If you are a small business owner and you want to learn about scaling, franchising and building a brand then the one business you look to as a reference, who has done this incredibly well, is McDonald's. They are a true American business icon and success story. In a new movie, "The Founder", the story of how McDonald's came to be is told and we learn the real story of Ray Kroc, the traveling salesman who is credited with making McDonald's what it is today, and it's original founders, Richard and Maurice McDonald.
During the first half of the movie, I was really excited. Ray Kroc was the poster child of entrepreneurship. He was a traveling salesman selling all sorts of different things door to door. The movie showed his rejection over and over and over again. But despite so much rejection - he persisted.
Then one day, the persistence paid off. He sold eight milkshake machines to the Dick and Mac McDonald, two brothers running a family friendly small walk-up restaurant with fast service and high-quality food in San Bernadino, California. Not one to miss a golden opportunity, Ray Kroc drove to San Bernadino to see exactly what was happening at this restaurant... and that's when everything changed.
The McDonald brothers were running a successful business, but Ray Kroc saw that the systems they created could be duplicated and allow them to expand. While the McDonald brothers were somewhat hesitant, they agreed to bring Kroc into the business to help them expand and grow. This is where things started to go bad. First, Kroc cheated on his loving and supportive wife. Then, due in part to his frustration at the brother's resistance to expand and grow at the rate he wanted, Kroc took advantage of his position with the brothers and nastily forced them to renegotiate (break) his contract with them. Finally, Kroc never paid the 1% share of McDonald's profits that he promised to the brothers after he forced them out of their own business.
So, while from a moral or ethical standpoint we may not approve or agree with what Ray Kroc did, we must admit that without his relentless hustle, vision, salesmanship and persistence there would be NO McDonald's. The McDonald's brothers simply did not have the drive and vision that Ray Kroc did.
7 Business Lessons for Entrepreneurs from Ray Kroc
Here are 7 Business Lessons every entrepreneur can learn from Ray Kroc and McDonald's.
- Ray Kroc never gave up. He kept selling, selling, selling until he found a yes. He never took NO for an answer.
- He constantly innovated. When he was told no one way, he thought of another way to ask the same or a different question. Ray was always looking for the edge.
- He liked to surround himself with the right people. There was a young man in one of Ray's first McDonald's that went from flipping burgers to a senior person in the corporation. Ray stopped going to fancy restaurants and instead when to VFW's and other locations to find the right people to run a McDonald's franchise.
- Ray needed encouragement. There was a very touching moment when his wife stood up for him. You can tell it gave him a boost in his "sails". She was a rock of support for him, many times.
- Ray was driven and had vision. He wanted to make a powdered milkshake to save money. He wanted to have Coca-Cola sponsor his signs to make money. The McDondald's brothers didn't see this vision. Ray did.
While those are positive attributes of Ray Kroc and his success, here are a few things I didn't like about Ray Kroc from his portrayal in the movie.
I'm a firm believer in WINNING and in the HUSTLE. However, I'm also a firm believer that we MUST treat others fairly and we MUST honor agreements and we MUST not do wrong to our friends and family.
- Never enter an agreement that leaves the other person feeling terrible. Relationships are so important. How he treated the McDonald's brothers, when he had the upper hand, was not cool. Does this mean that you can never amend an agreement, break an agreement due to a "just" reason? No. But there's a "right way" to do everything- even in business.
- Personal relationships are important. "All have sinned" - for sure. I have my shares of sins. However, how the movie portrayed Ray divorcing his wife, is epically "bad" in my book.
In Entrepreneurship, hard work and hustle are a MUST. But never want something so bad that you're willing to hurt others to get it.