In 1954, at the age of 52, Ray Kroc began a new age in franchising when he became the national agent for McDonald's.
Kroc, making his rounds as a milk shake mixer salesman, came across the McDonald brothers' (Richard and Maurice) small hamburger shop in Southern California. The establishment was simple, serving only a few items: hamburgers, french fries, soft drinks, and milk shakes. These two brothers became one of Kroc's best customers as they purchased several of his machines in his otherwise dying business.
Kroc, curious about why the McDonalds were purchasing so many mixers, investigated the establishment further. With his keen sense of what American consumers were looking for in eating out, Kroc suggested that the brothers expand their presence. As they asked how they could do so, he offered his services as their agent. That is how the little restaurants with the bright yellow arches began.
The First McDonald'sThe first shop opened in 1955 in Chicago as the organization became the McDonald's Corporation. Six years later Ray bought out the founding brothers. By 1965 there were more than 700 sites in existence across the United States.
It wasn't long before McDonald's also caught on in several other countries. By 2003, the corporation held over 31,000 sites in 119 countries. Forty seven million people were being served every day and sales were at a hefty $17 billion.
Although Kroc did not create the concept of the chain restaurant, he saw a niche and developed the plan to transform burgers, fries and shakes into a huge empire. Kroc was a stickler for consistency and cleanliness in all of his establishments. In addition, he did everything he could to keep costs down so that even low income people could afford a meal out at McDonald's.
Kroc Improves the SystemKroc also had the insight to standardize cooking and serving procedures so that all processes were efficient and easily learned even by new employees. As teen employees came and went, this was important to the operation, so that customers would continue to receive the food they expected in a timely manner.
Kroc established a welcoming franchisee arrangement so that he could increase his presence. He used the method of charging a 1.9 percent commission on franchisee's sales rather than charging a large startup fee.
As McDonald's became the biggest restaurant company in the world, savvy salesman Kroc continued to live by his motto of providing customers what they wanted. Kroc was chairman of McDonald's Corporation, from 1968 until he passed away in 1984.