Ray Kroc | |
|---|---|
 Kroc in 1976 | |
| Born | Raymond Albert Kroc (1902-10-05)October 5, 1902 Oak Park, Illinois, U.S. |
| Died | January 14, 1984(1984-01-14) (aged 81) San Diego, California, U.S. |
| Spouses | |
| Children | 1 |
| Notes | |
Raymond Albert Kroc (October 5, 1902 – January 14, 1984) was an Americanbusinessman, widely regarded as the "Founder ofMcDonald's" for his role in turning the singularhamburger stand into the most successful globalfast food corporation byrevenue. He purchased McDonald's from theMcDonald Brothers in 1961, after several years as theirfranchising agent, and served as itsCEO from 1967 to 1973.
Kroc was born inOak Park, Illinois, and worked a variety of jobs, including as apaper cup salesman and a musician, before eventually becoming amilkshake mixer salesman. In 1954, he visited a hamburger restaurant inSan Bernardino, California, owned by Richard and Maurice McDonald. Kroc was impressed with the efficiency and speed of the restaurant's operations, and he convinced the brothers to allow him to franchise the concept.
Under Kroc's leadership, McDonald's grew rapidly due to Kroc's focus on aggressive expansion, opening new restaurants across the United States and eventually internationally. Kroc became the owner of McDonald's Corporation in 1961 and was credited as its founder.[4] After retiring from McDonald's, he owned theMajor League Baseball teamSan Diego Padres from 1974 until his death in 1984.
Raymond Albert Kroc was born on October 5, 1902, inOak Park, Illinois, nearChicago, toCzech-American parents, Rose Mary [née Hrach] (1881–1959) and Alois "Louis" Kroc (1879–1937).[5][6] Alois was born in Horní Stupno, part ofBřasy nearRokycany.[7] Rose's father Vojtěch was fromŠevětín and her maternal grandfather Josef Kotilínek was fromBořice.[8][9] After emigrating to America, Alois made a fortune speculating on land during the 1920s, only to lose everything with thestock market crash in 1929.[10]
At the age of 15, Kroc made the decision to leave high school, contrary to his parents' wishes. Following the United States' entry intoWorld War I, he lied about his age in order to enlist with theAmerican Red Cross as anambulance driver. However, his service was short-lived, as the war concluded shortly after his enlistment.[11][12] During the 1920s and throughout theGreat Depression, Kroc worked a variety of jobs, including a paper-cup salesman, a Floridareal estate agent, and a pianist in multiplebands.[12][13]
After World War II, Kroc found employment as a milkshake mixer salesman for the foodservice equipment manufacturer Prince Castle.[14] When Prince Castle mixers sales plummeted because of competition from lower-pricedHamilton Beach products, Kroc was intrigued byRichard and Maurice McDonald, who had purchased eight of his mixers for their restaurant inSan Bernardino, California. Kroc visited the brothers in 1954 to see why they were making so many milkshakes.[15][16]
After finalizing a franchise agreement with the McDonald brothers, Kroc sent a letter toWalt Disney. They had met as ambulance attendant trainees inOld Greenwich, Connecticut, during World War I. Kroc wrote, "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 Disney Development." According to one account, Disney agreed but with a stipulation to increase the price of fries from ten cents to fifteen cents, allowing himself the profit. Kroc refused to gouge his loyal customers, leavingDisneyland to open without a McDonald's restaurant. WriterEric Schlosser, writing in his bookFast Food Nation, believes that this is a doctored retelling of the transaction by some McDonald's marketing executives. The proposal was likely returned without approval.[17]
Kroc has been credited with making a number of innovative changes in the food-service franchise model. Chief among them was the sale of only single-store franchises instead of selling larger, territorial franchises which was common in the industry at the time. Kroc recognized that the sale of exclusive licenses for large markets was the quickest way for a franchisor to make money, but he also saw in the practice a loss in the franchisor's ability to exert control over the course and direction of a chain's development. Above all else, and in keeping with contractual obligations with the McDonald brothers, Kroc wanted uniformity in service and quality among all of the McDonald's locations. Without the ability to influence franchisees, Kroc knew that it would be difficult to achieve that goal. By granting a franchisee the right to only one store location at a time, Kroc retained for the franchise some measure of control over the franchisee, or at least those desiring to someday own the rights to another store.[18]
