Podcast
Questions and Answers
True or false:The McDonald's brothers initially found success with carhop services.
False
True or false: Ray Kroc convinced the brothers to franchise their business and took control of opening new locations.
True
True or false: The brothers received a piece of the profits from the franchise rights they sold to Kroc.
False
True or false: Kroc faced no challenges in the design and approval process for new locations.
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True or false: Kroc realized the business was more in the real estate than food industry and started a new company to buy and sublease land and buildings to franchises.
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True or false: The McDonald's brothers sold their business to Kroc for $2.7 million and kept their original location.
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True or false: Kroc grew McDonald's into a worldwide success after buying out the brothers.
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True or false: Ray Kroc wanted to buy the brothers' business but they only agreed to a franchise deal.
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True or false: The brothers received half a percent royalty on all future McDonald's proceeds.
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True or false: The royalties that the brothers could have received would have been worth over $100 million per year today.
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Study Notes
- McDonald's was invented by two brothers who replaced carhop services with take-out windows.
- They struggled at first, but eventually found success with their hamburgers, fries, and milkshakes.
- A salesman named Ray Kroc convinced them to franchise and took charge of opening new locations.
- Kroc was given rights to open franchises in the US and receive 1.9% of gross sales.
- The brothers sold the franchise rights but did not receive a piece of the profits.
- Kroc faced challenges with the design and approval process for new locations.
- He realized the business was more in the real estate than food industry and started a new company to buy and sublease land and buildings to franchises.
- The business significantly increased its revenue and signed up more franchises.
- Kroc wanted to buy out the brothers but they asked for $2.7 million and insisted on keeping their original location.
- Kroc eventually bought out the brothers and grew McDonald's into a worldwide success.
- The McDonald's brothers had a successful restaurant making $100,000 annually.
- Ray Kroc wanted to buy their business but they only agreed to a franchise deal.
- Ray opened a McDonald's across the street and ran the brothers out of business.
- The brothers asked for half a percent royalty on all future McDonald's proceeds.
- Ray agreed but convinced them to keep it out of the contract.
- The brothers never received any royalties.
- The royalties would have been worth over $100 million per year today.
- The McDonald's restaurant invented the fast food business.
- Ray Kroc's memoir mentions that the brothers could have been wealthy if they had played their cards right.
- The article asks readers to share which part of the story they found inspiring.
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