“If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean with them.”
—Ray Kroc (the man behind McDonald's)
I bet you will learn at least 1 new information in this post - if you didn't either you are a mind genius reading my mind or you are busy/didn't care/want to read today(do come back later!)!
(Please write in comment if you did learn something new or didn't!)
Let's start with the story of McDonalds - Let's say you are in Austin,USA and you go to Toronto,Canada and then you to go Chennai ,India.
What will you eat?
A survey by Sponsorship Research International found that 88 percent could identify the arches (the symbol for McDonald's) and only 54 percent could name the Christian cross, according to Fast Food Nation.
Read more:at here
Pizza is Italian. Sandwiches are European. Hamburgers and Hotdogs are american. Falafels are greek, Idli is South Indian,Noodles is - let's assume Chinese.
Notice Marco Polo the Italian traveled from Venice,Italy to China and got noodles. Made it 'Italianized' and they named it Sphagettigi.
What has this got to do with McDonald's? Keep reading...
Italians and Food
When we visited Naples Italy we were explained the story of pizza.
When Italy was unified (no scholars can agree on a time but a timeframe which started in 1815 and end date is 1871 or 1918 depending on the literature or Wikipedia site you visit ) the Queen visited Naples.
Naples had fought war with Spain and the peasants have been eating this stuff for along time. Poor man's food is Pizza! Raffaele Esposito was a chef who was tasked with created Pizza for the Queen Margharita who visited this part of Italy after the unification in 1889. The pizza had the 3 colors Red -Tomato, White - Cheese and Green - Basil and this was henceforth called Pizza Margarita. When we traveled North to South of Italy for 14 days I ate only this for 25 meals out of 28 meals (lunch or dinner). Only on 3 occasions I ordered and ate Pasta. I am authorized to say this stuff saved my life!
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What has this got to do with McDonald's and KFC? - Keep reading.
1857 India's first war of Independence and food
Gelatin - the food that is most feared by all Hindus,Vegetarians and Muslims. Gelatin has bones from Pig and cow . Pig is considered a low level animal not be consumed by Muslims and Cows are considered too holy to be eaten by Hindus(Holy Cow!).
What happens when Indians are informed that they have to bit,chew and discard something made up of Gelatin? What happens if they also happen to be employed by British to fight in British Indian Army? They revolt!
Thus was born in 1857 Under Mangal Pandey's leadership Sipoy Mutiny which included both Hindus and Muslims fighting side by side as the cartridge they had to bite and discard had Gelatin(This information about Gelatin was provided to Mangal Pandey by a friendly British officer!)
Indians started their first war of independence over food!
McDonald's was serving french fries with Beef extracts ! A lawsuit by vegetarians settled the matter and all of us who have eaten this beef fried fries never got any funds except .In 2002 McDonald's paid $10million to the lawyer and efforts to promote vegetarian movement in US.. Link here
Connect all dots
Steve Jobs said in his Stanford graduation speech it is easy to connect the dots once things happen. (Don't forget to watch his speech - Stay Foolish Stay hungry! Link here)
Hindsight is always 20-20.
It is said that there were many people who started a burger chain selling hamburgers in orange county California. Ray Croc was a milkshake sales man. He was intrigued by the fact that McDonalds a small mom and pop drive through and drive in restaurant in Orange County California was buying 2 milkshake machines as opposed to one which most stores were buying.
He joined the McDonald's - Richard and Maurice McDonald; brothers and convinced the McDonald's brothers to franchise. Like all stories he fired them/let them go by offering $2.7 million in 1961. It is funny to know that Richard McDonald was served the 50billionth burger in Hyatt in a ceremonial way but don't forget they never become as rich as Ray Croc .When he died in 1981 he was worth 500 million$.
“Dear Walt, I feel somewhat presumptuous addressing you in this way yet I feel sure you would not want me to address you any other way. My name is Ray A. Kroc….I look over the Company A picture we had taken at Sound Beach, Conn., many times and recall a lot of pleasant memories…I have very recently taken over the national franchise of the McDonald’s system. I would like to inquire if there may be an opportunity for a McDonald’s in your Disneyland Development.”
He wrote the above letter to Walt Dinsey and never got a reply back - according to some other sources he got a simple no.
In any case they both had something in common - can you guess?
1,2,3... ok. Here is the answer - Children.
Walt Disney's mouse could make the grandparents,parents and kids spin! McDonald's burgers can do the same!
At one point Ray Croc though about building an amusement park and eventually decided on Play Areas in every McDonalds.
Every child will bring 2 customers to the store was what he always used to say ( I didn't listen to him say that - I read about it!)
McDonald used to own Donatos Pizza, Boston Market and Chipotle Mexican Grill. They sold off Chipotle and is now an independent chain again.
Who can make better burger than McDonald's has been asked several times and the answer had been many many millions of people. In reality no one can scale like them! We can make 100 great burgers but McDonald's sells millions of average burgers!
They own and operate a big university called Hamburger university to train their employees they own multi million dollar research facility to come up with new food items and cooking methods.Remember McDonald's menu like any other fast food changes from time to time except their core products like Big Mac!
McDonald's also works with lots of chemicals to add artificial and natural flavors to your food. While we may never know the difference between what is considered natural and what is artificial do recall since white coat lab scientist make this food they can make any test tube smell like fries and that is how the stuff that you eat smells like when you eat - while the frozen fried potato has no flavor the chemical does.
Real estate - Ray Croc had asked in either Standford or Harvard what business is McDonald's in? The answer is real estate.
When Ray Croc was struggling to grow his business which the McDonald's brothers were not part of anymore he hired Sonneborn. Sonneborn came up with the idea of Franchise Realty Corporation, which is McDonald's Real Estate subsidiary . The real money making machine for McDonald's corporation.Ray Croc fired Sonneborn too! Don't forget Ray Croc benefited not the people who built it.
McDonald's franchises flip burgers but McDonald's corporation flips real estate
Let me site 2 different examples - Ikea which used to be a furniture store figured that everytime they enter a new market the real estate value started going up. So they decided like McDonald's to enter this market and own realestate adjacent to where they will develop a new store and then sell/lease it.
Look at their graph above from and you will get the idea.
Kmart which also used to be identified as a store that was making a loss in US was actually in real estate business and when they restructured they sold a part of their real estate holding and bought Sears!
Real estate is where the money is!
Next time when you see a McDonald's don't forget the own the real estate and not burgers(the Franchises do this job!)!
War
Even though the following 2 statements looks good -
'No two countries that have a McDonalds have ever gone to war',
'The US has never gone to war against a country with a McDonalds'
It is not true!
Keep eating
Sivakumar Manikanteswaran
