In 1954, Ray Kroc orchestrated the coldest betrayal in business history…
He deceived the McDonald's brothers into losing their business.
Then, through pure greed and deception, he turned their burger stand into a $200B empire.
Here's how McDonald's really started... 🧵
Custom tools, disposable packaging, a streamlined menu - McDonald's was unlike anything Ray Kroc had seen.
In a nutshell, what started as a failed movie theater led to a hot dog stand, now a GENIUS drive-in restaurant.
That's not all...
The McDonald brothers' Speedee Service System was the game changer:
• Limited menu for simplicity and speed
• Disposable packaging for fast service
• Custom kitchen layout for optimal flow
These innovations paved the way for the fast-food industry today...
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The McDonald brothers had a genius system to design their menu to just burgers, fries, and drinks.
They even created a custom kitchen layout to maximize efficiency!
But after previous failed attempts at franchising, they were hesitant to expand.
Kroc saw McDonald as a CASH COW. He pitched aggressive franchising with strict quality control.
Funding was tight so Kroc even secretly mortgaged his home.
Even with clashes with the brothers threatening the deal, Kroc had one word in mind... FRANCHISE!!!
Ray Kroc was a genius in hindsight...
• Positioning himself as the face of McDonald's
• Recruiting ambitious, middle-class franchisees
• Maintaining rigorous standards across all locations
When the brothers resisted change, Kroc got more creative (and evil)...
Example with their Milkshake machine:
When Kroc's advisor, Harry Sonneborn, helped him see McDonald's as a real estate play.
Kroc divorced his wife, giving her EVERYTHING but ZERO of his McDonald's shares.
He bought out the McDonald brothers for $2.7M with a handshake promise of 1% annual royalties...
...which he would NEVER honored.
Kroc opened a McDonald's right across from the original restaurant, forcing the brothers to rename.
"The true value of McDonald's is the name itself," Kroc declared.
The McDonald brothers were screwed...
Watch this:
Here's what Kroc had to say about "founding" McDonalds...
What are your thoughts on this?
In speeches, Kroc credited his success to persistence.
But had he kept his handshake deal, the McDonald brothers would've earned $200M PER YEAR!
His last line in this video sum up EVERYTHING... “Contracts are like our ice cream machines, their made to be broken “
Ouch.
Under Ray Kroc's franchise control, at all time:
• Maintain strict oversight of operations
• Recruit passionate, hands-on franchisees
• Leverage real estate for long-term profits
These savvy tactics fueled McDonald's explosive growth in the 1960s. Business is War.
What I learned from McDonald's story:
• Streamline your business model for efficiency.
• Look for creative funding and expansion strategies.
• Maintain strict quality control across all franchises.
But most importantly, PROTECT your interests, even if it means making tough calls
ALWAYS get agreements in writing. A $2.7M buyout and a broken handshake deal...
Kroc's refusal to pay the McDonald brothers their promised 1% royalties cost them $200M per year!
Be careful.
Ray Kroc's vision and the McDonald brothers' ingenuity reshaped an entire industry.
But at what cost?
Just some thoughts to ponder on, the next time you visit a McDonald'S.
What do YOU think about this thread?
That's wrap
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