Customer Reviews

McDonald's: Behind the Arches

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The story behind the ubiquitous golden arches, and the man who expanded them coast to coast, (and today they reach the edges of the Earth). This book provides a reader friendly, detailed synopsis of McDonald's through decades of the original brothers, to Ray Kroc's entry and exit of what would become one of the most recognized oranizations of the world. (Whether this fact has positive or negative implications is another matter entirely). This is a good book about Mickey-D's and sheds light on many other aspects of American history, diet, culture, business and advertising.

Two brothers named McDonald went west to California from the north-east. They came with about about $8 dollars in their pockets (according to them) and got jobs moving props on movie sets in Hollywood (sound familiar?) After some initial business ventures the brothers opened their own small restaurant in San Bernadino.

Meanwhile, in the Midwest Ray Kroc left school at 16, and like almost all other achievers that reached his level of success, he had a strong work ethic and a hard-driving tenacity to succeed. Expecially at concepts that intially proved successful (hence SOP procedures). How ya build opon something that has a good and successful foundation. A gifted, successful salesman from an early age, he got a job selling paper cups and sold them for 17 years as one of the top salesman of his company. Some of his clients for example, were Wrigley field's vendors, among other Chicago establishments. In his late thirties, he started selling shake mixers. McDonald's comes into the picture when Kroc noticed that two brothers who owned a drive-in hamburger restaurant in Southern California, kept ordering lots of shake mixing machines, when Kroc's mixer business was dying out everywhere else in the country. He met the McDonald brothers and was greatly impressed by their practices. Ray implored them to expand and they replied "who'd want to do it, we don't," and Kroc became the seller of their franchises in the Midwest. He was very successful at establishing McD's in that part of the country (hint).

For his work he didn't earn a lot because of the deal he made with the brothers (an inkling of what was to come). So he added a creative and logical way to profit from his diligent work in spreading the franchises. He formed a separate corporation, and when setting up franchises he'd purchase the property where a new McDonald's was to be built, from his own original corporation he created. (Read Robert Kiyosaki's "Loophoes of the Rich" for details). So, with his corporations being the owner of the property, Kroc would either collect the rent, or a percentage of the restaurant's profits, whichever was greater, by contract structure. This allowed him to be compensated more fully in addition to his original deal with the McDonald brothers, which wasn't the most favorable.

Kroc was selling the franchises and focusing on keeping the model and SOPs identical for every franchise. Perhaps an analogy to the assembly line of the Ford. Kroc had a methodology. If a winning method was not altered or diluted by individualistic owner operators or franchise restaurants here and there across the country, the sales, expansion, and growth would continue. McDonald's had tapped into what a large part of the American public wanted in post WWII America. Ray later bought McDonald's from the McDonald brothers for $2.7 million cash. When he discovered after the deal was finished that the original McD restaurant in San Bernadino was not included, and was to be kept by the brothers, Kroc had forced them to change their restaurant's name on legal grounds, and then and built a franchise across the street to put them out of business. The brothers asked for this, and likely didn't understand 3 major things: 1. ethical business practices 2. the law 3. common sense.

Advertising: to help solidify more growth and consumer loyalty, Kroc knew the value of kids. He hired top advertising people: enter Ronald McDonald. After some marketing tests in some particular regions, came the major nationwide promotion to get the kiddies pleading with their parents that they wanted to go to Mickey-Ds. Have you heard kids clamour their parents to do this? I have. And today, McDonald's has continued the kid-concept by investing large amounts into the Playgrounds added onto many of its' stores.

McDonald's represents many things about American culture. To Americans, and today throughout the world. No matter what you think of Mickey D's it's quite an interesting story of how it started, evolved and came to it's ubiquity today. It's a fact that those golden arches are more recognized than the Christian cross. Again, whether we think that's good or not leads to several other issues involving, chemicals and food science, general health, obesity, globalization, homogenization, marketing to children, and corporatization.

For additional insights into the McDonald's phenomenon read, Jennifer Talwar's "Fast Food, Fast Track" and Eric Schlosser's "Fast Food Nation: The Dark Side of the All-American Meal," and Fumento's "Fatland."

Story telling at its best. I couldn't put it down. Miller was given access to inside information about the company far beyond anything I have read anywhere else.

You know how there have been some searing indictments of McDonald's in the last few years, ranging from "Fast Food Nation" to that movie "Supersize Me"?

Well, this book ain't in that category.

Not that this is an OFFICIAL biography of McDonald's or anything, no. It's just that the author is a little too professional to get into the kind of vicious nitpicking that you might expect, given recent lurid developments (obesity lawsuits, bombings of McDonald's, etc.).

No, this book is more of a mature, considered chronicle of the overall health and strategy of the corporation as a whole than a series of cheap take-downs.

True, Love does criticize McDonald's from time to time, but it's not in particularly vicious terms. For example, in the later chapters, he analyzes in some depth the company's ill-fated diversification strategy in the early 90s. He also happily delves into several of Kroc's kooky, doomed ideas.

