Today, April 15, 2008, I would like to share a few highlights from an autobiography written by Ray Kroc with Robert Anderson. The title of the book is Grinding It Out, The Making of McDonald's. Originally published in 1977, Grinding It Out is the personal "rags to riches" story of how Ray Kroc at the age of 52 founded the McDonald's hamburger franchise chain and built it into the "Golden Arches" known in almost every corner of the world. I chose today to share this book because, on April 15, 1955, Ray Kroc with the help of others, opened his first Mcdonald's in Des Plaines, Illinois. I guess, you could say today is the anniversary of McDonald's as we know it today.
...I had one close friend who was quite interested in the venture. He had a son-in-law named Ed MacLuckie who was looking for a job and who had expressed a liking for the food service business. Ed was working a wholesale hardware territory over in Michigan at the time and it was not going well. So I talked to him...I hired him as a manager of my first store. Art Bender, the McDonald brothers' manager, came to Des Plaines and helped Ed and me open that store on April 15, 1955. It was a hell of an ordeal, but the experience was to prove invaluable in opening other stores. (pgs. 70-71)
I must admit, I'm not a huge fan of any menu items offered by the local McDonald's here on Long Island. That's not to say I haven't experienced McDonald's. Like most, I have. Admittedly, I never gave much thought to the person behind the McDonald's enterprise which is probably an error on my part. Perhaps, since the food doesn't agree with me, I haven't been fair in the judgement of how Ray Kroc brought his dream to life. From the preface by Paul D. Paganucci, Darmouth College:
Every now and then a unique and vibrant personality like Ray A. Kroc comes along, a flesh and blood example of a Horatio Alger story, who illustrates in practice what one is preaching and who repudiates the laments entirely. Grinding It Out, Ray Kroc's autobiography and the history of McDonald's Corporation is a dramatic refutation of all who believe that risk takers will no longer be rewarded. It reminds us that opportunity abounds, that all one needs is the knack of seizing the chance that exist, of being in the right place at the right time. A Little bit of luckhelps, yes, but the key element, which too many in our affluent society have forgotten, is still hard work-grinding it out...Grinding It Out will be uniquely valuable to those who aspire to build their own enterprise, whether the potential founder is in his or her late teens, early fifties, or at any age in between.
By comparison, the characters found in many of the dime novels written by the American author Horatio Alger certainly illustrate the achievements possible with hard work, determination and courage. However, Alger's characters do not typically achieve extreme wealth; rather they attain middle class security, stability, and an almost solid reputation within society which isn't the case with Ray Kroc. Within the signatures of Ray Kroc's book, the tone of Horatio Alger's cultural and social ideals fester deep and yet they are hidden. The lives of the two men are unparalleled. Ray Kroc was born in Oak Park, just west of Chicago's city limits in 1902. His father left school when he was in the eighth grade but managed to capture a job as a Western Union employee when he was 12 years old. He had slowly worked his way up through the ranks of the company but instilled in his children the need for a complete and higher education. Ray Kroc admits, "I was the wrong kid for that." Alger's father was a stern Unitarian minister who wanted his son to follow him into the religious world. He was tutored at home by his father until the age of ten, when he was admitted to the Gates Academy in Marlborough, Massachusetts. A year after graduating from Gates, he was admitted to Harvard at age 16. For the next four years, he studied under Henry Wadsworth Longfellow with the intention of one day becoming a poet. After graduating, he devoted himself to teaching and writing, with uneven success. Kroc's success was "born" by experimentation while Alger's was steeped in observation. Ray Kroc in Grinding It Out:
They called me Danny Dreamer a lot, even later when I was in high school and would come home all excited about some scheme I'd though up. I never considered my dreams wasted energy; they were invariably linked to some form of action. When I dreamed about having a lemonade stand, for example, it wasn't long before I set up a lemonade stand. I worked hard at it, and I sold a lot of lemonade. I worked at a grocery store one summer when I was still in grammar school. I worked at my uncle's drug store. I worked in a tiny music store I'd started with two friends. I worked at something whenever possible. Work is the meat in the hamburger of life. (pg 15)
Alger's early life revolved around education and teaching. He eventually came to the conclusion that he liked neither for his purpose. Instead, in 1866, he moved to New York City, which proved to be a turning point in his career. He was immediately drawn into the world of impoverished young bootblacks, newspaper boys, and peddlers. He spent much time of his time with young men and often ate his meals and slept at the Newsboys' Lodging House. Alger's empathy with the young working men, coupled with the moral values he learned at home, formed the basis of his first novel Ragged Dick. The book was an immediate success, spurring a vast collection of sequels and similar novels. From the Preface Ragged Dick; or Street Life in New York with the Boot-Blacks:
Several characters in the story are sketched from life. The necessary information has been gathered mainly from personal observation and conversations with the boys themselves. The author is indebted also to the excellent Superintendent of the Newsboys' Lodging House, in Fulton Street, for some facts of which he has been able to make use. Some anachronisms may be noted. Wherever they occur, they have been admitted, as aiding in the development of the story, and will probably be considered as of little importance in an unpretending volume, which does not aspire to strict historical accuracy. source
The story of McDonald's didn't actually begin with Ray Kroc. Its historic "rebirth" may have been nurtured and sometimes demanded by him but, it was also the vast numbers of people who contributed their time, energy and ideas that propelled the McDonald's franchise. It was also Ray Kroc's firm belief in himself and his product, whatever that product was, milk shake machines or paper cups, that made his investment worthy in the making of McDonald's. And, a little bit of luck.
