History of McDonald's

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McDonald's
Type Public
Traded as NYSEMCD
Dow Jones Industrial Average Component
S&P 500 Component
Industry Restaurants
Founded May 15, 1940 in San Bernardino, California;
McDonald's Corporation, April 15, 1955 in Des Plaines, Illinois
Founders Richard and Maurice McDonald; Ray Kroc (Corporation).
Headquarters Oak Brook, Illinois, U.S.
Number of locations 35,000+ worldwide[1]
Area served Worldwide
Key people Andrew J. McKenna
(Chairman)
Don Thompson
(President and CEO)
Products Fast food
(hamburgers • chicken • french fries • soft drinks • coffee • milkshakes • salads • desserts • breakfast)
Revenue
  • Increase US$ 28.1057 billion (2013) [2]
  • Increase US$ 27.567 billion (2012) [2]
Operating income
  • Increase US$ 8.7643 billion (2013) [2]
  • Increase US$ 8.6046 billion (2012) [2]
Net income
  • Increase US$ 5.5859 billion (2013) [2]
  • Decrease US$ 5.4648 billion (2012) [2]
Total assets
  • Increase US$ 36.6263 billion (2013) [3]
  • Increase US$ 35.3865 billion (2012) [2]
Total equity
  • Increase US$ 16.0097 billion (2013) [3]
  • Increase US$ 15.2936 billion (2012) [2]
Employees 440,000 (2013) [4]
Website Global Corporate Website
Main article: McDonald's

McDonalds is a fast-food chain founded in 1940 by Richard and Maurice McDonald. This article is an overview of the history of the chain.

Early history[edit]

The oldest operating McDonald's on Lakewood and Florence in Downey, California, was the chain's third restaurant and the second to be built with the Golden Arches.

The McDonalds migrated from Manchester, New Hampshire to Hollywood in the late 1920s, where brothers Richard and Maurice McDonald began working as set movers and handymen at motion-picture studios.[5] In 1937, their father Patrick McDonald opened "The Airdrome", a food stand, on Huntington Drive (Route 66) near the Monrovia Airport in Monrovia, California.[6] Hamburgers were ten cents, and all-you-can-drink[citation needed] orange juice was five cents. In 1940, Maurice and Richard ("Mac" and "Dick") moved the entire building 40 miles (64 km) east, to West 14th and 1398 North E Streets in San Bernardino, California. The restaurant was renamed "McDonald's Bar-B-Q" and had twenty-five menu items, mostly barbecue.

In October 1948, after the McDonald brothers realized that most of their profits came from selling hamburgers, they closed down their successful carhop drive-in to establish a streamlined system with a simple menu of just hamburgers, cheeseburgers, french fries, shakes, soft drinks, and apple pie. The carhops were eliminated to make McDonald's a self-service operation. The brothers took great care in setting up their kitchen like an assembly line to ensure maximum efficiency. The restaurant's name was changed again, this time to simply "McDonald's," and reopened on December 12, 1955

In 1952 the brothers decided they needed an entirely new building in order to achieve two goals: further efficiency improvements, and a more eye-catching appearance. They collected recommendations for an architect and interviewed at least four altogether, finally choosing Stanley Clark Meston, an architect practicing in nearby Fontana, in the fall.[5] The brothers and Meston worked together closely. They achieved the extra efficiencies they needed by, among other things, drawing the actual measurements of every piece of equipment in chalk on a tennis court behind the McDonald house (with Meston's assistant Charles Fish).[7] The design achieved a high level of noticeability thanks to gleaming surfaces of red and white ceramic tile, stainless steel, brightly colored sheet metal, and glass; pulsing red, white, yellow, and green neon; and last but not least, two 25-foot yellow sheet-metal arches trimmed in neon, called "golden arches" even at the design stage. A third, smaller arch sign at the roadside hosted a pudgy character in a chef's hat, known as Speedee, striding across the top, trimmed in animated neon.[5]

In late 1952, with only a rendering of Meston's design in hand, the brothers began seeking franchisees.[5] Their first franchisee was Neil Fox, a distributor for General Petroleum Corporation. Fox's stand, the first with Meston's golden arches design, opened in May 1953 at 4050 North Central Avenue at Indian School Road in Phoenix, Arizona. Their second franchisee was the team of Fox's brother-in-law Roger Williams and Burdette "Bud" Landon, both of whom also worked for General Petroleum. Williams and Landon opened their stand on 18 August 1953 at 10207 Lakewood Boulevard in Downey, California. Today the Downey stand has the distinction of being the oldest surviving McDonald's restaurant.[8] The Downey stand was never required to comply with the McDonald's Corporation's remodeling and updating requests over the years because it was franchised not by the McDonald's Corporation, but by the McDonald brothers themselves to Williams and Landon. (Recognizing its historic and nostalgic value, in 1990 the McDonald's Corporation acquired the stand and rehabilitated it to a modern but nearly original condition, and then built an adjacent museum and gift shop to commemorate the site.)

In 1954, Ray Kroc, a seller of Multimixer milkshake machines, learned that the McDonald brothers were using eight of his machines in their San Bernardino restaurant. His curiosity was piqued, and he went to San Bernardino to take a look at the McDonalds' restaurant. He was joined by good friend Charles Lewis who had suggested to Kroc several improvements to the McDonald's burger recipe.

Believing the McDonalds' formula was a ticket to success, Kroc suggested they franchise their restaurants throughout the country. The brothers were skeptical, however, that the self-service approach could succeed in colder, rainier climates; furthermore, their thriving business in San Bernardino, and franchises already operating or planned, made them reluctant to risk a national venture.[5] Kroc offered to take the major responsibility for setting up the new franchises elsewhere. He returned to his home outside of Chicago with rights to set up McDonald's restaurants throughout the country, except in a handful of territories in California and Arizona already licensed by the McDonald brothers. The brothers were to receive one-half of one percent of gross sales.[5] Kroc's first McDonald's restaurant opened on April 15, 1955, at 400 North Lee Avenue in Des Plaines, Illinois, near Chicago. (It was demolished in 1984 after many remodels.) Kroc incorporated his company as McDonald's Systems, Inc., which he would later rename McDonald's Corporation.

Once the Des Plaines restaurant had become operational, Kroc sought franchisees for his McDonald's chain. The first snag came quickly. In 1956 he discovered that the McDonald brothers had licensed the franchise rights for Cook County, Illinois to the Frejlack Ice Cream Company. Kroc was incensed that the McDonalds had not informed him of this arrangement. He purchased the rights back for $25,000, five times what the Frejlacks had originally paid, and pressed forward. McDonald's grew slowly for its first three years. By 1958, there were 34 restaurants. In 1959, however, Kroc opened 68 new restaurants, bringing the total to 102 locations.

Phenomenal growth in the 1960s and 1970s[edit]

The Big Mac hamburger made its debut in 1968

In 1960, the McDonald's advertising campaign "Look for the Golden Arches" gave sales a big boost. Kroc believed that advertising was an investment that would in the end come back many times over, and advertising has always played a key role in the development of the McDonald's Corporation. Indeed, McDonald's ads have been some of the most identifiable over the years. In 1962, McDonald's introduced its now world-famous Golden Arches logo. A year later, the company sold its billionth hamburger and introduced Ronald McDonald, a red-haired clown designed to appeal to children.

In the early 1960s, McDonald's really began to take off. The growth in U.S. automobile use that came with suburbanization contributed heavily to McDonald's success. In 1961 Kroc bought out the McDonald brothers for $2.7 million, aiming at making McDonald's the number one fast-food chain in the country.

In 1965, McDonald's Corporation went public. Common shares were offered at $22.50 per share. By the end of the first day's trading, the price had risen to $30. A block of 100 shares purchased for $2,250 in 1965 was worth, after 12 stock splits (increasing the number of shares to 74,360), over $5.7 million as of year-end market close on December 31, 2010. In 1980, McDonald's Corporation became one of the 30 companies that make up the Dow Jones Industrial Average.

