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In 1930, brothers Dick and Mac moved to Hollywood to work in the
They didn't succeed, so they opened a drive in restaurant in
By 1940, they were splitting $50,000 a year in profit (a very
high income back then).
In 1948, they streamlined the menu to reduce costs and increase
speed of service. It worked, and by 1950 they were splitting
$100,000 a year in profit (a fortune back then).
Their efficiency in the kitchen and with food systems was sheer
People from all over visited to see how their operation worked
and study their management methods. They also received 300 calls
and letters per month.
You've probably never heard of Dick and Mac, but you know their
last name - McDonald.
What you probably don't know is how they failed when they tried
to franchise their fast food restaurants.
In 1952, Dick and Mac McDonald started marketing the McDonald's
concept but sold only 15 franchises,10 of which never opened.
While they were great managers, they were not great leaders.
In 1954, a milkshake machine salesman heard that the McDonald
brothers’ hamburger stand was running eight of his milkshake
“Multimixers” at one time. He had already mortgaged his home and
invested his entire life savings to become the exclusive
distributor of the Multimixer, and saw an opportunity.
He packed up his car and headed to California like the Beverly
Hillbillies, but without money.
His name was Ray Croc and he figured that if he could get Dick
and Mac to open more restaurants, he could sell eight
Multimixers to each.
When Dick asked who they could get to open them, Ray answered,
"What about me?"
He opened his first one in the Chicago area in 1955, and his
first day's revenue was $366. He then opened 100 new McDonald’s
over the next 4 years, and opened 500 over the following 4
years. He eventually bought all rights to the McDonald’s name
for $2.7 million.
Today McDonald's has over 35,000 locations in 119 countries,
serving 68,000,000 customers a day.
So what allowed Ray Croc to do what the McDonald brothers
They were great managers, but he was a great leader, great
salesman, and great marketer.
To Your Success in 2015,
P.S. While the press loves to beat up on McDonald's,
I'm their biggest fan. And YES, I love their food. They're one of
the best managed companies in the world and continue to be
cutting edge with innovative ideas to improve every aspect of
P.P.S. In the interest of disclosure, I must state
that many McDonald's managers and franchisees have attended my
seminars and bought my products. However, my
comment in the P.S. would be the same even if they hadn't.
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