UK: Business Legends Old McDonald had a great idea.

UK: Business Legends Old McDonald had a great idea. - Were it not for a highly efficient blender, two brothers and a Raymond Kroc's cranial bumps we might all still be eating amorphous, non-standardised hamburgers.

by Rhymer Rigby.
Last Updated: 31 Aug 2010

Were it not for a highly efficient blender, two brothers and a Raymond Kroc's cranial bumps we might all still be eating amorphous, non-standardised hamburgers.

Phrenology - predicting an individual's aptitudes from the shape of the skull - was fast falling into disrepute by the turn of the century.

Thus, a phrenologist's 1906 diagnosis of the man behind McDonald's must be one of the calling's last great triumphs. After running his hands over four-year-old Raymond Kroc's cranium, the doctor opined that the child's future lay in the food services sector.

To be fair, the phrenologist's prediction took its time bearing fruit.

At 15, Kroc drove ambulances, with stints as a jazz pianist and an estate agent following. After these, he began a 30-year career as a salesman, touting paper cups and other sundries to America's budding fast food industry.

By the 1940s, he had become the exclusive distributor of the Multimixer, a wondrous blender whose USP was its ability to churn five milkshakes simultaneously. One day in 1954, Kroc, then 52, went to visit two of his best customers, Maurice and Richard McDonald. The duo had purchased a staggering eight Multimixers for their eponymous restaurant in San Bernadino, near Los Angeles.

What Kroc saw in the sleepy desert town astounded him. No stranger to shoddy, down-at-heel burger shacks and drive-thrus, he knew that this operation was different: the restaurant was clean, modern, inexpensive and (mirabile dictu) boasted a basic burger production line. In his autobiography, Kroc recalls, 'I felt like some latter-day Newton, who'd just had an Idaho potato caromed off his skull'. Thus, the following day, he approached the brothers McDonald and, after much cajoling, came to an arrangement whereby he would sell franchises for $950 apiece and 1.4% of sales while the brothers would receive 0.5% of sales. Surprisingly, this was a deal which much favoured the brothers - Kroc had to do everything, their cut was, so to speak, money for jam.

In 1955, Kroc opened the first new store and quickly became obsessed by the business which spawned his oft-quoted diktat, 'I believe in God, family and McDonald's - and in the office that order is reversed'. Competing chains abounded but McDonald's was different: Kroc sought total uniformity, with burgers absolutely identical, no matter where they were sold. The company's franchises soon flourished, spreading across the American heartland like a red and yellow rash. But there was a problem: while the franchisees made out like bandits, the parent company was so impecunious that it occasionally had to give away tranches of shares in lieu of decent salaries. Worse still, Kroc's relationship with the brothers was on the rocks and, as the 'Big Kroc' didn't have the right ring, he needed $2.7 million to buy them out. By 1961 (when incidentally, his wife, sick of playing second fiddle to fast food, divorced him), Kroc's future looked bleak.

However, Harry Sonneborn, McDonald's money man, found a solution - by going into property, the company could reap handsome rewards. Quite simply, it would buy or lease promising sites and let them to franchise holders at a profit. This policy also had the gratifying side effect of concentrating power back to the centre. The scheme was a masterstroke and, with finances stable, Kroc set about promoting, advertising and homogenising his vision.

Over the next few years the Hamburger University course was founded, Ronald McDonald was born and, in 1965, the business floated using the cash raised to fund its drive for supremacy. Kroc suddenly found himself in the limelight, hailed as a great businessman and reviled as a purveyor of garbage in equal measure.

In 1984, 10 months before its 50 billionth burger sale, Ray Kroc died, aged 81. In 1985, McDonald's place in the American corporate landscape was assured when its size took it into Wall Street's Dow Jones Index. Twelve years on, the chain boasts around 20,000 restaurants, employing over 200,000 people. Whether Kroc's legacy constitutes a global empire, affordable family eating and a great brand or urban blight and untold junk-food junkies depends on which side of the McLibel fence you sit. What cannot be disputed is the business acumen of the man whose company has sold 20 burgers for every one of the earth's inhabitants.

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