Kroc in 1978
|Born||Raymond Albert Kroc
October 5, 1902
Oak Park, Illinois, U.S.
|Died||January 14, 1984
San Diego, California, U.S.
|Cause of death||Heart failure|
|Resting place||El Camino Memorial Park
San Diego, California, United States
|Occupation||Franchising creator McDonald's|
|Spouse(s)||Ethel Fleming (m. 1922; div. 1961)
Jane Dobbins (m. 1963; div. 1968)
Joan Kroc (m. 1969; his death 1984)
Raymond Albert Kroc (October 5, 1902 – January 14, 1984) was an American businessman. He joined McDonald's in 1955 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, and amassed a fortune during his lifetime. He owned the San Diego Padres baseball team from 1974 until his death in 1984.
Kroc was born on October 5, 1902 in Oak Park, Illinois, near Chicago, to parents of Czech origin, Rose Mary (Hrach) and Alois "Louis" Kroc. His father was from the village of Břasy near Plzeň, Bohemia (now the Czech Republic).
After World War II, Kroc found employment as a milk shake mixer salesman for Prince Castle. When Prince Castle Multi-Mixer sales plummeted because of competition from lower-priced Hamilton Beach products, Kroc took note of the McDonald brothers who had purchased eight of his Multi-Mixers. Immediately after visiting the San Bernardino, California store in 1955, Kroc became convinced that the setup of this small chain had the potential to explode across the nation. He offered his services to the McDonald brothers.
Kroc opened the first restaurant of McDonald's, Inc. in Des Plaines, Illinois. Kroc remained active in Des Plaines until the end of his life, frequently phoning the manager of the store across the street to remind him to clean his restaurant properly. The Des Plaines location boomed, bringing in hundreds of dollars on its opening day. Kroc franchised out scores of restaurants to franchisees. The brothers were satisfied with the money they had, and did not feel a need to expand their empire.
Kroc has been credited with making a number of innovative changes in the food-service franchise model. Chief among them was the sale of only single-store franchises instead of selling larger, territorial franchises which was common in the industry at the time. Kroc recognized that the sale of exclusive licenses for large markets was the quickest way for a franchisor to make money, but he also saw in the practice a loss in the franchisor's ability to exert control over the course and direction of a chain’s development. Above all else, Kroc wanted uniformity in service and quality among all of the McDonald’s locations. Without the ability to influence franchisees, Kroc knew that it would be difficult to achieve that goal. By granting a franchisee the right to only one store location at a time, Kroc retained for the franchise some measure of control over the franchisee, or at least those desiring to someday own the rights to another store.
Kroc became frustrated with the brothers' desire to maintain a small number of restaurants. The McDonald brothers also consistently told Kroc that he could not make changes to things like the original blueprint (building codes were different in Illinois than in California), but despite Kroc's pleas, the brothers never sent any formal letters which legally allowed the changes in the chain. In 1961, he bought the company for $2.7 million - enough to pay each brother $1 million after taxes, plus an annual royalty of 1.9%: When negotiating the contract, the McDonald brothers said that 2% sounded greedy; 1.9% was more attractive.
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 was not in writing. Kroc also opened a new McDonald's restaurant near the original McDonald's — now renamed "The Big M", as they had neglected to retain rights to the name — to force it out of business.
After finalizing the agreement with the McDonald brothers, Kroc sent a letter to Walt Disney. They had met as ambulance attendant trainees at Sound Beach, Connecticut during World War I. 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 Development". According to one account, 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 Disneyland to open without a McDonald's restaurant. Journalist Eric Schlosser, writing in his book Fast Food Nation, believes that this is a doctored retelling of the transaction by some McDonald's marketing executives. Most probably, the proposal was returned without approval.
Kroc maintained the assembly line "Speedee Service System" for hamburger preparation, which was introduced by the McDonald brothers in 1948. He standardized operations, ensuring every burger would taste the same in every restaurant. He set strict rules for franchisees on how the food was to be made, portion sizes, cooking methods and times, and packaging. Kroc also rejected cost-cutting measures like using soybean filler in the hamburger patties. These strict rules also were applied to customer service standards with such mandates that money be refunded to clients whose orders were not correct or to customers who had to wait more than five minutes for their food. However, Kroc let the franchisees decide their best approach to marketing the products. For example, Willard Scott created the figure now known internationally as Ronald McDonald to improve sales in the Washington metropolitan area.
By the time of Kroc's death, the chain had 7,500 outlets in the United States and 31 other countries and territories. The total systemwide sales of its restaurants were more than $8 billion in 1983.
In 1974, Kroc decided to retire from being CEO of McDonald's. While he was looking for new jobs, he decided to get back into baseball, his lifelong favorite sport, when he learned that the San Diego Padres were for sale. The team had been conditionally sold by founding owner C. Arnholt Smith to Washington, D.C. grocery-chain owner Joseph Danzansky, who planned to move the Padres to Washington. However, the sale was tied up in lawsuits when Kroc purchased the team for $12 million, keeping the team in San Diego. In Kroc's first year of ownership in 1974, the Padres lost 102 games, yet drew over one million in attendance, the standard of box office success in the major leagues during that era. Their previous top attendance was 644,772 in 1972. The San Diego Union said Kroc was "above all, a fan of his team". On April 9, 1974, while the Padres were on the brink of losing a 9-5 decision to the Houston Astros in the season opener at San Diego Stadium, Kroc took the public address microphone in front of 39,083 fans. "I’ve never seen such stupid ballplaying in my life," he said. The crowd cheered in approval. In 1979, Kroc's public interest in future free agent players Graig Nettles and Joe Morgan drew a $100,000 fine from Commissioner Bowie Kuhn. Frustrated with the team, he handed over operations of the team to his son-in-law, Ballard Smith. "There's more future in hamburgers than baseball," Kroc said.