Kroc became frustrated with the McDonald brothers' desire to maintain a small number of restaurants. The brothers also consistently told Kroc he could not make changes to things such as the original blueprint, but despite Kroc's pleas, the brothers never sent any formal letters that legally allowed the changes in the chain. In 1961, he bought the company for $2.7 million, the figure that the brothers gave him when pressed for an amount. Kroc went "ballistic" over hearing the amount and asked if he could pay it incrementally, but the brothers refused.[16] Obtaining the funds for the buyout was difficult due to existing debt from expansion. However,Harry Sonneborn, whom Kroc referred to as his "financial wizard", was able to raise the required funds.[19]
At the closing, Kroc became annoyed that the brothers would not transfer to him the real estate and rights to the original San Bernardino location. The brothers had told Kroc they were giving the operation, property and all, to the founding employees. In his anger, Kroc later opened a new McDonald's restaurant near the original McDonald's, which had been renamed the Big M because the brothers had neglected to retain rights to the name. Kroc felt that no one would want to eat at a restaurant called "Kroc's" and therefore was adamant about obtaining the rights to "McDonald's".[16]
After Kroc opened the nearby McDonald's, the Big M eventually closed.[20] It is alleged that as part of the buyout Kroc promised, based on a handshake agreement, to continue the annual 1% royalty of the original agreement, but there is no evidence of this beyond a claim by a nephew of the McDonald brothers. Neither of the brothers publicly expressed disappointment over the deal. Speaking to someone about the buyout, Richard McDonald reportedly said that he had no regrets.[21]
Kroc maintained theassembly line "Speedee Service System" for hamburger preparation that was introduced by the McDonald brothers in 1948. Hestandardized operations, ensuring every burger would taste the same in every restaurant. He set strict rules for franchisees on how the food was to be made, portion sizes, cooking methods and times, and packaging. Kroc also rejected cost-cutting measures like using soybean filler in the hamburger patties. These strict rules also were applied to customer service standards with such mandates that money be refunded to clients whose orders were not correct or to customers who had to wait more than five minutes for their food.
By the time of Kroc's death in 1984, McDonald's had 7,500 outlets in the United States and in 31 other countries and territories.[22] The total system-wide sales of its restaurants were more than $8 billion in 1983, and his personal fortune amounted to some $600 million.[23]
Kroc retired from running McDonald's in 1973. While he was looking for new challenges, he decided to return to baseball, which was his lifelong favorite sport. One day, while sitting in his yacht inFort Lauderdale, Florida, he read in the newspaper that theSan Diego Padres were for sale.[24] The team had been conditionally sold to Joseph Danzansky, aWashington, D.C. grocery-chain owner, who planned to move the Padres to Washington.[25] However, the sale was tied up in lawsuits when Kroc purchased the team for $12 million, keeping the team in San Diego.[26][27] In Kroc's first year of ownership in1974, the Padres lost 102 games yet drew over one million in attendance, the standard of box office success in the major leagues during that era.[28][29] Their previous highest attendance figure was 644,772 in1972.[26] TheSan Diego Union said Kroc was "above all, a fan of his team".[27]
