McDonald’s movie lifts lid on big cheese Ray
YET for all the success the company enjoyed in the early days – it had sold 100 million hamburgers by 1958 – it was actually generating relatively small profits. The way to make big money, Kroc discovered, was to concentrate on buying real estate for future outlets and then leasing it to franchisees – a decision that transformed the company’s status.
In the same year that he took charge, Kroc set up the Hamburger University, where franchisees were given step-by-step instructions on running a restaurant. They would come up with some of the company’s major innovations, including the Big Mac.
Before long Kroc was being hailed as not just the company’s guiding light but its founder too. Memories of the McDonald brothers were gradually pushed into the background.
The most contentious scene comes when Kroc strikes the final pay-off deal with the brothers, agreeing to pay them a royalty. It is a handshake agreement which Kroc, the film claims, did not honour.
Kroc’s biographer Lisa Napoli denies there was any royalty agreement: “Since McDonald’s was cashpoor in 1961,” she writes, “Ray asked the brothers if he could pay their requested $2.7million over time. The brothers said no, that if Ray couldn’t come up with the cash they’d continue to collect their royalty. Harry Sonneborn, Kroc’s financial adviser, found a backer and the brothers got their money. No one knew at the time how much McDonald’s would grow.”
Kroc died in 1984, Mac in 1971 and Dick in 1998. Dick’s grandson Jason French, who handled the family’s dealings with the film-makers, insists his grandfather never displayed any bitterness over the money. It was a different matter with Kroc’s claims to be the founder.
French says that when he was growing up he remembers visiting a McDonald’s with his grandfather and seeing a plaque which credited Kroc as the founder. “I pointed at it and said, “Poppa, I thought you were the founder?”
As for the brothers’ restaurant – the original McDonald’s – Dick and Mac clung on to it, much to Kroc’s irritation. But they were forced to give it a new name, the “Big M”, and Kroc soon afterwards opened a McDonald’s nearby. It wasn’t long before it put the Big M out of business.
The Founder opens tomorrow