Unfortunately, many of the "minor hiccoughs" in the company's recent history (e.g., that French farmer that raised a ruckus, that British couple who have devoted their lives to taking them down) are so well-known and fascinating that their absence is keenly felt. And what interesting reading they would have made, given Love's scholarship and even-handedness.

So, while Love is willing, from time to time, to cast a negative light on McDonald's, for the most part the book is a straight macroeconomic history by a man who obviously admires but is not overly-reverential of one of the world's greatest corporations.

If you find that to your liking, you will certainly declare the book an entertaining and useful read -- especially if you're stuck having to write a serious, no-nonsense paper about the chain's corporate strategy, say for a business class.

If you want to know absolutely everything about McDonald's and Ray Kroc, this is the book for you (all 470 pages in #4 font). The concepts (developing suppliers and new products, creating franchising, designing specific equipment, etc.) that McDonald's developed and implemented can and should be used in all industries! Plan at least a month to thoroughly read this book. (The low rating is due to the book length and the author's tendency to repeat stories.)

One of my earliest memories as a child is of Mom and Dad taking the whole darn family to the only McDonald's in our area at that time (mid-60's) in Belmont, California - it was still the old fashioned McD's with giant golden arches and outdoor seating (why they decided to tear all of those down, I have no idea - they were wonderful!). A week after my 16th birthday, I started my first real (non-babysitting) job at the local McD's in Foster City. Although I seldom dine there now (waiting for veggie burgers!), the impact and history of McDonald's has always fascinated me. Before picking up "Behind the Arches" the only book I had read about the subject was "Big Mac - the Unauthorized Story of McDonalds" which in fact is not really the story of McDonalds at all, but rather one of franchising in general with a bit more of a focus on McDonalds.

Mr. Love's book, however, focuses more on the genius of Ray Kroc and Fred Turner; how the corporation relies on its owner/operators and suppliers for new ideas (Filet-O-Fish, Big Mac, apple pies, McMuffin, etc.). The chapters on the development of the perfect frozen french fry and Chicken McNuggets were especially interesting...as well as how McDonald's moved into Japan and Europe. Even if you detest McDonald's food, read this book - HIGHLY recommended.

This is a great bio of a great company. Though it is somewhat dated, this book will set the standard for every deep inquiry into how McDonald's operates. It is simply a remarkable story.

In 1954, salesman Ray Kroc had traveled from Chicago to San Bernardino, California to visit a local restaurant, which was called "McDonald's Famous Hamburgers". Its owners had bought 8 of his Multimixers; with five spindles, he calculated, those Multimixers could churn out 40 milkshakes every few minutes. Why, he wondered, did they need so many? Arriving just prior to the restaurant's opening, Kroc parked his car outside, and waited for customers to arrive. What he saw left him thunderstruck: it was like an assembly line for food that was affordable, good-tasting, and fast. The restaurant was also very clean, the service friendly. Kroc spent that evening with the owner-creators of restaurant, Mac and Dick McDonald, discussing the mechanics of their system. The following day, with a business plan in his mind, Kroc secured the exclusive right from the McDonald brothers to franchise their fast-food system in the U.S. Irrepressibly optimistic, Kroc was 52 and a veteran of several ventures in the food industry.

McDonald's was not the first fast-food restaurant chain: there was A&W Root Beer, Dairy Queen, and scores of others. Each depended on the use of the automobile, in which suburban families could travel to obtain a convenient and inexpensive meal in a clean setting. As part of the contract with the McDonald brothers, Kroc had agreed to follow the basic model of their original restaurant, though changes could be approved in writing. (That would prove an enormous problem later on.) Where Kroc differed from his competitors was in the franchise system that he created. His approach was long-term, based on what he judged to be equitable relationships with suppliers and the owner/operators of McDonald's franchises. Not seeking to make a quick profit, he charged relatively lower startup fees from carefully selected franchisees. Kroc's business model included:

1) A gradual, restaurant-by-restaurant expansion to maintain control over restaurant standards and design;
2) Owner/operators who were expected to act as local entrepreneurs and were directly involved in the management of the individual restaurant;
3) The development of supplier relationships based on trust and the promise of future growth together;
4) A relentless focus on experimentation to enhance operational efficiency;
5) Consistent training and monitoring of personnel to maintain the company's philosophy of QSC&V (quality, service, cleanliness, and value).

Profits of the McDonald's chain came as a direct percentage of its franchisees' gross sales. While certain aspects of the model were tweaked - from the early 1960s, corporate revenues came to be based largely on leasing fees from franchisees on McDonald's property - Kroc's basic structure and practices survived. As Kroc wrote: "My belief was that I had to help the individual operator succeed...His success would insure my success." The same logic applied to his suppliers.