McDonald's success in the 1960s was in large part due to the company's skillful marketing and flexible response to customer demand. In 1962, the Filet-O-Fish sandwich, billed as "the fish that catches people", was introduced in McDonald's restaurants.[9] The new item had originally met with disapproval from Kroc, but after its successful test marketing, he eventually agreed to add it. Another item that Kroc had backed a year previously, a burger with a slice of pineapple and a slice of cheese, known as a "hulaburger", had flopped (both it and the Filet-O-Fish were developed in Catholic neighborhoods where burger sales dropped off markedly on Fridays and during Lent). The market was not quite ready for Kroc's taste; the hulaburger's tenure on the McDonald's menu board was short. In 1968 the now legendary Big Mac made its debut, and in 1969 McDonald's sold its five billionth hamburger. Two years later, as it launched the "You Deserve a Break Today" advertising campaign, McDonald's restaurants had reached all 50 states.

In 1968, McDonald's opened its 1,000th restaurant, and Fred L. Turner became the company's president and chief administrative officer. Kroc became chairman and remained CEO until 1973. Turner had originally intended to open a McDonald's franchise, but when he had problems with his backers over a location, he went to work as a grillman for Kroc in 1956. As operations vice president, Turner helped new franchisees get their stores up and running. He was constantly looking for new ways to perfect the McDonald's system, experimenting, for example, to determine the maximum number of hamburger patties one could stack in a box without squashing them and pointing out that seconds could be saved if McDonald's used buns that were presliced all the way through and were not stuck together in the package. Such attention to detail was one reason for the company's extraordinary success.

By the late 1960s, many of the candy-striped Golden Arches stores had been modified with enclosed walk-up order areas and limited indoor seating. In June 1969, McDonald's introduced a new "mansard roof" building design featuring indoor seating. The natural brick and cedar shake look mansards were a response to critics who berated McDonald's architecture as too garish. It became the standard for McDonald's restaurants, and franchise holders were ultimately required to demolish older restaurants and replace them with the new design. The first McDonald's restaurant using the "mansard roof" design opened that same year in the Chicago suburb of Matteson.

McDonald's spectacular growth continued in the 1970s. Americans were more on-the-go than ever, and fast service was a priority. In 1972, the company passed $1 billion in annual sales. By 1976, McDonald's had served 20 billion hamburgers, and system wide sales exceeded $3 billion.

The company pioneered breakfast fast food with the introduction of the Egg McMuffin in 1972 when market research indicated that a quick breakfast would be welcomed by consumers. Five years later McDonald's added a full breakfast line to the menu, and by 1987 one-fourth of all breakfasts eaten out in the United States came from McDonald's restaurants. In test market locations, such as New York City, McDonald's added a full breakfast line to its menus in 1975.

Kroc was a firm believer in giving "something back into the community where you do business". In 1974 McDonald's acted upon that philosophy in an original way by opening the first Ronald McDonald House, in Philadelphia, to provide a "home away from home" for the families of children in nearby hospitals. Twelve years after this first house opened, 100 similar Ronald McDonald Houses were in operation across the United States.

In 1974, with the opening of the first restaurant in the United Kingdom, the corporation became embroiled in a public relations nightmare. On the employment forms (brought in from the U.S.) it asked employees if they wished to contribute money to an I.R.A. (Individual Retirement Account). Given that the I.R.A. is also an acronym for the organization the Irish Republican Army, the employees believed that McDonald's was contributing money to a criminal group. Decades later, many people still believe that McDonald's broke the U.S. federal law that prohibits giving money to organizations deemed by the U.S. State Department to be criminal groups .[citation needed]

There was some skepticism in the company's phenomenal growth internationally. When Wally and Hugh Morris approached the corporation in 1974 to bring McDonald's into New Zealand, they were firmly shunned by Kroc, citing a visit to the country and saying "There aren't any people... I never met a more dead-than-alive hole in my life." Persistence by the brothers eventually led to their request being granted in May 1975. They managed to negotiate a deal with the corporation by selling New Zealand cheese to the US to offset the high costs of importing plant equipment. The first New Zealand restaurant opened in June 1976 at Porirua, near Wellington, to much more success than the corporation predicted.[10]

In 1975, McDonald's opened its first drive-thru window in Sierra Vista, Arizona, following Wendy's lead. This service gave Americans a fast, convenient way to procure a quick meal. The company's goal was to provide service in 50 seconds or less. Drive-thru sales eventually accounted for more than half of McDonald's systemwide sales. Meantime, the Happy Meal, a combo meal for children featuring a toy, was added to the menu in 1979.

Surviving the 1980s "Burger Wars"[edit]

In the late 1970s, competition from other hamburger chains such as Burger King and Wendy's began to intensify. Experts believed that the fast-food industry had become as big as it ever would, so the companies began to battle fiercely for market share. A period of aggressive advertising campaigns and price slashing in the early 1980s became known as the "burger wars". Burger King suggested to customers: "have it your way"; Wendy's offered itself as the "fresh alternative" and asked of other restaurants, "Where's the beef?" But McDonald's sales and market share continued to grow.

During the 1980s, McDonald's further diversified its menu to suit changing consumer tastes. The company introduced the McChicken in 1980. It proved to be a sales disappointment and was replaced with series of different chicken sandwiches a year later. Chicken McNuggets were invented by Rene Arend in 1979. They were so good that every franchise wanted them. However, there wasn't a system to supply enough chicken products. The supply problem was solved in 1983, when the McNuggets were made available nationwide. By the end of 1983, McDonald's was the second largest retailer of chicken in the world.[citation needed] In 1985, ready-to-eat salads were introduced to lure more health-conscious consumers. The 1980s were the fastest-paced decade yet. Efficiency, combined with an expanded menu, continued to draw customers. McDonald's, already entrenched in the suburbs, began to focus on urban centers and introduced new architectural styles. Although McDonald's restaurants no longer looked identical, the company made sure food quality and service remained consistent.

Despite experts' claims that the fast-food industry was saturated, McDonald's continued to expand. The first generation raised on restaurant food had grown up. Eating out had become a habit rather than a break in the routine, and McDonald's relentless marketing continued to improve sales.

The first McDonald's Express locations opened in 1991. These are smaller-scale prototypes, usually constructed in prefabricated buildings or urban storefronts, that do not feature certain menu items such as milkshakes and Quarter Pounders.[11]

In 1992 Michael R. Quinlan became president of McDonald's Corporation, and Fred L. Turner became chairman. Quinlan, who took over as CEO in 1987, had started at McDonald's in the mailroom in 1963, and gradually worked his way up. The first McDonald's CEO to hold an M.B.A. degree, Quinlan was regarded by his colleagues as a shrewd competitor. In his first year as CEO the company opened 600 new restaurants.

McDonald's growth in the United States was mirrored by its stunning growth abroad. By 1991, 37 percent of systemwide sales came from restaurants outside the United States. McDonald's opened its first foreign restaurant in British Columbia, Canada, in 1967. By the early 1990s the company had established itself in 58 foreign countries and operated more than 3,600 restaurants outside the United States, through wholly owned subsidiaries, joint ventures, and franchise agreements. Its strongest foreign markets were Japan, Canada, Germany, Great Britain, Australia, and France.

In the mid-1980s, McDonald's, like other traditional employers of teenagers, was faced with a shortage of labor in the United States. The company met this challenge by being the first to entice retirees back into the workforce. McDonald's placed great emphasis on effective training. It opened its Hamburger University in 1961 to train franchisees and corporate decision-makers. By 1990, more than 40,000 people had received "Bachelor of Hamburgerology" degrees from the 80-acre (320,000 m2) Oak Brook, Illinois, facility. The corporation opened a Hamburger University in Tokyo in 1971, in Munich in 1975, and in London in 1982.

