The Way It Was: Ray Kroc

By May 18, 2008The Way It Was

Back in 1954, Ray Kroc was a 52 year old milkshake machine salesman on his way to visit clients in San Bernardino, about 55 miles east of Los Angeles, where he experienced what can only be termed a true creative vision.

His clients were a couple of guys named McDonald who operated a squeaky clean restaurant churning out hamburgers, fries, shakes – nine menu items in all – for rock bottom prices. Kroc saw the future then and there. “I felt like some latter day Newton who’d just had an Idaho potato caromed off his skull,” he said later.

He talked the McDonalds brothers into letting him franchise their concept, though they were highly skeptical. He set out to replicate their restaurant and its products carefully, making sure every franchise was just like every other franchise.

But it didn’t come easy. Kroc’s original franchise plan made money for the franchises, but very little for Kroc. He resolved his dilemma by going into real estate – buying or leasing store sites and then subleasing them to franchisees at inflated prices. By controlling the leases, he also controlled his managers and their products. He was able to set up a nationwide hamburger assembly line.

In 1984, Ray Kroc died at 81, just a few months before McDonald’s sold its 50 billionth hamburger. A year later, when the value of McDonalds $4 billion real estate portfolio passed Sears, the New York Stock Exchange added McDonalds to the Dow.

Join the discussion 4 Comments

  • Paul Brown says:

    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.

  • 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

  • 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 as a salesman

  • Mary says:

    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.

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