In the early 1930's in Southern California there developed a remarkable phenomenon in the food service business. It was the drive-in-restaurant, a product of the Great Depression's crimp on the free-wheeling lifestyle that had grown up around movie-happy Hollywood. Drive-ins sprouted in city parking lots and spread along highways and canyon drives...Aspiring starlets worked as carhops, glad of any opportunity that would help them pay rent and exhibit their charms at the same time...One of them had his girls zooming around his parking lot on roller skates...Into that strange scene came my future mentors in the hamburger business, the McDonald brothers, Maurice and Richard, a pair of transplanted New Englanders. Maurice had moved out to California in about 1926 and got a job handling props in one of the movie studios. Richard joined him after he was graduated in 1927.
The above is an excerpt from chapter 6 of the book. It details the shrewd innovative mind of Ray Kroc and the journey which begins his career as "Hamburger King." He quickly picks up on the possibilities of a drive-in hamburger restaurant. "Of course, the simplicity of the procedure allowed the McDonalds to concentrate on quality in every step, and that was the trick" he wrote. In 1954, he approached the brothers with the idea of opening a lot of similar restaurants for them. Surprisingly, the notion fell upon him not because of the profit hamburgers could produce but because he saw it as a way to sell more multimixers. Admittedly, Ray Kroc never thought to simply copy the McDonald's brothers plan, the idea never crossed his mind. Before long, they drew up an agreement. During the course of negotiations, Kroc learned the two brothers had licensed 10 other drive-ins. He had no interest in them but he wanted franchise rights to their operations everywhere else in the U.S. The buildings would have to be exactly as theirs including the newly drawn up plan for the golden arches. The name McDonald's would remain to his satisfaction. "I had a feeling that it would be one of those promotable names that would catch the public fancy" he wrote. He agreed with the contractual clauses that obligated him to follow their plans right down to the last detail including signs, menus and unit plans. "I should have been more cautious" he wrote.
This seemingly innocuous requirement created a massive problem for me. There's an old saying that a man who represents himself has a fool for a lawyer, and it certainly applied in this instance. I was just carried away by the thought of McDonald's drive-ins proliferating like rabbits with eight multimixers in each one...The meeting was extremely cordial. I trusted them from the onset. That trust later would turn to blinding suspicion. But I had no inkling of that eventuality.
The agreement gave him 1.9 percent of the gross sales from franchisees. He had tried to get 2 percent but the brothers would not agree. The brothers were to get .5 percent out of his 1.9 percent which seemed fair to him. The next dilemma which faced Kroc was where to build his first drive-in McDonald's restaurant. The site had to be chosen carefully. It had to be the perfect model where others would be in awe of the attraction so much so that they would want one of their very own. He wanted it close to his home and his job. Remember, at this time, Ray Kroc is employed by the Prince Castle Company the makers of the shake machines he plans on installing in all of his franchises. His plan was to oversee the building of his new site while still working for the company. With the help of his 50-50 partner Art Jacobs, he finally decided on a site in Des Plaines, Illinois. It was a seven minute drive from his home in Arlington Heights, Chicago and a short walk to the railroad station where he could commute back and forth to his job. As noted above, he immediately encountered problems with the McDonald's brothers and after two lawyers tried to negotiate with them, (they also quit working for Kroc saying he was crazy to work under such conditions especially since he was pouring all of his money, time and energy into this project which would inevitable would make the McDonald brothers quite wealthy) he forged ahead and never looked back. If they tried to interfere with the agreement, which they were not adhering to, he would have to hire another lawyer and deal with it then. "Let 'em try" he said. Okay, I should give you a clue as to what's happening with the brothers. It seems that the original plans that were to be followed by all the franchises were designed around desert like conditions. Kroc got in touch with the brothers to inform them that the plan for Illinois could not be the same as those created for the desert. Over the phone, the brothers told him to do whatever he needed to do. When he asked about the written letter, as per the agreement, they said it was not necessary and they couldn't be bothered. Ray Kroc was trying to uphold his part of the agreement so he went out to see them in person and still they were not cooperative. That's just the simple "just" of it.
We have now pretty much come full circle surrounding the opening of the first store on April 15, 1955. However, I have only introduced snippets from what could make fascinating reading especially for those interested in Ray Kroc's many encounters on his journey to success. There are so many people and modern food companies who were at their beginnings at the same time as him. The reading of this book is easy, pleasant and more than informative and yet, you don't feel like hamburgers are being shoved in your face. There are clever lessons to be learned but they are elusive and yet entertaining. Ray Kroc was a talented salesman who could have had as much as an influence on Willy Loman as Arthur Miller did in the most positive way.
An in depth book review of Grinding it Out, The Making of McDonald's can be found at the following website. Although, it doesn't appear the author is updating the information, it is quite informative for the business minded or for those who are in need of research material.