Braille menus were first introduced in 1979, and picture menus in 1988. In March 1992, Braille and picture menus were reintroduced to acknowledge the 37 million Americans with vision, speech, or hearing impairments.

Quinlan continued to experiment with new technology and to research new markets to keep McDonald's ahead of its competition. Clamshell fryers, which cooked both sides of a hamburger simultaneously, were tested. New locations such as hospitals and military bases were tapped as sites for new restaurants. In response to the increase in microwave oven usage, McDonald's, whose name is the single most advertised brand name in the world, stepped up advertising and promotional expenditures stressing that its taste was superior to quick-packaged foods.

1990s: Growing pains[edit]

McRecycle USA began in 1990 and included a commitment to purchase at least $100 million worth of recycled products annually for use in construction, remodeling, and equipping restaurants. Chairs, table bases, table tops, eating counters, table columns, waste receptacles, corrugated cartons, packaging, and washroom tissue were all made from recycled products. McDonald's worked with the U.S. Environmental Defense Fund to develop a comprehensive solid waste reduction program. Wrapping burgers in paper rather than plastic led to a 90 percent reduction in the wrapping material waste stream.

It took McDonald's 33 years to open its first 10,000 restaurants. The 10,000th unit opened in April 1988. Incredibly, the company reached the 20,000-restaurant mark in only eight more years, in mid-1996. By the end of 1997 the total had surpassed 23,000, and by that time McDonald's was opening 2,000 new restaurants each year, an average of one every five hours.

Much of the growth of the 1990s came outside the United States, with international units increasing from about 3,600 in 1991 to more than 11,000 by 1998. The number of countries with McDonald's outlets nearly doubled from 59 in 1991 to 114 in late 1998. In 1993, a new region was added to the empire when the first McDonald's in the Middle East opened in Tel Aviv, Israel. As the company entered new markets, it showed increasing flexibility with respect to local food preferences and customs. In Israel, for example, the first kosher McDonald's opened in a Jerusalem suburb in 1995. In Arab countries the restaurant chain used "Halal" menus, which complied with Islamic laws for food preparation. In 1996 McDonald's entered India for the first time, where it offered a Big Mac made with lamb called the Maharaja Mac. That same year the first McSki-Thru opened in Lindvallen, Sweden.

Overall, the company derived increasing percentages of its revenue and income from outside the United States. In 1992 about two-thirds of systemwide sales came from U.S. McDonald's, but by 1997 that figure was down to about 51 percent. Similarly, the operating income numbers showed a reduction from about 60 percent derived from the United States in 1992 to 42.5 percent in 1997.

In the United States, the number of units grew from 9,000 in 1991 to 12,500 in 1997, an increase of about 40 percent. The growth is considered by some [who?] to be excessive. Although the additional units increased market share in some markets, a number of franchisees complained that new units were cannibalizing sales from existing ones. Same-store sales for outlets open for more than one year were flat in the mid-1990s, a reflection of both the greater number of units and the mature nature of the U.S. market.

It did not help that the company made several notable blunders in the United States in the 1990s. The McLean Deluxe sandwich, which featured a 91 percent fat-free beef patty, was introduced in 1991, never really caught on, and was dropped from the menu in February 1996 to make room for the Arch Deluxe. Several other 1990s-debuted menu items, including fried chicken, pasta, fajitas, and pizza failed as well. The "grown-up" (and pricey) Arch Deluxe sandwich was launched in May 1996 and the Deluxe Line was launched in September 1996 in a $200 million campaign to gain the business of more adults, but were bombs. The following spring brought a 55-cent Big Mac promotion, which many customers either rejected outright or were confused by because the burgers had to be purchased with full-priced fries and a drink. The promotion embittered still more franchisees, whose complaints led to its withdrawal. In July 1997 McDonald's fired its main ad agency, Leo Burnett, a 15-year McDonald's partner after the nostalgic "My McDonald's" campaign proved a failure. A seemingly weakened McDonald's was the object of a Burger King offensive when the rival fast-food maker launched the Big King sandwich, a Big Mac clone. Meanwhile, internal taste tests revealed that customers preferred the fare at Wendy's and Burger King.

In response to these difficulties, McDonald's drastically cut back on its U.S. expansion. In contrast to the 1,130 units opened in 1995, only about 400 new McDonald's were built in 1997. Plans to open hundreds of smaller restaurants in Wal-Marts and gasoline stations were abandoned because test sites did not meet targeted goals. Reacting to complaints from franchisees about poor communication with the corporation and excess bureaucracy, the head of McDonald's U.S.A. (Jack M. Greenberg, who had assumed the position in October 1996) reorganized the unit into five autonomous geographic divisions. The aim was to bring management and decision-making closer to franchisees and customers.

On the marketing side, McDonald's scored big in 1996 and 1997 with a Teenie Beanie Baby promotion in which about 80 million of the toys/collectibles were gobbled up virtually overnight. The chain received some bad publicity, however, when it was discovered that a number of customers purchased Happy Meals just to get the toys and threw the food away. For a similar spring 1998 Teenie Beanie giveaway, the company altered the promotion to allow patrons to buy menu items other than kids' meals. McDonald's also began to benefit from a seven years global marketing alliance signed with Disney/Pixar in 1998. Initial Disney/Pixar movies promoted by McDonald's included A Bug's Life, Monsters, Inc., Finding Nemo and The Incredibles. Perhaps the most important marketing move came in the later months of 1997 when McDonald's named DDB Needham as its new lead ad agency. Needham had been the company's agency in the 1970s and was responsible for the hugely successful "You Deserve a Break Today" campaign. Late in 1997, McDonald's launched the Needham-designed "Did Somebody Say McDonald's?" campaign, which appeared to be an improvement over its predecessors.

Failed turnaround: late 1990s[edit]

Following the difficulties of the early and mid-1990s, several moves in 1998 seemed to indicate a reinvigorated McDonald's. In February the company for the first time took a stake in another fast-food chain when it purchased a minority interest in the 16-unit, Colorado-based Chipotle Mexican Grill chain. The following month came the announcement that McDonald's would improve the taste of several sandwiches and introduce several new menu items. McFlurry desserts, developed by a Canadian franchisee in 1997, proved popular when launched in the United States in the summer of 1998. McDonald's that same month said that it would overhaul its food preparation system in every U.S. restaurant. The new just-in-time system, dubbed "Made for You", was in development for a number of years and aimed to deliver to customers "fresher, hotter food"; enable patrons to receive special-order sandwiches (a perk long offered by rivals Burger King and Wendy's); and allow new menu items to be more easily introduced thanks to the system's enhanced flexibility. The expensive changeover was expected to cost about $25,000 per restaurant, with McDonald's offering to pay for about half of the cost; the company planned to provide about $190 million in financial assistance to its franchisees before implementation was completed by year-end 1999.

In May 1998, Greenberg was named president and CEO of McDonald's Corporation, with Quinlan remaining chairman; at the same time Alan D. Feldman, who had joined the company only four years earlier from Pizza Hut, replaced Greenberg as president of McDonald's U.S.A., an unusual move for a company whose executives typically were long-timers. The following month brought another first, McDonald's first job cuts. The company said it would eliminate 525 employees from its headquarters staff, a cut of about 23 percent. In the second quarter of 1998 McDonald's took a $160 million charge in relation to the cuts. As a result, the company, for the first time since it went public in 1965, recorded a decrease in net income, from $1.64 billion in 1997 to $1.55 billion in 1998.

