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Did the McDonald brothers (original McD's) get royally screwed, or were they just stupid?
Posted on 7/16/19 at 4:00 pm
Posted on 7/16/19 at 4:00 pm
The other night I was watching The Founder, which is a biographical drama about Ray Kroc who founded McDonald's Corporation.
Kroc started his venture by persuading Maurice and Dick McDonald, who started the very first McDonald's in San Bernardino, to let him franchise the operation because it was the most efficient food service operation he'd ever seen. As the business model grew, Kroc saw ways to cut costs and increase profits, but couldn't execute due to his contract with the McD brothers and their disagreements with the ideas. The brothers were too focused on their local operation while Kroc wanted to expand as fast as possible.
Long story short, Kroc ended up buying out the McD brothers' trademark for a mere 2.7 mil. The brothers came to a "handshake agreement" with Kroc for 1% of all of the company's royalties, which ultimately amounted to over $100 mil/year, but never received them. The brothers then had to rebrand their restaurant and ultimately went out of business 6 years later, while Kroc's McDonald's Corporation grew to what it is today.
In your opinion, did they get screwed by Kroc, or were they stupid and deserving of their fate?
Yes I know McD's is trashy.
Kroc started his venture by persuading Maurice and Dick McDonald, who started the very first McDonald's in San Bernardino, to let him franchise the operation because it was the most efficient food service operation he'd ever seen. As the business model grew, Kroc saw ways to cut costs and increase profits, but couldn't execute due to his contract with the McD brothers and their disagreements with the ideas. The brothers were too focused on their local operation while Kroc wanted to expand as fast as possible.
Long story short, Kroc ended up buying out the McD brothers' trademark for a mere 2.7 mil. The brothers came to a "handshake agreement" with Kroc for 1% of all of the company's royalties, which ultimately amounted to over $100 mil/year, but never received them. The brothers then had to rebrand their restaurant and ultimately went out of business 6 years later, while Kroc's McDonald's Corporation grew to what it is today.
In your opinion, did they get screwed by Kroc, or were they stupid and deserving of their fate?
Yes I know McD's is trashy.
38
Posted on 7/16/19 at 4:01 pm to VolsOut4Harambe
TL;DR
MacDonnols is for poors
MacDonnols is for poors
Posted on 7/16/19 at 4:01 pm to VolsOut4Harambe
Both
Posted on 7/16/19 at 4:01 pm to VolsOut4Harambe
The movie portrayed them as simpletons and Kroc as a used car salesman predator
Posted on 7/16/19 at 4:02 pm to VolsOut4Harambe
Both.
Without a doubt, both.
Without a doubt, both.
Posted on 7/16/19 at 4:02 pm to VolsOut4Harambe
I bet the ice cream machine worked under the brothers
Posted on 7/16/19 at 4:02 pm to VolsOut4Harambe
quote:
In your opinion, did they get screwed by Kroc, or were they stupid and deserving of their fate?
Both.
Posted on 7/16/19 at 4:02 pm to VolsOut4Harambe
quote:
In your opinion, did they get screwed by Kroc, or were they stupid and deserving of their fate?
Probably both. Kroc was probably a scumbag, but any idiot that makes "handshake deals" deserves to get screwed for being a retard.
Posted on 7/16/19 at 4:02 pm to VolsOut4Harambe
their french fries are tGoat. that's all I have to add.
Posted on 7/16/19 at 4:03 pm to VolsOut4Harambe
When they agreed to a handshake agreement they deserved what they got
Posted on 7/16/19 at 4:03 pm to VolsOut4Harambe
Both. But his real genius was buying up the real estate under the leases. He gave a speech at Harvard one day and asked everyone if they knew what business he was in. All said well obviously the hamburger business!! And he said, "Wrong! I'm in the real estate business"
Posted on 7/16/19 at 4:04 pm to VolsOut4Harambe
I'd need more information on this "handshake" royalties deal to reach a conclusion.
I'd say, however, 2.7 million for a freaking hamburger stand in the 1950s was a hell of a lot of money.
I'd say, however, 2.7 million for a freaking hamburger stand in the 1950s was a hell of a lot of money.
Posted on 7/16/19 at 4:04 pm to VolsOut4Harambe
they got screwed by someone who outsmarted them
Posted on 7/16/19 at 4:04 pm to Mingo Was His NameO
That was my final impression as well.
Posted on 7/16/19 at 4:06 pm to VolsOut4Harambe
$2.7 million in 1961 (when Kroc bought the brothers out) would be equivalent to almost $23 million today. The brothers did okay, imo.
Posted on 7/16/19 at 4:06 pm to VolsOut4Harambe
The movie spelled it out pretty well, with some embellishing.
The McD's should've had better representation. Even so, they would've never turned it into the empire Kroc did. Kroc had the vision and wasn't risk averse.
The McD's should've had better representation. Even so, they would've never turned it into the empire Kroc did. Kroc had the vision and wasn't risk averse.
This post was edited on 7/16/19 at 4:08 pm
Posted on 7/16/19 at 4:07 pm to VolsOut4Harambe
The brothers lacked vision. I don’t really blame Kroc in the grand scheme of things. He could have made ALL of them wealthy if they had just cooperated.
They didn’t. So he did what he had to.
They didn’t. So he did what he had to.
Posted on 7/16/19 at 4:09 pm to Decisions
quote:
He could have made ALL of them wealthy if they had just cooperated.
Those damn powdered milkshakes (gross).
Posted on 7/16/19 at 4:10 pm to VolsOut4Harambe
Both, but mostly they were just stupid
This post was edited on 7/16/19 at 4:11 pm
Posted on 7/16/19 at 4:11 pm to VolsOut4Harambe
If the movie is accurate, they didn't want to expand so the 2.7 million is probably more than they would have made with a couple of cheap burger stores.
Kroc definitely exploited their concept and he cheated them out of the royalties but they were not good businessmen relying on a handshake. Kroc was able to see a great idea and he accepted the right advice. McDonald's would never have become the behemoth it became without Kroc's ambition.
They were naive / dumb and they lacked the drive to create a massive national chain. So he screwed them and they were dumb.
Kroc definitely exploited their concept and he cheated them out of the royalties but they were not good businessmen relying on a handshake. Kroc was able to see a great idea and he accepted the right advice. McDonald's would never have become the behemoth it became without Kroc's ambition.
They were naive / dumb and they lacked the drive to create a massive national chain. So he screwed them and they were dumb.
This post was edited on 7/16/19 at 4:13 pm
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