Transcript for:
Lecture on Ray Kroc and the McDonald's Story

in 1954 ray kroc michael keaton is a salesman struggling to sell multimixer's milkshake machine small drive in businesses across the country however as much as ray tries to win over these places he keeps striking out his travels also find him at the mercy of the small business's food serving techniques which often take too long to serve or get his order wrong rey is also not much of a fan of the teenage clientele that seem to hang around most of these places checking with the sales company in chicago his secretary june martino cadenyland informs ray that a restaurant in san bernardino california has ordered six of his machines thinking this must be an error ray calls the restaurant where he is informed that the order of six machines was an error and that they really want to order it pete by the call ray drives to san bernardino where he finds a small wall cup stand called mcdonald's where he gets in line with a number of people and is surprised at how fast his order is processed the disposable food wrappings as well as seeing a number of small families ordering from the stand brainx meets with the owners of the stand mac mcdonald john carroll lynch and dick mcdonald nick offerman back eagerly shows her around the small stand explaining the exacting standards they use to prepare items as well as the custom-made serving tools to help them achieve their speedy service system over dinner the brothers explained their history to rey originally coming to hollywood to work and film they eventually opened a movie theater that was forced to close due to the great depression they next opened a food stand in monrovia which was eventually moved to san bernardino where their current food stand is realizing that the bulk of their profits came from selling hamburgers french fries and milkshakes the brothers focused on making these the only items their stance sells also making it just a simple food stand eliminated the lightering of teenagers has seen it drive in restaurants and the disposable food packaging cut down on dish and silverware costs to figure out their speedy delivery system the brothers and a number of employees spent an afternoon at a tennis court drawing chalk configurations on the courts to figure out the most efficient layout possible for the food preparation all of this information fascinates ray and shortly afterwards he proposes that the brothers franchise their restaurants they both claim they tried this in several areas but encountered problems maintaining quality standards beyond their own place during the meeting ray notices a painting on the wall of an unusual building mack explains it was a design deck had made up and used in their phoenix location this sends ray down to phoenix where upon seeing the location and its golden arches becomes obsessed with trying to get the brothers on board with his idea ray continues his attempts to sell his multi-mixers but still meets with failure driving through a number of town he takes note of churches and government buildings and then comes at the mcdonald brothers with a new angle mcdonald's restaurants can be a family-oriented place that means just as much to america as government and churches dick is still skeptical about the idea but matt convinces his brother to trust ray given that he promises to uphold the integrity of their restaurants soon the contract is drawn up for the brothers and dre with a major stipulation being that no franchise decisions or changes can be made without the brother's consent ray quickly signs the paperwork and then gets to work putting in a mcdonald's in day planes illinois finding funding proves to be a tough task and ray eventually has to mortgage his home as leverage but does not tell his wife ethel lord turn about this when the day plane's location opens ray takes great steps to make sure that the operations are carried out just as the brothers did in san bernardino however he ends up putting hats with them when he attempts to get sponsorship dollars for you coca-cola by putting their name on the menu boards while ray sees it as a great business idea dick mcdonnell claims they will commercialize their eatery lauray is excited about the new restaurant his wife ethel is still unsure about his latest business venture the two end up going to a nearby country club where during a conversation ray pitches the idea of mcdonald's franchises to several men who quickly want to get in on the lucrative new business venture however rey soon grows in sense that the new franchisees lack of quality control and attention to the menu standards with one place even selling fried chicken they attempt to tell the franchisees to do better but finding they don't seem to care about the franchise standards like he does he cancels his and his wife's membership with the country club much to her shock and attempts to find other ways to get new franchisees taking his wife to a vfw potluck and hearing from some people there rey soon realizes where he can get new franchisees by appealing to the american working class soon even more franchises are popping up but he eventually goes to the opening of a mcdonald's in minneapolis minnesota later on that evening at a fancy restaurant he speaks with several men including raleigh smith patrick wilson who has eyes on becoming a franchise owner too as they speak rey can't keep his eyes off a woman playing a nearby piano only for raleigh to inform him that this is raleigh's wife joan linda cardellini even though she is taken rey seems to have taken a shine to joan but he attempts to expand beyond the midwest but runs into many problems the 1.4 percent of the profits he agreed to isn't enough to live on and he calls the brothers hoping to renegotiate but they refuse ray also finds out that the refrigeration costs of storing ice cream in the stores is eating into his profit margins and his wife also learns that he has mortgaged their home causing further tension between them rey eventually pays a visit to joan and rowley's franchise upon learning about rey's issues with refrigeration joan proposes they use a powdered milk mix that is just like a real milkshake upon sampling the insta mix ray eagerly proposes his cost-saving idea to dick mcdonald but is once again refused when ray attempts to take out another loan to deal with his financial troubles he ends up meeting a young man named harry sonnenborn bj novak soniborn is allowed to look over the company's financials and soon finds a solution to raise manubos when it comes to franchises rey should buy the land where the mcdonald's locations are going to be built if he owns the land this allows the franchise owners to lease the land from him allowing him not only to have monthly rent payments coming in but also having the land control makes the franchises more adherent to quality control standards sunborne's proposal works and rey soon changes his company's name to franchise realty corporation when dick mcconnell calls up about this ray claims frc is separate from mcdonald's and does not fall under the terms of their contract bay also has the franchises soon using insu mix for making milkshakes leading to another upsetting call by dick mcdonald even though dick claims they have a contract rae wouldn't back down claiming that like hearts contracts are meant to be broken during this time ray's infatuation for joan has been growing leading him to eventually divorce his wife ethel in terms of a settlement rey is willing to give her the house car and their insurance policy but wants everything having to do with mcdonald's to remain in his name ray also begins to have lawyers look into renegotiating his contract with the mcdonnell brothers no matter the cost bay's actions soon irritate the brothers further when a letter arrives to them with an official letterhead treating the mcdonald's corporation and rey's name listed as president the two call a prey with matt getting the most vocal about what ray has done leading to mack getting upset enough to go into a diabetic shop after mack is admitted to a hospital rey shows up with flowers in the letter which contains a blank check a symbol that shows rey means to buy out the brothers share in the company realizing they can't win in a fight with rey the brothers set their terms they call for 2.7 million dollars ownership of the san bernardino store and one percent of the company's profits while ray is willing to sign off on almost everything he claims that the one percent deal will have to be carried out on a handshake basis which the brothers agreed to following the negotiations dick encounters frey in the restroom and asks the man who bought them out a question given everything he found out about their company and how it was run why didn't ray just steal their idea and create his own restaurants they claims that such an endeavor would have failed and that when it came to what dick and mack had it wasn't just a system in place that enticed him but the name tourey the name mcdonald's sounded all american and appealing to the general public the brothers are forced to remove their name from their place soon rebranding it as the begin if you enjoyed this video and want to hear from me again be sure to hit the subscribe button before you go thanks for watching