his company, the loan payment cost him as a result of 14 million dollars. But now the growing system was in the hands of one master.
The basis for growth in the US has become turnover, an extensive network of restaurants, a number of hamburgers and the establishment of high quality standards. In 1963, live on a TV show, Ray Crock sold a billion burger. In 1965, in honor of the 10th anniversary of the company, a national licensee meeting was held in Florida. In the same year, McDonald’s became a joint-stock company, entering the market with shares of $ 22.5. In just a few weeks, these papers have doubled their value.
The work of Ray Crocus without pay has borne fruit. He immediately became a multimillionaire. And in 1966 the company appeared on the lists of the New York Stock Exchange, which was an important step for the restaurants that sell hamburgers. In 1967, the first increase in prices occurred – the main dish grew in price from 15 to 18 cents. But in 1968, opened a thousand-dollar restaurant in Des Plaines, not far from the first institution Crocus.
By 1970, there were 1600 restaurants, they were present in 50 states and 4 countries. Turnover reached 587 million dollars. In a couple of years, a billion mark was exceeded on this indicator. In 1975, opened the first McAvto restaurant, the turnover of more than 3,000 companies amounted to 2.5 billion dollars. At the same time, the company sold a 20 billion burger. In 1977, Ray Crock became the company’s senior chairman, and Fred Turner became chairman of the board. Once he worked on the grill in the first institution of Krok.
In 1980, the company owned 6,263 restaurants in 27 countries. They sold more than 35 billion hamburgers and provided a turnover of 6.2 billion. January 14, 1984, died Ray Crock, having done everything planned with his company. By 1990, trade reached 18.7 billion, and in 54 countries there were already 11,800 institutions.
The history of McDonald’s development in other countries was not so smooth. There were unsuccessful starts in Holland, and in the Caribbean. Managers tried to adapt the menu to local realities, until they understood a simple thing – what works well in the US will work everywhere. An important part of the success was a strong partner, prepared for business. Japan became a vivid example.
In 1971, as a partner of McDonald’s, he became an importer of clothes, shoes and bags of Den Fujita.The first institution appeared in 1971 on a tiny area of 50 square meters in the heart of Tokyo. It took only 39 hours to build it instead of the traditional 3 months. On the first day of work, the restaurant sold the goods for 3 thousand dollars, and in late 1993, McDonald’s became the most successful network of restaurants in the country with 2300 points.
In the same 1971, restaurants were opened in Germany and Australia, in France and England “McDonald’s” appeared in the early 1970s. More than 600 restaurants of the American brand are open in each of these countries. It is Canada, Japan, France, Germany, England and Australia and are known as the big six McDonald’s, providing 80% of all profits outside the US. The appearance of a sales outlet in Russia caused a real boom. The institution of 2200 square meters on the first day visited more than 30 thousand people, which became a true record. But negotiations on the opening of such a restaurant have been conducted since 1976.
The opening of McDonald’s in Beijing in April 1992 set a new record of 40,000 visitors a day. The restaurant chain became popular in Eastern Europe, and they opened in the Middle East. There, food is prepared in accordance with Islamic laws. In Saudi Arabia, there are also no posters with the image of the clown Ronald, since Islam forbids images of idols. And in 1995, the first kosher McDonald’s appeared in Jerusalem.
So the increase in the number of institutions around the world confirmed the correctness of Ray Crocus, who understood the universality of the service formula. Today, the net profit of the trading network is more than $ 5 billion per year, and about 700,000 people work at McDonald’s.