Recently everybody in the society has become so enthusiastic about the movie called “The Founder”. “The Founder” is a movie that tells the story behind the origins of McDonald’s and how Ray Kroc was able to rewrite the history to call himself the “founder” of one enormous company (Close, 2016). Some people strongly believe that this movie unveils all the historical truth of McDonald’s coming to existence all the way from the beginning to being the world’s biggest restaurant chain by revenue that serves more than 69 million customers in a daily basis in more than 100 countries as of 2016 (Wikipedia Contributors, 2018). However, there are some other McDonald’s fans who think that the movie could not bring up the whole story behind Ray Kroc’s success. As a curious student, I would like to discuss about how Ray Kroc could turn the single-outlet burger restaurant into a global success story and what I learnt from the Ray Kroc’s experience in becoming successful will be the main point in this reaction paper.
“The Founder” is a biographical drama film that was released in 2016. The director of the movie is John Lee Hancock and it was written by Robert Siegel who said that the script was based on Ray Kroc’s autobiography (Wikipedia Contributors, 2018). The main character, Ray Kroc, is a 50-year-old salesperson who was selling milkshake mixers without much success. He travels a lot to sell as many milkshakes as he can, hoping to drum up his business. Unfortunately, he cannot sell enough milkshake mixers as other businesses (all those restaurants he visits) are also having hard time to stay in the float mainly because of the moving of the people from cities to suburbs.
That’s why they refuse Ray’s offers, but Ray keeps trying and trying until one day, his secretary tells him that there is an unexpected order for 6 mixers from one burger place in San Bernardino. Out of curiosity Kroc calls this single-stand in order to know if the order is really for 6 mixers and the customer, McDonald brothers, adds 2 more milkshake mixers totaling the order up to 8. With his curiosity at peak, Kroc drives to California to find out what kind of business can be producing that many milkshakes and what differs this business from the others to which he could not sell not even a single blender lately.
When he arrives at the McDonald’s, he sees more people waiting in line than he has ever seen at any drive-in restaurants (Close, 2016). After trying the burger from McDonald’s, Ray remains shocked by its popularity, fast service, disposable packaging, family-friendly environment and on top of that – high quality of food. Then, Ray meets with Maurice and Richard McDonald who explain him everything in detail like an open book – from the opening of the store to the latest innovations in the kitchen and how they came up with the brilliant idea of using the assembly line concept in the hamburger business.
After observing McDonald brothers’ story, Ray thinks that they should franchise the restaurant as it is too good to be available only in one place. But the brothers refuse his suggestion admitting that they have already tried franchising before and it did not work for them as the franchisees were usually irresponsible in maintaining McDonald’s unique system (Wikipedia Contributors, 2018). But Kroc persuades them to give him the marketing right to go out and promote McDonald’s following the deal Kroc makes with the McDonald brothers to pay them 0.5% of all future sales (Close, 2016). Over the next 5 years, he establishes a chain of 228 McDonald’s and this, eventually, leads to an annual gross of 56 million by 1960 (Close, 2016). Kroc becomes so successful that, eventually, buys out the brothers for 2.7 million dollars making himself the only owner of McDonald’s.
After watching the movie, I realized that Ray Kroc had been through a lot when founding the McDonald’s. He had a lot of hard times and struggles but he kept going on and as a result, he became successful and founded an enormous company. The movie teaches a lot of business lessons in the example of Ray Kroc – the man with a lot of strengths, the man who faced a lot of threats and the man who was able to use most of the opportunities he had wisely even though he was 50 years old at that time.
His most important strength that led to his success is his perspective and persistence. His perspective is that he always believes that it is never too late to start something. It is an important tool for all businessmen out there as Ray Kroc started when he was 50 years old. Moreover, persistence of a man is portrayed as a very strong and necessary tool in the movie. In one scene, Ray Kroc listens to strong motivational speeches about persistence. It is said that nothing in the world can replace persistence and determination – talent will not and nor will the education. Because Kroc was a very persistent and determined man, he could get back up on his foot and continue when life knocked him down multiple times in his business career. As a result, Kroc is portrayed as one of the most successful businessman and legend of that time (Lee Hancock, 2016).