McDonald's followed up its investment in Chipotle with several more moves beyond the burger business. In March 1999 the company bought Aroma Café, a UK chain of 23 upscale coffee and sandwich shops. In July of that year McDonald's added Donatos Pizza, a midwestern chain of 143 pizzerias based in Columbus, Ohio. Donatos had 1997 revenues of $120 million. Also in 1999, McDonald's 25,000th unit opened, Greenberg took on the additional post of chairman, and Jim Cantalupo was named company president. Cantalupo, who had joined the company as controller in 1974 and later became head of McDonald's International, had been vice-chairman, a position he retained. In May 2000 McDonald's completed its largest acquisition yet, buying the bankrupt Boston Market chain for $173.5 million in cash and debt. At the time, there were more than 850 Boston Market outlets, which specialized in home-style meals, with rotisserie chicken the lead menu item. Revenue at Boston Market during 1999 totaled $670 million. McDonald's rounded out its acquisition spree in early 2001 by buying a 33 percent stake in Pret A Manger, an upscale urban-based chain specializing in ready-to-eat sandwiches made on the premises. There were more than 110 Pret shops in the United Kingdom and several more in New York City. Also during 2001, McDonald's sold off Aroma Café and took its McDonald's Japan affiliate public, selling a minority stake through an initial public offering.

Refurbishing and creating a healthier image: Early 2000s[edit]

As it was exploring new avenues of growth, however, McDonald's core hamburger chain had become plagued by problems. Most prominently, the Made for You system backfired. Although many franchisees believed that it succeeded in improving the quality of the food, it also increased service times and proved labor-intensive. Some franchisees also complained that the actual cost of implementing the system ran much higher than the corporation had estimated, a charge that McDonald's contested. In any case, there was no question that Made for You failed to reverse the chain's sluggish sales. Growth in sales at stores open more than a year (known as same-store sales) fell in both 2000 and 2001. Late in 2001 the company launched a restructuring involving the elimination of about 850 positions, 700 of which were in the United States, and some store closings.[citation needed]

In 2000 a McDonald's in Dearborn, Michigan in Greater Detroit was the first one in Michigan and the only one east of the Mississippi River to offer halal food for Muslim customers.[12]

There were further black eyes as well. McDonald's was sued in 2001 after it was revealed that for flavoring purposes a small amount of beef extract was being added to the vegetable oil used to cook the french fries. The company had cooked its fries in beef tallow until 1990, when it began claiming in ads that it used 100 percent vegetable oil. McDonald's soon apologized for any "confusion" that had been caused by its use of the beef flavoring, and in mid-2002 it reached a settlement in the litigation, agreeing to donate $10 million to Hindu, vegetarian, and other affected groups. Also in 2001, further embarrassment came when 51 people were charged with conspiring to rig McDonald's game promotions over the course of several years. It was revealed that $24 million of winning McDonald's game tickets had been stolen as part of the scam. McDonald's was not implicated in the scheme, which centered on a worker at an outside company that had administered the promotions.

McDonald's also had to increasingly battle its public image as a purveyor of fatty, unhealthy food. Consumers began filing lawsuits contending that years of eating at McDonald's had made them overweight. McDonald's responded by introducing low-calorie menu items and switching to a more healthful cooking oil for its french fries. McDonald's franchises overseas became a favorite target of people and groups expressing anti-American and/or anti-globalization sentiments. In August 1999 a group of protesters led by farmer José Bové destroyed a half-built McDonald's restaurant in Millau, France. In 2002 Bové, who gained fame from the incident, served a three-month jail sentence for the act, which he said was in protest against U.S. trade protectionism. McDonald's was also one of three multinational corporations (along with Starbucks Corporation and Nike, Inc.) whose outlets in Seattle were attacked in late 1999 by some of the more aggressive protesters against a World Trade Organization meeting taking place there. In the early 2000s McDonald's pulled out of several countries, including Bolivia and two Middle Eastern nations, at least in part because of the negative regard with which the brand was held in some areas.

Early in 2002, Cantalupo retired after 28 years of service. Sales remained lackluster that year, and in October the company attempted to revive U.S. sales through the introduction of a low-cost Dollar Menu. In December 2002, after this latest initiative to reignite sales growth failed and also after profits fell in seven of the previous eight quarters, Greenberg announced that he would resign at the end of the year. Cantalupo came out of retirement to become chairman and CEO at the beginning of 2003.

Cantalupo started his tenure by announcing a major restructuring that involved the 2002 quarterly loss, which included the closure of more than 700 restaurants (mostly in the United States and Japan), the elimination of 600 jobs, and charges of $853 million. The charges resulted in a fourth-quarter 2002 loss of $343.8 million, the first quarterly loss in McDonald's 38 years as a public company. The new CEO also shifted away from the company's traditional reliance on growth through the opening of new units to a focus on gaining more sales from existing units. By 2003, with Ray Kroc's McDonald's Corporation nearly 50 and the McDonald's fast food restaurant concept itself old enough to qualify for AARP membership, the brand had perhaps become too familiar and sales figures stalled. Analysts, management, owners, and customers alike recognized that the aged chain required revivification. The question in need of solution was: How should McDonald's reinvent itself without losing its core values and maintain relevance in the marketplace? To that end, several new menu items were successfully launched, including entree salads, McGriddles breakfast sandwiches (which used pancakes in place of bread), and white-meat Chicken McNuggets. Some outlets began test-marketing fruits and vegetables as Happy Meal options. It was quickly determined that focus on customer experience was key in reversing the slippage. Then, a new global marketing campaign was adopted which was designed around the notion of the "Rolling Energy" phase. Launched on September 29, 2003, the campaign began featuring youthful images, hip music, and pop culture celebrities touting the tagline, "I'm lovin' it". Next, James R. Cantalupo was called back from retirement to head the corporation and its efforts to recapture golden luster. His plan was to keep things simple with a focus on the basics like customer service, clean restrooms, and reliable appealing food (not unlike Ray Kroc's mantra of QSC and V: Quality, Service, Cleanliness, and Value). In addition to the basics he determined to position the company with a more modern coherent image in order to foster a McDonald's "experience" for customers. More than an advertising campaign he and his team approved sweeping new architecture for McDonald's restaurants, the first major overhaul since 1969 when the now universally recognized signature double mansard roof became standard. In fact, Mr. Cantalupo personally approved abandonment of the ubiquitous and familiar mansard in favor of what became the "Forever Young" prototype topped with its swish eyebrow. This was the first global campaign in McDonald's history, as the new slogan was to be used in advertising in more than 100 countries. It also proved to be the first truly successful ad campaign in years; sales began rebounding, helped also by improvements in service. Cantalupo did not live to see the fruits of his labor and he died in 2004 just as his modern vision for McDonald's was getting underway. Nonetheless he had set things into motion causing a paradigm shift for the company resulting in a refreshed image without a dilution of brand identity.

In December 2003, for instance, same-store sales increased 7.3 percent. Same-store sales rose 2.4 percent for the entire year, after falling 2.1 percent in 2002. Also, in that month, McDonald's announced that it would further its focus on its core hamburger business by downsizing its other ventures. The company said that it would sell Donatos back to that chain's founder. In addition, it would discontinue development of non-McDonald's brands outside of the United States. This included Boston Market outlets in Canada and Australia and Donatos units in Germany. McDonald's kept its minority investment in Pret A Manger, but McDonald's Japan was slated to close its Pret units there. These moves would enable the company to concentrate its international efforts on the McDonald's chain, while reducing the non-hamburger brands in the United States to Chipotle and Boston Market, both of which were operating in the black.

McDonald's continued to curtail store openings in 2004 and to concentrate on building business at existing restaurants. Much of the more than $1.5 billion budgeted for capital expenditures in 2004 was slated to be used to remodel existing restaurants. McDonald's also aimed to pay down debt by $400 million to $700 million and to return approximately $1 billion to shareholders through dividends and share repurchases. Cantalupo also set several long-term goals, such as sustaining annual systemwide sales and revenue growth rates of 3 to 5 percent. In a move to both simplify the menu and make its offerings less fattening, McDonald's announced in March 2004 that it would phase out Super Size french fries and soft drinks by the end of the year.

