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Ray Kroc

McDonald's begat an industry because a 52-year-old mixer salesman understood that we


don't dine - we eat and run
Howard Johnson's or HoJo's, a great American fast-foot brand had been started in 1925 in
Massachusetts by Howard Deering Johnson, and by the mid-1960s its sales exceeded that of
Burger King, Kentucky Fried Chicken and McDonald's combined. There would be more than
1,000 Howard Johnson restaurants and 500 motor lodges. Yet after Johnson's death in 1972, the
company lost its raison d'etre. The restaurants became obsolete; the food quality deteriorated. You
underestimate the clientele at your peril. The late restaurateur Joe Baum used to say, "There is no
victory over a customer."
Philosophy shapes up
As the Howard Johnson Company went to pieces, Ray Kroc's obsession with Quality, Service,
Cleanliness and Value - the unwavering mission of McDonald's - was gathering momentum. Kroc
was adroit and perceptive in identifying popular trends. He sensed that America was a nation of
people who ate out, as opposed to the Old World tradition of eating at home. Yet he also knew
that people here wanted something different. Instead of a structured, ritualistic restaurant with
codes and routine, he gave them a simple, casual and identifiable restaurant with friendly service,
low prices, no waiting and no reservations. The system eulogized the sandwich - no tableware to
wash. One goes to McDonald's to eat, not to dine.
Kroc gave people what they wanted or, maybe, what he wanted. As he said, "The definition of
salesmanship is the gentle art of letting the customer have it your way." He would remain the
ultimate salesman, serving as a chairman of McDonald's Corp., the largest restaurant company in
the world, from 1968 until his death in 1984.
Early years
In 1917, Ray Kroc was a brash 15-year-old who lied about his age to join the Red Cross as an
ambulance driver. Sent to Connecticut for training, he never left for Europe because the war
ended. So the teen had to find work, which he did, first as a piano player and then, in 1922, as a
salesman for the Lily Tulip Cup Co.
Although he sold paper cups by day and played the piano for a radio station at night, Kroc had an
ear better tuned to the rhythms of commerce. In the course of selling paper cups he encountered
Earl Prince, who had invented a five-spindle multimixer and was buying Lily cups by the
truckload. Fascinated by the speed and efficiency of the machine, Kroc obtained exclusive
marketing rights from Prince. Indefatigable, for the next 17 years he crisscrossed the country
peddling the mixer.
On his travels he picked up the beat of a remarkable restaurant in San Bernardino, Calif., owned
by two brothers, Dick and Mac McDonald, who had ordered eight mixers and had them churning
away all day. Kroc saw the restaurant in 1954 and was entranced by the effectiveness of the
operation. It was a hamburger restaurant, though not of the drive-in variety popular at the time.
People had to get out of their cars to be served. The brothers had produced a very limited menu,
concentrating on just a few items: hamburgers, cheeseburgers, french fries, soft drinks and milk
shakes, all at the lowest possible prices.

Mixer salesman becomes an entrepreneur


Kroc, ever the instigator, started thinking about building McDonald's stores all over the US - each
of them equipped with eight multimixers whirring away, spinning off a steady stream of cash. The
following day he pitched the idea of opening several restaurants to the brothers. They asked,
"Who could we get to open them for us?" Kroc was ready: "Well, what about me?"
The would-be Great War veteran would grow rich serving the children of World War II vets. His
confidence in what he had seen was unshakable. As he noted later, "I was 52 years old. I had
diabetes and incipient arthritis. I had lost my gall bladder and most of my thyroid gland in earlier
campaigns, but I was convinced that the best was ahead of me." He was even more convinced
than the McDonalds and eventually cajoled them into selling out to him in 1961 for a paltry $2.7
million.
The growth
He was now free to run the business his own way, but he never changed the fundamental format
that had been devised by the brothers. Kroc added his own wrinkles, certainly. He was a demon
for cleanliness. From the overall appearance, to the parking lot, to the kitchen floor, to the
uniforms, cleanliness was foremost and essential. "If you have time to lean, you have time to
clean," was one of his favorite axioms. He was dead on, of course. The first impression you get
from a restaurant through the eyes and nose is often what determines whether you'll go back.
By 1963 more than 1 billion hamburgers had been sold, a statistic that was displayed on a neon
sign in front of each restaurant. That same year, the 500th McDonald's restaurant opened and the
famous clown, Ronald McDonald, made his debut. He soon became known to children
throughout the country, and kids were critical in determining where the family ate. According to
John Mariani in his remarkable book America Eats Out, "Within six years of airing his first
national TV ad in 1965, the Ronald McDonald clown character was familiar to 96% of American
children, far more than knew the name of the President of the United States."
With restaurants in more than 114 countries, McDonald's still represents Americana. When I
return to France, my niece's children, who are wild about what they call "Macdo," clamor to go
there. It has a somewhat snobbish appeal for the young, who are enamored of the American
lifestyle. said a leading American journalist.
Still, it's likely Ray Kroc would have moved on to something else if he had found a better idea.
Even after McDonald's was well established, Kroc still tried, often with dismal results, to move
forward with upscale hamburger restaurants, German-tavern restaurants, pie shops and even
theme parks, like Disneyland. He always had a keen sense of the power of novelty and a strong
belief in himself and his vision.
Like many of America's great entrepreneurs, Kroc was not a creator - convenience food already
existed in many forms, from Howard Johnson's to White Castle - but he had the cunning ability
to grasp a concept with all its complexities and implement it in the best possible way. And,
that's the very essence of being a good entrepreneur, a good business leader, and a visionary.