For their part, McDonald's competitors tended to treat their franchisees like captive customers rather than trusted partners. For example, Dairy Queen and Tastee Freeze became suppliers to their franchisees, forcing them to buy equipment and other products at a profit for the corporate offices, in effect creating a structural conflict of interest. Not only did this divert the attention of the central headquarters from maintaining the quality and operational efficiency of their restaurants, but it frequently led to price gouging for less than optimal equipment, which undermined the loyalty of franchisees over the long term. Moreover, they sold "territorial franchises" for huge initial profits to local businessmen, relinquishing control over large geographical areas, which often led to the neglect of standards and brand consistency. Finally, their relations with outside suppliers tended to be short-term, based more on cost savings than on quality or innovation within the system.

Over time, the McDonald's chain grew up as a kind of ecosystem or coalition of partners, in which the interests of its members - the central headquarters, the owner/operators, and the suppliers - coincided over the long term. Suppliers were also encouraged to innovate: to perfect the pre-frozen french fry, for example, Fred Simplot invested over $3.5 million (!) of his own funds; as a reward (upon success), the Simplot Company grew into the world's largest supplier of potato products. In the same way, it was owner/operators who invented some of the most popular new menu items, including the Big Mac, the Filet-O-Fish sandwich, and the Egg McMuffin, which eventually were offered in all McDonald's restaurants.

Unfortunately, the book does not go much beyond this promising beginning. While this made for a cohesive system that was self-reinforcing and -improving, it also complicated the task of managing it from the national headquarters of the McDonald's Corporation. For any new policy, McDonald's execs have to convince franchisees and suppliers that it is in their interest to implement it. As the saying goes, "if it doesn't happen in the restaurants, it doesn't happen." For years, the company reacted to outside pressures, though this is now changing with new proactive policies.

Furthermore, as McDonald's grew into the world's largest restaurant chain and indeed into a cultural force, it became a lightening rod for criticism. The accusations of activists have taken a heavy toll on the McDonald's brand. For example, McDonald's had become a specific target of anti-globalist vandalism during the 1999 meeting of the World Trade Organization in Seattle. Other critics included Jose Bove, the organic farmer who achieved world renown for his role in the destruction of a McDonald's restaurant in the French countryside. Finally, for many the moniker "Mc" had become synonymous not only with low quality and cheapness, but also with the American form of capitalism. This represents a reversal of the wholesome, family-oriented image that the company had long nurtured.

The company is struggling to deal with these challenges to its brand at the moment. Even more important, the company's strategy for growth - just planting more and more restaurants - has ceased to function as well as it used to: there are too many McDo outlets so they compete with eachother in addition to other brands. Now, the company is attempting to attract new customers and get old ones to buy more at each visit. While this is working with menu changes for healthier fare (which mothers, many of whom did not like the old menu, feel good about buying when they come with their kids) these issues represent major challenge for the future, in particular the distrust of the brand that has become almost visceral.

Nonetheless, this book covers the basics, to about the mid 1980s, with genuine excellence. It is well written and does not pull too many punches though it was authorised by the company.

Recommended.

This book will tell you everything and any thing that you want to know about McDonalds. It starts at the very beginning, with the McDonald brothers in San Bernardino, CA and Ray Kroc, the shake machine salesman. Eventually Ray starts selling franchisees in the Chicago area and the rest is history. The book was compiled through countless interviews with people working within the McDonalds Corporation, so it's not an outsiders view.. but actual stories, quotes, and experiences of real employees. This is a great read of how a person with a dream and lots of determination can make it big. If you're interested in McDonalds, and how they got to be the largest restaurant chain in the world... then you'll like this book.

This is the absolute best business book I have ever read. It tracks no only McDonalds but other fast food companies as well. It gives a good sense of the history of the industry as well as possible future trends. You can see the development of McDonalds for what it is an compare it to others. This book also confirms much of Ray Kroc's account so if you are looking for just the McDonald's story that is an okay substitute. The depth and perspective of this book though cannot be beat. It is very well written and just an excellent source of information on the fast food industry.

A very interesting review of the history of the McDonalds and especially Ray Kroc. If you are in building stage of your business, this is a must read. You will find out that the problems you are experiencing daily are minimal to what Kroc went thru. He deserved a break today!

McDonald's is one of the great symbols of America, and most countries around the world absolutely love McDonald's. If you want to know the history of the mega-giant corporation, this is a good starting place. We are capitalists in America - we love making money, and that can only be considered a good thing. McDonald's embodies much of the American spirit and American dream. Sure, the food isn't healthy - as if that's a newflash for anyone these days. But eating it in moderation is not harmful in any way. Oh, and westcoaster (below) didn't actually read this book prior to reviewing it - that person just has a problem with successful business-people earning money. If you don't have that problem, read the book and marvel at the entrepreneurial spirit. And to Hades with the naysayers - come to think of it, I'm outta here - gotta grab a Quarter Pounder with cheese, baby!