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Business Lessons From Ray Kroc "The Founder" -- McDonald's Story

This article is more than 7 years old.

“The Founder” tells the story of Ray Kroc, played admirably by Michael Keaton. A marginally successful traveling salesman for years, we meet Kroc in 1954 on the road trying to sell multi-spindle milkshake machines to the owners of drive-in restaurants. Despite the myriad such restaurants which have sprouted up over the prior decade, no restaurateur wants to multiply throughput.

When Kroc hears that a drive-in wants to buy six, no make that eight machines, he takes Route 66 to San Bernadino to see what the McDonald brothers are doing that would require such massive throughput.

The film tells the origin story of the golden arches, one of the most recognizable trademarks in the world. Keaton is stellar in the role. His firm belief that he has seen the future of fast food (without that genre ever being named) is met with the usual resistance. He nonetheless mortgages his house and strikes a deal to franchise what the brothers have created.

Sitting in one of an endless number of motel rooms, Kroc pulls out an LP of a business coach and plays it on the portable record player he packs on every trip. It is undoubtedly a record he has heard often, but the message of perseverance echoes throughout the film.

The franchising business begin to get traction and Kroc believes he is on his way to success. But after cajoling a few country club members into buying franchises, he realizes that consistency across restaurants is a challenge. One unit is selling corn on the cob and fried chicken, another is a trashy mess.

To his credit, Kroc keeps looking for ways to improve what the McDonald brothers started. They, in turn, are loath to make any changes to what they understandably see as a winning formula. A cash infusion for signage paid by Coca-Cola is rejected by the brothers. An alternative to the expense of storing ice cream by way of an instant mix is likewise rejected. When Kroc forges ahead nonetheless, the stage is set for a showdown. No spoiler here, Kroc eventually rejected the dry mix milkshake.

Despite a handful of successful franchises up and running, Kroc is nearly out of cash. His slice of the business is tiny, and the bank is threatening to foreclose on his house mortgage.

A fortuitous intervention by Harry Sonneborn, another fast food executive, steers Kroc in the more lucrative direction. “You’re not in the hamburger business, you’re in the real estate business,” Kroc is told. Keaton’s monumentally expressive face registers the logic, and he pivots into buying up the real estate which he leases back to the franchise.

Soon he is nationwide, and the McDonald brothers in San Bernadino don’t know how to handle the tornado that has swept through their business life.

For the sake of suspense, I will forego the nuances of the McDonald brothers’ fate. Suffice to say, Kroc steamrolled across the country with his strategy. His superior financial position afforded him the position to outspend the brothers in litigation.

An intriguing subplot involves how Kroc’s first wife (well-played by Laura Dern) stood by his myriad dreams and schemes, even when the franchise business was faltering. Cleverly left untold is how he came to make the wife of a franchise his second wife. But the end credits bring the viewer up to speed, pointing out that widow Joan Kroc left the bulk of her $1.5 billion estate to charities like Salvation Army and National Public Radio. The fate of the other main players is also revealed, and one is left with a rather sour taste when contemplating the origins of this massive American business (which daily feeds about 1% of the world’s population).

The production of “The Founder” (judge for yourself the irony of the title) superbly captures the look and feel of America in the middle of the 1950s. Some of the continuity is a bit disconcerting (several scenes go from sunny to overcast depending on the camera angle), but that is a minor quibble.

Nick Offerman and John Carroll Lynch co-star as McDonald's founders Richard and Maurice McDonald. Both are excellent.

McDonald’s has taken its lumps over the years, especially after the “Super Size Me” documentary in 2004. Menus subsequently have tried to reflect an interest in healthier fare, to varying success.

But it should be noted that McDonald’s is often a safe haven and respite for less fortunate people. Recent news reports describe the restaurant as a venue and meeting place for folks with few options on where to spend their time.

“The Founder” stands successfully as quality entertainment, but it also shines a light on a story that has some uncomfortable parts to its foundation.

Kudos to the producers for crafting this sharp biopic.

Opens nationwide January 20, 2016.