In the 1960s, the 1970s, the 1980s, and the 1990s, "no loitering" had been McDonald's motto. Ray Kroc had decreed upon the origins of his version of the chain that pay telephones, jukeboxes, and vending machines of any kind were forbidden at McDonald's restaurants. The goal had been to quickly serve customers and not force them to stay in the restaurants any longer than it took them to eat a hamburger. Along that line of thinking, dining areas were designed with minimalist hard plastic tables and chairs which were more often than not bolted in place. Thus customers consumed their fast food in scant comfort without dillydally allowing room for the next hurrying customers.

With the new "Forever Young" design (adopted in 2006), the first major redesign since 1969, McDonald's turned a new page for itself. New and remodeled restaurants feature dining zones with "distinct personalities". Most of them offer three sections or zones. A linger zone is designed to accommodate young adults who might dawdle and socialize while sitting comfortably on armchairs or sofas using free wifi access. Another zone offers counters and stools for patrons in a hurry who might just grab and go. The third and perhaps most important zone is the one for families or groups where seating arrangements can be reconfigured to meet a variety of needs. Also, harsh colors and hard plastics have been replaced with custom earth tones and flexible padded fabric covered booth seating all in hopes of engaging diners to loiter and perhaps spend more money and in addition to architecture and furnishings, the McDonald's menu has been tweaked to offer a larger variety of what the corporation refers to as more healthy food.

McDonald's franchisees are required to go by the directions of their parent and perhaps more than a few have complained about the Forever Young changes. First people the world over recognize the mansard buildings and identify McDonald's with them. A new look breaks new ground for potential patrons. The next objection is cost. In 2008, a new build swish-brow store was said to cost upwards of $1 million and renovation of an existing unit to meet the new standards as much as $400,000. With a large percentage of sales from drive-in business franchisees could argue that the expensive interior redesign is unwarranted for their bottom lines.

2010s[edit]

In July 2011, McDonald's announced that their largest restaurant in the world will be built on the 2012 London Olympics site. The restaurant will contain over 1,500 seats and is half the length of an American Football field. Over 470 staff will be employed serving on average (during the 2012 Olympics) 100,000 portions of fries, 50,000 Big Macs and 30,000 Milkshakes. This restaurant will overshadow the current largest McDonald's in the world in Moscow, Russia.[citation needed]

In January 2012, the company announced revenue for 2011 reached an all-time high of $27 billion, and that 2400 restaurants would be updated and 1300 new ones opened worldwide.[13]

Timeline[edit]

  • 1937: Patrick McDonald opens a hamburger and drinks stand called "The Airdrome" on historic Route 66 (now Huntington Drive) near the Monrovia Airport in Monrovia, California.
  • 1940: Brothers Richard and Maurice McDonald move The Airdrome building 40 miles (64 km) east to San Bernardino, California, where they open the first McDonald's restaurant, near U.S. Route 66, at West 14th St and 1398 North E St., on May 15. Its menu consisted of 25 items, mostly barbecue. As was common at the time, they employed around 20 carhops. It became a popular and highly profitable teen hangout.
  • 1948: After noticing that almost all of their profits came from hamburgers, the brothers closed the restaurant for several months to remodel it and implement their innovative "Speedee Service System", a streamlined assembly line for hamburgers. The carhops are fired, and when the restaurant reopens it sells only hamburgers, milkshakes, and french fries. At 15 cents, the burgers are about half as expensive as at standard diners, and they are served immediately. The restaurant is extremely successful, and its fame spreads by word of mouth.
  • 1952: The brothers hire Southern California architect Stanley Clark Meston to design a replacement for the San Bernardino stand which is to have even greater efficiency and a more eye-catching appearance. Meston and his assistant Charles Fish deliver the Golden Arches design.
  • 1952: The brothers begin to franchise their restaurant. The first franchisee is Neil Fox.
  • 1953: Fox's McDonald's opens in May in Phoenix, Arizona at N. Central Ave and Indian School Road. It is the first to feature the Golden Arches design.
Third McDonald's restaurant in Downey, California, at the corner of Lakewood Boulevard and Florence Avenue. It is the oldest McDonald's restaurant still in operation.
  • 1953: The third McDonald's restaurant, franchised to Roger Williams and Burdette Landon, opens in Downey, California at the corner of Lakewood Blvd and Florence Avenue. Today it is the oldest McDonald's restaurant still in operation.[14]
  • 1954: Entrepreneur and milkshake-mixer salesman Ray Kroc becomes fascinated by the McDonald's restaurant during a sales visit, when he learns of its extraordinary capacity and popularity. Others who had visited the restaurant and come away inspired were James McLamore, founder of Burger King, and Glen Bell, founder of Taco Bell. After seeing the restaurant in operation, Kroc approaches the McDonald brothers, who have already begun franchising, with a proposition to let him franchise McDonald's restaurants outside the company's home base of California and Arizona, with himself as the first franchisee. Kroc works hard to sell McDonald's. He even attempts to prevail on his wartime acquaintance with Walt Disney, in the failed hope of opening a McDonald's at the soon-to-be-opened Disneyland.
Ray Kroc's first franchised restaurant, the tenth-ever location at Blackstone and Shields Avenues (though torn down and rebuilt twice) in Fresno, California.
  • 1955: Ray Kroc founds "McDonald's Systems, Inc." on March 2, as a legal structure for his planned franchises. Kroc opens the ninth McDonald's restaurant in Des Plaines, Illinois, in suburban Chicago on April 15.
  • 1955: Ray Kroc hires Fred L. Turner (later CEO and Chairman) as a grillman in his store in Des Plaines.
  • 1957: The original restaurant in San Bernardino is rebuilt with a golden arches design.[5]
  • 1958: First New England location opens in Hamden, Connecticut.
  • 1958: McDonald's worldwide sells its 100 millionth hamburger.
  • 1958: First Tampa Bay Area location of McDonald's opens in Tampa, Florida.
  • 1959: First Hawaii location opens in Honolulu.
  • 1959: The 100th McDonald's restaurant opens in Fond du Lac, Wisconsin.
  • 1959: McDonald's begins billboard advertising.

1960s[edit]