On April 9, 1974, while the Padres were on the brink of losing a 9–5 decision to theHouston Astros in the season opener atSan Diego Stadium, Kroc took the public address microphone in front of 39,083 fans. "I've never seen such stupid ballplaying in my life," he said. The crowd cheered in approval.[27][30] In 1979, Kroc's public interest in futurefree agent playersGraig Nettles andJoe Morgan drew a $100,000 fine from CommissionerBowie Kuhn. Frustrated with the team, he handed over operations of the team to his stepson-in-law,Ballard Smith.[31][32] "There's more future in hamburgers than baseball," Kroc said.[32]
After his death, the Padres in 1984 wore a special patch with Kroc's initials: RAK.[33] They won the NL pennant that year against his hometown teamChicago Cubs and played in the1984 World Series, which they lost to theDetroit Tigers. Kroc was inducted posthumously as part of the inaugural class of theSan Diego Padres Hall of Fame in 1999.[34]
The Kroc Foundation supported research, treatment and education about various medical conditions, such asalcoholism,diabetes,arthritis andmultiple sclerosis. It is best known for establishing theRonald McDonald House, anonprofit organization that provides free housing for parents close to medical facilities where their children are receiving treatment.[23][35]
In 1973, Kroc received the Golden Plate Award of theAmerican Academy of Achievement.[36]
A lifelongRepublican, Kroc believed firmly in self-reliance and staunchly opposed government welfare and theNew Deal. Kroc donated $255,000 toRichard Nixon's reelection campaign in 1972, and he was controversially accused by some, notably SenatorHarrison Williams, of making the donation to influence Nixon to veto aminimum wage bill making its way through Congress.[37]
Kroc's first two marriages to Ethel Fleming (1922–1961) and Jane Dobbins Green (1963–1968) ended in divorce.[35] Kroc and Fleming met in 1919, married in 1922, and then moved toChicago, Illinois. Their daughter Marilyn was born in 1924.[38] He married his third wife,Joan Smith (née Mansfield) in 1969. Joan Kroc was aphilanthropist who significantly increased her charitable contributions after Ray Kroc's death. She donated to a variety of causes that interested her, such as the promotion of peace and preventingnuclear proliferation.[35] Upon her death in 2003, her remaining $2.7billion estate was distributed among a number of nonprofit organizations, including $1.5 billion donation toThe Salvation Army to build 26Kroc Centers, along with a $200 million donation toNational Public Radio as she believed deeply in the power of public radio.[2][39] In addition to that, she also donated to community centers serving socially deprived neighborhoods throughout the country.[40]
In 1980, following astroke, Kroc entered an alcohol rehabilitation facility.[41] He died four years later ofheart failure at a hospital in San Diego on January 14, 1984, at the age of 81.[23] He was buried at theEl Camino Memorial Park inSorrento Valley, San Diego.[10]
Kroc's acquisition of the McDonald's franchise as well as his "Kroc-style" business tactics are the subject ofMark Knopfler's 2004 song "Boom, Like That".[42][43]
Kroc co-authored the bookGrinding It Out, first published in 1977 and reissued in 2016; it served as the basis for a biographical movie about Kroc.[44]
Michael Keaton portrayed Kroc in the 2016John Lee Hancock filmThe Founder. The film's depiction of Kroc's franchise development, nationwide expansion, and ultimate acquisition of McDonald's, offered a critical view of his treatment of the founding McDonald brothers.[45]
Kroc is featured in the documentary seriesThe Food That Built America on theHistory channel.[46]
Kroc is featured inTim Harford'sBBC World Service radio show50 Things That Made the Modern Economy in the episode, "Fast food franchise", which depicts the boom that his franchisee model provided for the fast food industry.[47]
Kroc was critical of workerssitting or leaning while at work. In the 1960s, Kroc used the catchphrase "If you’ve got time to lean, you’ve got time to clean."[48] According toJacobin writer Alex N. Press, the catchphrase has become popular with managers.[49]
Media related toRay Kroc at Wikimedia Commons
Quotations related toRay Kroc at Wikiquote| Business positions | ||
|---|---|---|
| Preceded by | CEO ofMcDonald's 1967–1973 | Succeeded by |
