Every day, McDonald's feeds more than 68 million people, or nearly one per cent of the world's population. Every second, 75 McDonald's hamburgers are sold. It's estimated that daily customer traffic at McDonald's sits around 62 million, which nearly meets the population of Great Britain.
These figures are staggering, but may not be entirely surprising. McDonald's is an enterprise that has long been accepted as one of the world's healthiest (even if the food it churns out is criticized as anything but). However, it may surprise some people to learn that the man who catapulted the company to overwhelming success is not, in fact, from the McDonald family.
Raymond Albert Kroc was born on October 5, 1902, in Oak Park, Illinois. As a boy, Ray's father took him to see a phrenologist (a practitioner who predicts the future by reading the bumps on a person's head). Ray's chart revealed that his future would lie in the food-service industry, and it was a forecast that proved to be flawless.
At a young age, Ray showed promise as a salesman in the food industry. While in grammar school, he started a lemonade stand. Later on, he worked in a grocery store and spent a summer behind the soda fountain at a different store. As his interest in selling was burgeoning, his patience with school was slipping and WWI was breaking out. He dropped out of school and at 15, lied about his age to drive ambulances during the war as part of the Red Cross.
When he returned home, he took a job as a salesperson for Lily-Tulip Cup Co. He sold paper cups for the company and eventually met a man who introduced him to a five-spindle milkshake-mixing machine called a Multimixer. Ray saw potential in the machine and quickly joined the Multimixer team as a traveling salesman.
It was during his travels for Multimixer that he encountered two brothers, named Maurice "Mac" McDonald and Richard "Dick" McDonald, who purchased eight milkshake machines. He was intrigued by their unusually high order and visited their location. What he found was a small San Bernardino, California restaurant called McDonald's, which was vastly unlike the popular drive-in restaurants of the time. Their establishment was self-service, had no indoor seating, and the menu was restricted to cheeseburgers, hamburgers, fries, drinks and milkshakes. All items on the menu were produced in an assembly-line manner, which allowed customers to place their orders and pick up their meals in under a minute.
Ray was immediately impressed, and equally infatuated, with the McDonald brothers' unorthodox methods. He saw an opportunity to reap significant financial rewards if the restaurant could expand and open across the country. His ambitions for the company far exceeded those of the McDonald brothers, so he pitched his idea of expanding and was eventually given the rights to sell the McDonalds’ method. It was Ray's goal to open 1,000 McDonald's restaurants across the United States.
Ray took the helm of the company as president in 1955. He opened the first location outside of San Bernardino in April 1955 with a location in a Chicago suburb. He held onto the assembly line approach created by the brothers, but also introduced automation, standardization and discipline. He chose the franchise owners wisely and put them through an intensive program, which operated out of a McDonald's basement in Elk Grove, Illinois and was called Hamburger University (the certificate up for grabs was "hamburgerology with a minor in French fries").
Additionally, he developed a 75-page manual outlining every element of how he wanted McDonald's restaurants to run. Burgers had to be precisely 1.6 ounces, served with a teaspoon of mustard, a tablespoon of ketchup and a quarter ounce of onion. There were stipulations around the cutting of fries, and there were even rules regarding the cleaning of restaurants.
Ray was business-oriented and focused on expanding into suburban areas. But he realized that the agreement he had made the McDonald brothers wasn't benefiting him. For every franchise he sold, he received 1.9 per cent of the gross sales. From that, the brothers were granted one-half per cent. It was an attractive deal for the brothers, but left Ray without the heavy wallet he wanted.
His approach shifted when he met Harry Sonnenborn, a financial genius who showed Ray how to sell real estate rather than hamburgers. Under Harry's tutelage, Ray purchased or leased land on which the McDonald's restaurants would be located. Franchisees then paid him a monthly rental or percentage of their sales. Through owning the land that the franchises were built upon as opposed to only the franchises themselves, Ray was sure to reel in a hefty profit.
Armed with this knowledge, he decided to entirely buy out the brothers in 1961 for $2.7 million in cash. It was his understanding that the deal included the original San Bernardino location, but the brothers argued that it didn't. Ray showed a nasty streak when he told an employee around this time, "I'm not normally a vindictive man, but... I'm going to get those sons-of-bitches." And he knew how to burn them. Without the rights to their own name, the McDonald brothers were forced to rename their restaurant The Big M. Spiteful as he was, Ray opened a McDonald's restaurant one block away, quickly running The Big M into the ground.
Without the McDonald brothers to answer to, Ray was free to run with his newly acquired business. In 1965, he had opened more than 700 restaurants in 44 states. In April of that year, McDonald's became the first fast food company to go public. By the late '60s, Ray was a multimillionaire with nearly 1,500 locations around the globe. He relinquished the role of president in 1968 and assigned himself to chairman of the board. When the 1970s hit, McDonald's was the largest food supplier in the States.
Ray retired as chairman of the board in 1976 and concentrated instead on the San Diego Padres baseball team, which he bought in 1974. He wasn't totally removed from McDonald's though, as he took on the role of senior chairman until he died of heart failure in 1984. He was 81 when he passed away in California.
By the time of Ray's death, a new McDonald's was opening on average every 17 hours. Similarly, there were over 7,500 McDonald's locations in 31 countries and the enterprise was worth $8 billion. Ray's personal fortune was estimated at $500 million.
Ray married three times: in 1922, he wed Ethel Fleming; in 1963, he walked down the aisle with Jane Dobbins Green; and in 1969, he and Joan Mansfield wed and were together until he died. He has one daughter named Marilyn.
Ray revolutionized fast food and took McDonald's from a small independent business to an unstoppable dynamite company. Currently, there is at least one McDonald's restaurant in over 120 countries. According to surveys, the golden arches are recognized by more people than the cross. With $27 billion in revenue, McDonald's is the 90th largest economy in the world.
The company's success has been, and is, anchored in Ray's philosophy: "The definition of salesmanship is the gentle art of letting the customer have it your way." ~Matthew Pariselli