  • 1960: First Massachusetts location of McDonald's opens in Boston.
  • 1960: First Alaska location opens in Juneau.
  • 1960: Kroc's company is renamed "McDonald's Corporation".
  • 1961: The McDonald brothers agree to sell Kroc business rights to their operation for $2.7 million, a sum that Kroc borrows from a number of investors, including Princeton University; Kroc considers the sum extreme, and it strains his relationship with the brothers. In a handshake agreement, the brothers would also receive an overriding royalty of 1% on the gross sales. At the closing table the brothers told Ray that they were giving the real estate and rights to the original unit to the founding employees. Ray closed the transaction, then refused to acknowledge the royalty portion of the agreement because it wasn't in writing. The brothers keep their original restaurant, but in an oversight they fail to retain the right to remain a McDonald's franchise. Renamed "The Big M", Kroc drives it out of business by opening a McDonald's just one block north; he attends the opening. Had the brothers maintained their original agreement, which granted them 0.5% of the chain's annual revenues, they or their heirs would have been collecting in excess of $100 million per year today. Had the brothers closed their handshake agreement with Ray, these royalties would have doubled.
  • 1961: Hamburger University opens in the basement of the Elk Grove Village, Illinois, McDonald's restaurant. Bachelor of Hamburgerology degrees went to graduating class of 15.
  • 1961 October 31 . The first McDonalds in Georgia opens in Doraville Ga
  • 1962: McDonald's first national magazine ad appears in Life magazine.
  • 1962: The first McDonald's restaurant with seating opens in Denver, Colorado.
  • 1962: Market research shows that people identify McDonald's primarily with the golden arches;[5] in response, the Speedee character is dropped and the Golden Arches logo is introduced.hi
  • 1963: One of Kroc's marketing insights is his decision to advertise McDonald's hamburgers to families and children. Washington, D.C. franchisees John Gibson and Oscar Goldstein (Gee Gee Distributing Corporation) sponsor a children's show on WRC-TV called Bozo the Clown, a franchised character played by Willard Scott from 1959 until 1962. After the show was cancelled, Goldstein hires Scott to portray McDonald's new mascot, named Ronald McDonald. According to Scott, they wanted to pay him in stock, but Scott decided to take the money. Scott, looking nothing like the familiar appearance of any McDonaldland character as is known today, appeared in the first three television advertisements featuring the character. After changing the character's first name to "Ronald" and replacing Scott with a new actor, and giving him the more familiar red, white, and yellow clown features, the character eventually spreads to the rest of the country via an advertising campaign. Years later, an entire cast of "McDonaldland" characters is developed.
  • 1963: The Filet-O-Fish is introduced in Cincinnati, Ohio, in a restaurant located in a neighborhood dominated by Roman Catholics who practiced abstinence (the avoidance of meat) on Fridays. It is the first new addition to the original menu, and goes national the following year, with fish supplied by Gorton's of Gloucester. See also Lou Groen
  • 1963: McDonald's sells its one billionth hamburger.
  • 1963: The 500th McDonald's restaurant opens in Toledo, Ohio.
  • 1964: McDonald's issues its first annual report.
  • 1965: Third New England location opens in Windsor, Connecticut.
  • 1967: First Rhode Island location opens in Providence, Rhode Island.
  • 1967: The first McDonald's restaurant in a territory of the United States opens in San Juan, Puerto Rico.
  • 1967: The first McDonald's restaurant outside the United States opens in Richmond, British Columbia.
  • 1967: The chain's stand-alone restaurant design which is still most common today, with mansard roof and indoor seating, is introduced.
  • 1968: The Big Mac (similar to the Big Boy hamburger), the brainchild of Jim Delligatti, one of Ray Kroc's earliest franchisees, who by the late 1960s operated a dozen stores in Pittsburgh, Pennsylvania, is first introduced in the Pittsburgh market in 1967, before going system/nationwide a year later, following its great local success. The Hot Apple Pie is also introduced this year.
  • 1968: The 1000th McDonald's restaurant opens in Des Plaines, Illinois.

1970s[edit]

An early-1970s McDonald's sign in Austin, Minnesota, showing the number of burgers sold. From 1969, the number was displayed in billions, increasing with every 5 billion. When the total reached 100 billion in 1993, the signs of this era were changed to display 99 billion permanently, as there was only room for two digits, though some signs use the "Billions and Billions Served" tagline.
  • 1970: McDonald's opens in Costa Rica, its third country after the United States and Canada.
  • 1970: Having changed hands in 1968, the original "Big M" restaurant closes. It is demolished two years later, with only part of the sign remaining; this has since been restored.
  • 1971: The first Asian McDonald's opens in July in Japan, in Tokyo's Ginza district.
  • 1971: On August 21, the first European McDonald's outlet opens, in Zaandam (near Amsterdam) in the Netherlands. The franchisee is Ahold.
  • 1971: The first McDonald's in Germany (Munich) opens in November. It is the first McDonald's to sell alcohol, as it offers beer. Other European countries follow in the early 1970s.
  • 1971: The first Australian McDonald's opens in the Sydney suburb of Yagoona in May.
  • 1972: The McDonald's system generates $1 billion in sales through 2200 restaurants.[15]
  • 1972: The 2000th McDonald's restaurant opens in Des Plaines, Illinois.
  • 1972: The first McDonald's in France opens, in Créteil, even though the company officially recognizes the first outlet in Strasbourg in 1979.
  • 1973: The first McDonald's Playland opens in Chula Vista, California.
  • 1973: The first Swedish McDonald's restaurant opens in Stockholm, 23 October.
  • 1973: The Quarter Pounder is introduced.
  • 1973: The Egg McMuffin, invented by Herb Peterson, owner and operator of a Santa Barbara franchise, is introduced to the menu.
  • 1974: On November 13, the first McDonald's in the United Kingdom opens in Woolwich, southeast London. It is the company's 3000th restaurant.[16]
  • 1974: The first Ronald McDonald House opens in Philadelphia, Pennsylvania.
  • 1975: The first Hong Kong McDonald's opens in January in Paterson Street, in Causeway Bay, Hong Kong Island. It is also the first McDonald's restaurant in Greater China and the Four Asian Tigers.
  • 1975: Drive-Thru is introduced in January in Sierra Vista, Arizona in order to serve meals to soldiers from nearby Fort Huachuca who were not allowed to wear BDUs while off post except while in a vehicle. The Drive-Thru is later known as "McDrive" in some countries.
  • 1976: The first McDonald's in Switzerland, on Rue du Mont-Blanc in Geneva.[17]
  • 1976: McDonald's pays its first cash dividend .
  • 1977: McDonald's adds a breakfast line to the U.S. menu.
  • 1978: The 5000th McDonald's restaurant opens in Kanagawa, Japan.
  • 1978: Hamburger University celebrates the graduation of its 15,000th student.
  • 1979: The Happy Meal is introduced in the U.S.
  • 1979: The first McDonald's in Southeast Asia opens, in Singapore.
  • 1979: The first McDonald's in South America opens, in Brazil.

1980s[edit]

A McDonald's in a Toronto, Ontario, Canada Wal-Mart store. Note the maple leaf on the Golden Arches.
McDonald's in Barcelona, Spain
  • 1980: McDonald's introduces the McChicken sandwich, its first poultry item. It flops, and is removed from the menu, but is later reintroduced after Chicken McNuggets prove successful.
  • 1980: The Chicken McNuggets are introduced to the menu and instantly become a success by early-1983.
  • 1980: The 6000th McDonald's restaurant opens in Munich, Germany.
  • 1981: The first Ronald McDonald House outside the U.S. opens in Toronto, Canada.
  • 1981: The first McDonald's in the Philippines opens, in Morayta, Manila.
  • 1982: The first McDonald's in Malaysia opens, at Jalan Bukit Bintang, Kuala Lumpur.
  • 1982: McDonald's stages an in-house rivalry between the Chicken McNuggets and the Big Mac as the advertising campaign involved the slogan "Which will be number one?".
  • 1983: After gaining much success, the McNuggets begin rolling out nationwide starting in January.
  • 1984: The first McDonald's in Taiwan opens in January, at Songshan District, Taipei.
  • 1984: Ray Kroc dies on January 14.
  • 1984: The company is a main sponsor of the 1984 Summer Olympics. Its U.S. restaurants lose money on the game "When The US Wins, You Win" after the Soviet bloc nations boycott the Games, leading to a high number of medals won by the U.S (this is later parodied in an episode of The Simpsons, with Krusty the Klown's Krusty Burger chain suffering a similar fate).
  • 1984: On 18 July, James Huberty committed the worst mass murder (at the time) in the US, when he opened fire at the San Ysidro branch, killing 21 people before he was gunned down by a SWAT team sniper.
  • 1985: McDonald's opens its first restaurant in Italy, in Bolzano.
  • 1985: Saul Kahan opens the first McDonald's restaurant in Mexico City, Mexico.
  • 1986: Ali Vardar opens the first McDonald's restaurant in İstanbul, Turkey.
  • 1987: The first Macauese McDonald's opens on the Rua do Campo, Macau. It is also the first McDonald's restaurant in Portugal when Macau was under the control of Portugal.
  • 1987: On August 12, a Piper Cheyenne, which started in Augsburg, Germany, was on a simulated approach to Munich's main airport Riem, when all instruments failed. The plane crashed into the McDonald's restaurant in the Wasserburger Landstrasse. Fourteen people were killed in the incident: 4 in the plane, 3 on the street or in a bus, which was also struck by the plane, and 7 in the restaurant. The McDonald's in the Wasserburger Landstrasse has since been rebuilt.[18]
  • 1987: On 23 November, The first Scottish store opened in Dundee, followed by Kirkcaldy.[19] 13 years after McDonald's first appeared in Britain.
  • 1988: The first Korean McDonald's restaurant opens in March, in Seoul's Apgujeong-dong district.
  • 1988: McDonald's opens its first restaurant in a communist country, in Belgrade, Yugoslavia (now Serbia). Budapest, Hungary follows in the same year.
  • 1989: McDonald's has The Little Mermaid Happy Meal, based on Disney's 28th animated feature of the same name.