Kroc's foundation supported research and treatment of alcoholism, diabetes, and other diseases. He established the Ronald McDonald House foundation. He was a major donor to the Dartmouth Medical School.
In 1980, Kroc suffered a stroke and entered a rehabilitation facility for his alcoholism. He died of heart failure at a hospital in San Diego, California, on January 14, 1984, at the age of 81, and was buried at the El Camino Memorial Park in Sorrento Valley, San Diego.
Kroc's third wife, Joan, was a philanthropist. Among many other things, she enabled the founding of The Salvation Army Ray & Joan Kroc Corps Community Centers. His earlier marriages, to Ethel Fleming (1922–1961) and Jane Dobbins Green (1963–1968), ended in divorce.
In popular culture
Kroc co-authored the book Grinding it Out released in 1977. It received positive reviews including from critic Ryan Stewman: "Salesman to salesperson, get the book and read it. You should be inspired by it. Ray was one of us who made it!"
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- Anderson, Robert (March 2009). "Ray Kroc How He Made McDonald's Sizzle". Success. Retrieved June 13, 2011. (excerpt from September 1977 article)
- Pace Eric (January 15, 1984). "Ray A. Kroc dies at 81. Built McDonald's Chain". The New York Times. Retrieved June 12, 2011.
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- Lisa Napoli (2016). Ray and Joan: The Man Who Made the Mcdonald's Fortune and the Woman Who Gave It All Away. p. 28.
- Encyclopaedia Britannica, Inc. (October 1, 2008). Britannica Guide to 100 Most Influential Americans. Encyclopaedia Britannica, Inc. pp. 342–. ISBN 978-1-59339-857-6.
- Neil Snyder (June 15, 2010). Vision, Values, and Courage: Leadership for Quality Management. Simon and Schuster. pp. 133–. ISBN 978-1-4516-0252-4.
- Love, John (1995). McDonald's: Behind The Arches. New York: Bantam Books. pp. 57–60. ISBN 0-553-34759-4.
- Kroc, Ray; Anderson, Robert (1992). Grinding it out: the making of McDonald's. Macmillan. ISBN 978-0-312-92987-9.
- Kroc (1977). Grinding It Out. p. 123.
- Schlosser, Eric (2002). Fast Food Nation: The Dark Side of the All-American Meal. New York, NY: Harper Collins Publishers. ISBN 978-0-395-97789-7.
- Chandler, Bob (2006). Bob Chandler's Tales from the San Diego Padres. Champaign, IL: Sports Pub. p. 71. ISBN 9781596700246. Retrieved February 10, 2015.
- Chandler 2006, p.73.
- Lockwood, Wayne (October 2, 1984). "Ray Kroc's dream finally materializes". The San Diego Union. p. Baseball-12.
- Chandler 2006, pp. 74–76.
- Bock, Hal (August 27, 1979). "Miller Presaged Kroc Escapade". Lawrence Journal-World. Associated Press. p. 14. Retrieved February 10, 2015.
- "Ray Kroc, San Diego Padres Owner and Man who Built McDonald's". Misc. Baseball.
- "Padres Hall of Fame". padres.mlb.com. Archived from the original on September 6, 2014.
- Harris, Scott. "Dismayed by Nuclear Arms Race : McDonald's Fortune Fuels Joan Kroc's Peace Effort". Los Angeles Times. Retrieved January 24, 2017.
- "Ray Kroc". nndb.com. Retrieved October 12, 2008.
- The Bulletin. J. Haynes and J.F. Archibald. 2004.
- Franchise Times. Restaurant Finance Corporation. 2005.
- Stewman, Ryan. "Book Review - Grinding it out". Hardcore Closer. -. Retrieved 17 April 2017.
- Lapin, Andrew. "'The Founder': Michael Keaton Brings A Ruthless Ray Kroc To Life, With Relish". NPR. Retrieved January 25, 2017.
- Boas, Max; Chain, Steve (1976). Big Mac: The Unauthorized Story of McDonald's.
- Byers, Paula K., and Suzanne M. Bourgion, eds. Encyclopedia of World Biography. " Detroit: Gale Research, 1998, s.v. "Kroc, Raymond *Emerson, Robert L. The New Economics of Fast Food. New York: Van Nostrand Reinhold, 1990.
- Kincheloe, Joe L (2002). The sign of the burger: McDonald's and the culture of power. Philadelphia: Temple University Press. ISBN 978-1-56639-931-9. OCLC 47140812.
- Love, John F. (1986). McDonald's: Behind the Arches. Retrieved June 12, 2011.
- Mattern, Joanne (2011). Ray Kroc: McDonald's Restaurants Builder. ABDO. ISBN 978-1-61613-559-1. Retrieved June 12, 2011.
- Reiter, Ester. Making Fast Food: From the Frying Pan into the Fryer. Buffalo: McGill-Queen's University Press, 1991.
- Janice Claire Simpson, Ray Kroc: Big Mac Man (1978)
- Biography: Ray Kroc, Fast Food McMillionaire (1998) video
- Kroc, Ray (2016). Grinding It Out: The Making of McDonald's. ISBN 978-1-250-12750-1.