Additionally, I believe, Kroc’s curiosity is his next biggest strength as it is a crucial character to find fresh ideas in business world. During his hard times, Kroc gets an order for 6 milkshake mixers and out of his curiosity, he decides to visit this restaurant instead of processing the order and avoiding a long distance. Here, he finds his next business.
Moreover, exploring and innovating new ways to serve customers’ needs is another essential focus in the movie. It is clear from the movie that marketers should always work on exploring new ways to serve and meet the customers’ needs in order to be successful in the business, to improve the efficiency and to do this being innovative plays an important role. This important aspect of business and marketing is listed in the movie in the example of McDonald brothers’ various innovations. One of them exploiting the assembly line concept that was originally introduced by Henry Ford for cars in the hamburger business – something that no one had ever done before (Wikipedia Contributors, 2018). The brothers optimized this concept to fit to their business and made sure that the speed should not affect the quality of the burgers.
Finally, and equally importantly, there is one character of Ray Kroc that almost everyone appreciates him for. At some point, the movie concentrates on Kroc’s ability to think big and see the big picture outside of the box – the character that Kroc had in real life too. Thinking big necessitates extending the boundaries of possibilities and taking risks by observing the market and customers’ needs. In the time when McDonald brothers decided to limit their business with one, but best restaurant instead of having many mediocre ones, Ray Kroc thought big and with the help of his persistence, he discovered and was able to master the art of expansion using franchisee model (Pamnani, 2017).
In my opinion, his first weakness or the lack of his business is lack of capital. After making a contract with the McDonald brothers Kroc started franchising the company and found lots of partners growing the number of franchises. But he started to have financial problems as his overdraft from the bank was higher and the banks were insisting that he should reduce them and he had to mortgage his own house. If he had more capital he could have run the business more freely.
Next, and more important weakness is Kroc’s contract with the brothers. Before starting franchising the company Kroc signed a contract with McDonald brothers that every single change to the company should go through the inspection of brothers and Kroc had to follow this contract. Because of this contract Kroc had to give up most of his brilliant ideas that could bring lots of fortune. For example, building an underground level to the store was not approved by the brothers in favor of the safety of the customers. Kroc’s possible partnership with Coca Cola was not approved either because brothers thought it was against their core value and quality. On top of that, using instant milkshakes to save refrigeration equipment costs which could bring lots of profit to both Ray and other franchise owners was rejected by brothers. That’s why Ray always felt like he was constrained by the contract and continually looked for ways to free himself from the contract (Miranda, 2017).
The biggest opportunity at that time was the increasing demand for fast served meals as all the other drive-in restaurants used to take ages to serve the food and the food was usually switched. People needed a restaurant that could meet their requirements and at the same time should be able to serve quality food (Pamnani, 2017).
The biggest threat that Kroc and his business had to face was the irresponsibility of initial franchise owners who gradually changed menu items – the main reason why McDonald Brothers had to give up franchising. For that reason, Kroc had to search for determined partners who saw core values of McDonald’s as important as Kroc and the brothers did (Lott, 2017).
In conclusion, as a future marketer I can say that the movie taught me a very important lesson – prominent value of a brand name. In the movie Dick McDonald asks Ray why he did not steal their ideas, grab them and start his own business using all those ideas. Ray’s response was that he would have failed and the reason was that he would lack one thing – a very important thing, yet nobody even the brothers did not understand it. What made McDonald’s special was its brand name – that glorious, nice sounding all-American name. This is what Ray Kroc said to Dick McDonald: “It is not just a system; It is the name – that glorious name, McDonald’s” (Lee Hancock, 2016).