1990s[edit]

McDonald's in First McDonald's in Russia, Moscow, Russia
McDonald's in Saint Petersburg, Russia
McDonald's in Sanya, Hainan (China). This one is a soft drink/ice cream stand.
  • 1990: On January 31, the first Soviet McDonald's opens, in Moscow. At the time it is the largest McDonald's in the world. Although this has been described as being opened by McDonald's Canada "for political reasons" this was completely untrue. All of the McDonalds restaurants in all of the former Soviet Union are wholly owned by McDonalds Canada with no input from the U.S. parent company; a wall display within the restaurant shows the Canadian and Soviet flags. (again because the US parent was not involved at all) To overcome Soviet supply problems, the company creates its own supply chain, including farms, within the USSR. Unlike other foreign investments, the restaurant accepts rubles, not dollars, and is extremely popular, with waiting lines of several hours common in its early days.
  • 1990: Many other McDonald's restaurants open in Eastern Europe.
  • 1990: In October, the first McDonald's opens in mainland China, in the city and Special Economic Zone (SEZ) of Shenzhen, Guangdong province.
  • 1991: McDonald's opens its first restaurant in Portugal (expect Macau), in Lisbon's Cascaishopping.
  • 1992: The first McDonald's opens in Africa, in Casablanca, Morocco.
  • 1992: Stella Liebeck receives third-degree burns from coffee purchased at a McDonald's drive-through. She sued in what became known as the McDonald's coffee case.
  • 1992: Derek Wood, an employee, and two friends rob a McDonald's in Sydney River, Nova Scotia, killing three and severely injuring another. Wood is serving a life sentence for his role in the Sydney River McDonald's murders.
  • 1992: On April 23, the world's largest McDonald's opens in Beijing, China (over 700 seats). Along with adjacent buildings, it is later demolished.
  • 1992: On April 28, seven McDonald's restaurants are bombed in Taiwan, killing one policeman and injuring four.
  • 1992: The first Polish McDonald's restaurant opens in Warsaw, 17 June.
  • 1992: The fried apple pie is replaced with a baked apple pie.
  • 1992: The Aladdin magic cups are not seen at McDonald's restaurant, they are only at Burger King.
  • 1993: The company launches its first seagoing restaurant aboard the Finnish cruiseferry Silja Europa, sailing between Helsinki and Stockholm.
  • 1993: On December 8, McDonald's opens its golden arches in Saudi Arabia for the first time.
  • 1993 McCafé is launched in Melbourne, Australia by Ann Brown. By 2002 the chain had spread to 13 countries worldwide. The first one in America was launched in 2001. By 2003 it was the largest coffee shop brand in Australia and New Zealand.
  • 1993: McDonald's Holiday Film Festival has Paramount Videocassettes (such as the children's classic Charlotte's Web or the smash hit Ghost, The Addams Family or Wayne's World), however Paramount Videocassettes are not seen at McDonald's restaurant during the 1993 holiday season.
  • 1994: The Catalyst Award is given to McDonald's in honour of their program to foster leadership development in women.
  • 1994: McDonald's Holiday Film Fest has MCA/Universal Videocassettes (such as Field of Dreams, Back to the Future, The Land Before Time and Fievel Goes West).
  • 1995: McDonald's receives complaints from franchisees that too many franchises are being granted, leading to competition among franchisees. McDonald's starts conducting market impact studies before granting further franchises.
  • 1995: In an effort to cultivate a more "adult" image, McDonald's launches the Arch Deluxe sandwich with a massive ad campaign. Both the campaign and sandwich fail miserably and are quickly discontinued.
  • 1995: Following the end of apartheid, the first McDonald's in South Africa opens.
  • 1996: First McDonald's opens in Belarus, marking the chain's 100th country (by its own calculation; however, this total included many non-sovereign territories). At the opening ceremony, the Belarusian militia are accused of brutality toward members of the public hoping to enter the restaurant in Minsk.
  • 1996: First McDonald's opens in Lima, Peru, managed by Operaciones Arcos Dorados de Perú S.A.
  • 1996: The first Indian McDonald's opens.
  • 1997: McDonald's wins the "McLibel" case, in what many consider to be a Pyrrhic victory in terms of the company's image. Only about half of the counts are in McDonald's favour despite enormous legal resources deployed against self-representing defendants.
  • 1997: McDonald's has Hercules Happy Meal with two toys from Disney's thirty-fifth animated feature.
  • 1997: The McFlurry is invented by a Canadian franchise.
  • 1998: Jack M. Greenberg succeeds Michael R. Quinlan as CEO.
  • 1998: The first Pakistani McDonald's opens in Lahore immediately followed by a branch in Karachi after one week.
  • 1998: Disney/Pixar and McDonald's begins their 7-year promotional partnership.
  • 1999: First McDonald's restaurant opens in Tbilisi, Georgia. Jack Greenberg is elevated to Chairman and CEO.
  • 1999: French leftist activist José Bové and others gain worldwide attention when they destroy a half-built McDonald's franchise in Millau (Aveyron). The incident follows a European Union ban on American meat imports, on the grounds that they use hormone treatments; in response the U.S. had increased import duties on French Roquefort cheese and other European Union products. Bové was sentenced to three months in prison for his role in the incident.

2000s[edit]

