Ray Kroc
Ray Kroc | |
|---|---|
| Born | October 5, 1902 |
| Died | January 14, 1984 (aged 81) |
| Cause of death | Heart failure |
| Nationality | American |
| Occupation | Entrepreneur |
| Political party | Republican |
| Spouse(s) | Ethel Fleming (1922–1961) Jane Dobbins Green (1963–1968) Joan Kroc (1969–1984, his death) |
Raymond Albert "Ray" Kroc (October 5, 1902 – January 14, 1984)[1] was an American businessman who took over the small-scale McDonald's Corporation franchise in 1954 and built it into the most successful fast food operation in the world. Kroc was included in Time 100: The Most Important People of the Century,[2] and amassed a $500 million fortune during his lifetime.[3] He was also the owner of the San Diego Padres baseball team starting in 1974.
Early life and career
Kroc was born to parents of Czech origin in Oak Park, Chicago, Illinois, in 1902. He grew up and spent most of his life in Oak Park, Ill. During the First World War he trained to become an ambulance driver. At this time he befriended Walt Disney who was also in training. The war ended before Kroc saw action. Between the end of the war and the early 1950s he tried his hand at a number of trades including paper-cup salesman, pianist, jazz musician, band member and worked at an Oak Park radio station.[4] At one time, Ray worked for room and board at one of Ray Dambaugh's restaurants in the mid west to learn the restaurant business. Years later, he returned the favor by coming to Ray Dambaugh's funeral in Evans City, Pennsylvania to pay his respects. He eventually became a multi-mixer milkshake machine salesman, traveling across the country.
Convinced that he could sell mixers to every new restaurant that they opened, he partnered with the McDonald brothers who were looking for a new franchising agent as their current agent Bill Tansey left them due to health issues. Kroc eventually became frustrated with the brothers' willingness to accept their chain having only a handful of restaurants. In 1961, he purchased the company from the brothers. The agreement was for the McDonalds to receive $2.7 million for the chain and to continue to receive an overriding royalty of 1.9% (when negotiating the contract the McDonald brothers said that 2% sounded greedy, 1.9% was much more attractive) on the gross sales.[4]
The agreement was a handshake with split agreement between the parties because Kroc insisted that he could not show the royalty to the investors he had lined up to capitalize his purchase. At the closing table, Kroc became annoyed that the brothers would not transfer to him the real estate and rights to the original unit. The brothers had told Kroc that they were giving the operation, property and all, to the founding employees. Kroc closed the transaction, then refused to acknowledge the royalty portion of the agreement because it wasn't in writing. The McDonald brothers consistently told Kroc that he could make changes to things like the original blueprint (building codes were different in Illinois than in California), but despite Ray's pleas, the brothers never sent any formal letters which legally allowed the changes in the chain. Kroc also opened a new McDonald's restaurant near the McDonald's (now renamed "The Big M" as they had neglected to retain rights to the name) to force it out of business.[5]
After finalizing the agreement with the McDonald Brothers, Kroc Sent a letter to Walt Disney. The two were acquaintances from a while ago. Kroc wrote,"I have very recently taken over the national franchise of the McDonald"s system. I would like to inquire if there may be an opportunity for a McDonald's in your Disney Developement." Disney agreed under stipulation to increase fries from ten cents to fifteen cents allowing himself the profit. Kroc refused to gouge his loyal customers leaving Disney to open without a McDonald's restaurant.[6]
Kroc created a new kind of fast food with McDonald's, implementing Henry Ford's assembly line idea into his restaurants. He also utilized standardization, a business tactic that he used to make sure that every Big Mac would taste the same whether a person is in New York or Tokyo. Kroc also revolutionized the art of franchising, where he set strict rules on how the food was to be made. These strict rules also were applied to customer service standards with such mandates that moneys be refunded to clients whose orders were not correct or to customers who had to wait for more than 5 minutes for their food. However, Kroc let the franchisees decide their best approach to marketing the products. For example, Willard Scott created the internationally recognized figure known as Ronald McDonald to improve sales of hamburgers in the Washington, D.C. area.
Kroc established various foundations for alcoholics, and also started the Ronald McDonald House foundation.
Death and personal life
Kroc died of heart failure at Scripps Memorial Hospital in San Diego, California, on January 14, 1984 at the age of 81. At the time, Kroc was married to his third wife, Joan. He had been married twice before, to Ethel Fleming (1922–1961) and Jane Dobbins Green (1963–1968).
References
- ^ "nndb.com". Retrieved 2008-10-12.
- ^ TIME 100: Ray Kroc
- ^ http://www.wiley.com/legacy/products/subject/business/forbes/kroc.pdf
- ^ a b cf. "Grinding It Out" 1977 by R. Kroc
- ^ cf. "Grinding It Out" 1977 by R. Kroc, page 123
- ^ Schlosser, Eric. "Fast Food Nation". New York, NY.Harper Collins Publishers. 2002. Print.