  • 2000: Eric Schlosser publishes Fast Food Nation, a book critical of fast food in general and McDonald's in particular.
  • 2000: The company opens its 1000th British store, inside the Millennium Dome.
  • 2001: The FBI reports that employees of Simon Worldwide, a company hired by McDonald's to provide promotion marketing services for Happy Meals and the 'Millionaire'/'Monopoly' contest, stole winning game pieces worth more than $20 million.
  • 2002: A survey in Restaurants and Institutions magazine ranks McDonald's 15th in food quality among hamburger chains, highlighting the company's failure to enforce standards across its franchise network.
  • 2002: McDonald's posts its first quarterly loss ($344m), for the last quarter. It responds to the stiff competition from other fast-food restaurants, offering higher quality burgers and more variety, by attempting to move more upmarket by expanding its menu and refitting restaurants. It announces it is withdrawing from three countries (including Bolivia) and closing 175 underperforming restaurants.
  • 2002: In October of this year, McDonald's opens the first of 2 corporate stores in Lincoln, Nebraska to test concept restaurant called "3N1". The concept incorporated a "Sandwich & Platter" casual dining area, a "bakery and ice cream" area featuring gourmet coffees, and a traditional McDonald's into one building.[20] The second store is launched approximately six months later.[21] The concept is spearheaded by Tom Ryan, who was Executive Vice President and Chief Concept Officer at the time. The concept is abandoned in less than a year, and Ryan leaves McDonald's to join Quiznos Sub.[22]
  • 2002: McDonald's introduces a new menu board design featuring realistic photos of its products against a blue-white gradient background.
  • 2003: James Richard Cantalupo is elected Chairman and Chief Operating Officer, succeeding Jack M. Greenberg. Just prior to assuming his post Cantalupo shuts down Project Innovate, a global consulting project that had already spent $170 million of a projected 5-year budget of $1.2 billion.[23]
  • 2003: McDonald's starts a global marketing campaign which promotes a new healthier and higher-quality image. The campaign was labeled "I'm lovin' it" and begins simultaneously in more than 100 countries around the world.
  • 2003: According to Technomic, a market research firm, McDonald's share of the U.S. market had fallen three percentage points in five years and was at 15.2%.[24]
  • 2003: The firm reports a $126M USD loss for the fourth quarter.[25]
  • 2003: McDonald's introduces their premium salads, the McGriddles and the chicken selects.
  • 2004: Morgan Spurlock directs and stars in Super Size Me, a documentary film in which he eats nothing but McDonald's food for 30 days to the supposed detriment of his health.
  • 2004: After the release of Super Size Me, McDonald's does away with their Supersize options.
  • 2004: Chairman and CEO Jim Cantalupo dies suddenly at the age of 60 in his hotel room of an apparent heart attack while attending the annual franchisee convention in Orlando, FL on April 19. A 30-year veteran of the organization, Cantalupo had previously served as President and CEO of McDonald's International. He is credited with introducing the premium salad line and reformulating Chicken McNuggets to include leaner, all-white meat.[26][27] Andrew J. McKenna, Sr., a prominent Chicago businessman and a McDonald's director, is elected Nonexecutive Chairman, and Charlie Bell of Sydney, Australia, is elected President and CEO of McDonald's Corporation. A month later Bell is diagnosed with colorectal cancer during a physical exam required for his new post and dies in January of the next year. Like retired chairman and former CEO Fred L. Turner, Bell began his McDonald's career as a crew member. He was promoted frequently, serving as the corporation's Chief Operating Officer and as President of both McDonald's Europe and of the Asia/Pacific, Middle East and Africa Group.[28]
  • 2005: Jim Skinner is elected President and CEO. Skinner began his McDonald's career as a trainee restaurant manager at a McDonald's in Carpentersville, Illinois in 1971 after serving nearly ten years with the US Navy.[29][30]
  • 2005: McDonald's experiments with call centers for drive-through orders. The center, located in Fargo, North Dakota, takes orders from more than a dozen stores in Oregon and Washington. The experiment is in part motivated by labor costs, since the minimum wage in North Dakota is over 40% lower than that in Oregon or Washington.
  • 2005: Owing in part to competitive pressure, McDonald's Australia adopts "Made for you" cooking platform in which the food is prepared from pre-cooked meat after the customer orders (as opposed to the firm's normal procedure since 1948, in which the food is cooked then sold as needed). It should become standard practice in all Australian restaurants by 2007. Some restaurants in New Zealand also follow suit. The practice had earlier been tested, and abandoned, in the U.S.
  • 2005: McDonald's in Singapore began their McDelivery service: customers place their food orders over the phone, and it is delivered to wherever they are. The service is available 24 hours a day, 7 days a week.
  • 2005: McDonald's opens a Wi-Fi service in selected restaurants with Nintendo DS video games.
  • 2005: A fired employee with Asperger's Syndrome, who was terminated for hitting a customer, murders his former manager at a McDonald's outlet in West Sussex, England. Shane Freer (20) stabbed Jackie Marshall (57) to death during a children's party at the fast food restaurant she was supervising. Freer was convicted and sentenced to life in prison by Lewes Crown Court.[31]
  • 2005: Ronald McDonald gets a leaner, sportier look.
  • 2006: McDonald's announces that it will include nutritional information on the packaging for all products beginning in March[32] and that its upcoming menu changes will emphasize chicken, salads, and other "fresh foods" rather than hamburgers.[33]
  • 2006: McDonald's begins their "forever young" branding by redesigning their restaurants.
  • 2006: Anna Svidersky is murdered by David Sullivan while working in an Anderson Road McDonald's in Vancouver, Washington.
  • 2006: McDonald's and Disney end their 10 year promotional partnership.
  • 2007: DreamWorks Animation and McDonald's begins promotional partnership.
  • 2007: McDonald's reintroduces its 42-ounce super-size soda under the name Hugo.
  • 2008: McDonald's introduces the McSkillet burrito. This larger breakfast consists of scramble eggs, red & green bell peppers, onions, potatoes, salsa and sausage wrapped in a flour tortilla.
  • 2008: McDonald's introduces the Chicken Biscuit and the Southern Style Chicken Sandwich.
  • 2008: In November, McDonald's starts phasing in new designs for their containers. On October 31, they also introduced a new menu board design featuring warmer, darker colors, more realistic photos with the food on plates and drinks in glasses. The design hit nationwide in 2009 and expanded across the world through 2010.
  • 2009: 20th Century Fox and McDonald's begins promotional partnership.
  • 2009: McDonald's introduces three versions of Angus Burgers: Angus Deluxe, Angus Bacon & Cheese, and Angus Mushroom & Swiss.
  • 2009: First McDonald's opens in Cusco, Peru. Since 1996 a total of 21 McDonald's, 8 McCafé and 36 soft drink/ice cream stands are opened in Lima and across Peru. 20 more McDonald's are scheduled to be opened in the next two fiscal years.

2010s[edit]

  • 2010: McDonald's introduces Real Fruit smoothies and the Angus Snack Wrap.
  • 2010: McDonald's introduces Fruit & Maple Oatmeal to its menu.
  • 2010: Subway surpasses McDonald's as the largest single-brand restaurant chain and the largest restaurant operator globally.[34]
  • 2011: McDonald's reintroduces the Asian salad.
  • 2011: McDonald's makes a deal with the Marine Stewardship Council to certify the fish used for the Filet-O-Fish sold in Europe.[35]
  • 2012: McDonald's begins posting the calories count for items on the menus and menu boards in the drive-thru.[36]
  • 2013: First McDonald's burger restaurant franchise in Vietnam was awarded to the son in law of the Vietnamese prime minister.[37]
  • 2013: McDonald's Australia trials home delivery in selected areas of Sydney, with online ordering available through Menulog[38][39]
  • 2014: (October) McDonald's Australia trials custom made burgers with the choice of buns, cheese, sauces etc. This was launched at the Castle Hill Store in Sydney.[40]

See also[edit]

References[edit]

  1. ^ McDonald's publication. "Corporate FAQ". McDonald's Corporation. Retrieved 2012-11-27. 
  2. ^ a b c d e f g h "MCDONALDS CORP 2013 Annual Report Form (10-K)" (XBRL). United States Securities and Exchange Commission. February 24, 2014. 
  3. ^ a b "MCDONALDS CORP 2014 Q1 Quarterly Report Form (10-Q)" (XBRL). United States Securities and Exchange Commission. May 6, 2014. 
  4. ^ McDonald Corporation. "McDONALD’S CORPORATION 10-K SEC Filing". 
  5. ^ a b c d e f g h Hess, Alan (March 1986). "The Origins of McDonald's Golden Arches". Journal of the Society of Architectural Historians 45 (1): 60–67. doi:10.2307/990129. Retrieved 29 September 2013. 
  6. ^ Skrabec, Quentin R.; Skrabec Jr., Quentin R. (2012). The 100 Most Significant Events in American Business: An Encyclopedia. ABC-CLIO. p. 206. 
  7. ^ Hess, Alan. "The oldest McDonald's as Architecture". Retrieved 2 March 2014. 
  8. ^ "McDonald Brothers". Retrieved 9 February 2014. 
  9. ^ Smith, Craig (November 7, 2002). "North Sea Cod Crisis Brings Call for Nations to Act". New York Times. Retrieved 2010-12-30. 
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