by Ray Kroc
Others were less kind.
Ethel was incensed by the whole thing. We had no obligations that would be jeopardized by it; our daughter, Marilyn, was married and no longer dependent on us. But that didn’t matter to Ethel; she just didn’t want to hear about the McDonalds or my plans. I had done it again, and once too often as far as she was concerned. The quarrels we’d had when I took over Prince Castle and then when I’d extended the mortgage on our house to buy out John Clark were mere preludes to this one. This was a veritable Wagnerian opera of strife. It closed the door between us. She dutifully attended McDonald’s gatherings in later years, and she was liked by operators’ wives and by women on the staff, but there was nothing more between us. Our thirty-five years of holy matrimony endured another five in unholy acrimony.
I had no time to bother with emotional stress, though. I had to find a site for my first McDonald’s store and start building. I needed to get a location that I could establish as a model for others to follow. My plan was to oversee it in my spare time from the Prince Castle business. That meant it would have to be situated near my home or near my office, and downtown Chicago was impossible for a number of reasons. Finally, with the help of a friend named Art Jacobs, who went in fifty-fifty with me on it, I found a lot that seemed just right. It was in Des Plaines, a seven-minute drive from my home and a short walk from the Northwestern Railroad Station, from where I could commute to the city.
My troubles started the minute I got together with my contractor and went over with him the plans furnished by the McDonald’s architect. That structure was designed for a semidesert location. It was on a slab, no basement, and it had a swamp cooler on the roof.
“Where am I going to put the furnace, Mr. Kroc?” he asked.
“Damned if I know. What do you suggest?”
He suggested a basement, pointing out that other arrangements would be far less efficient and that I would need a basement for storage anyhow. I couldn’t just leave my potatoes outdoors as the McDonalds did, for example, and there was no room for a back building on this lot, even if I’d wanted one, which I didn’t.
So I called the McDonald boys and told them about my problem.
“Well, sure you need a basement,” they said. “So build one.”
I reminded them that I had to have it documented by a registered letter. They pooh-pooed it; said it was all right to go ahead, they weren’t much good at writing letters and they couldn’t afford to hire a secretary. Actually they probably could have hired the entire typing pool at IBM if they’d had a mind to. I hung up hoping that they would have second thoughts and send me written confirmation, but they never did.
It was a messy way to start, being in default on the first unit, but there was no choice. I went ahead with the building, telling myself that when I got breathing space I would fly out to see the McDonalds and get all the contractual wrinkles ironed out at once. That would have worked, had the McDonalds been reasonable men. Instead, they were obtuse, they were utterly indifferent to the fact that I was putting every cent I had and all I could borrow into this project. When we sat down with our lawyers in attendance, the brothers acknowledged the problems but refused to write a single letter that would permit me to make changes.
“We have told you by telephone that you may go ahead and alter the plans as we discussed,” said their attorney, Frank Cotter.
“But the contract calls for a registered letter. If Mr. Kroc does not have that, he is put in jeopardy,” said my counsel.
“That’s your problem.”
It was almost as though they were hoping I would fail. This was a peculiar attitude for them to take because the more successful the franchising, the more money they would make. My attorney gave up on the situation. I hired another and he quit, too, saying I was plain crazy to continue under such conditions. He could not protect me if the McDonalds should close in on me. So I said, “Let ’em try,” and I plunged ahead.
My home in Arlington Heights was right next to Rolling Green Country Club where I belonged and where I had a lot of business friends and golfing companions. Most of these locker-room acquaintances shared the general opinion that I had taken leave of my senses in getting into this fifteen-cent hamburger business. But I had one close friend who was quite interested in the venture. He had a son-in-law named Ed MacLuckie who was looking for a job and who had expressed a liking for the food service business. Ed was working a wholesale hardware territory over in Michigan at the time and it was not going well. So I talked to him. He was one of these whip-lean, nervous types who are often very fussy and fastidious and have great endurance. Just the kind of qualifications I was looking for, so I hired him as a manager of my first store. Art Bender, the McDonald brothers’ manager, came to Des Plaines and helped Ed and me open that store on April 15, 1955. It was a hell of an ordeal, but the experience was to prove invaluable in opening other stores. Incidentally, Art Bender is still with us. He’s a highly successful operator in California. So is Ed, who has stores in Michigan and Florida.
My notion about using that first unit as an experimental model was a good one. It took nearly a year to shake it down into a smooth-running operation although it made money from the start. I probably wouldn’t have been able to get the thing started if it hadn’t been for Jim Schindler of Leitner Equipment Company. He went out to San Bernardino and studied the layout of the griddles, fry vats, and so forth in the McDonald brothers’ store. Then he adapted them to my plans in Des Plaines. One of the things I did differently was to make my milkshakes with a soft product drawn from a tank, instead of hand-dipping ice cream. This changed the layout and gave us more space. One major problem in adapting the California-style building to the Midwestern climate was ventilation. I brought in architectual consultants one after the other in an attempt to solve the problem of exhausting the stale air and replacing it with fresh cool or heated air. These guys could design a cathedral, but they didn’t seem to be able to deal with my little hamburger store. It gets pretty cold in April in the Chicago area, so our furnace was put into action right away. The problem was that the fans for the griddle and fry vats would exhaust all the heat the furnace was putting out and continually blow out the pilot light. This could have allowed gas to accumulate dangerously. The temperature inside the store would hover around forty degrees. As the weather warmed up, the reverse happened, cool air was exhausted, allowing the inside temperature to climb up to around a hundred degrees.
A subject of much greater concern to me, however, was the great french-fry flop. I had explained to Ed MacLuckie with great pride the McDonald’s secret for making french fries. I showed him how to peel the potatoes, leaving just a bit of the skin to add flavor. Then I cut them into shoestring strips and dumped them into a sink of cold water. The ritual captivated me. I rolled my sleeves to the elbows and, after scrubbing down in proper hospital fashion, I immersed my arms and gently stirred the potatoes until the water went white with starch. Then I rinsed them thoroughly and put them into a basket for deep frying in fresh oil. The result was a perfectly fine looking, golden brown potato that snuggled up against the palate with a taste like … well, like mush. I was aghast. What the hell could I have done wrong? I went back over the steps in my mind, trying to determine whether I had left something out. I hadn’t. I had memorized the procedure when I watched the McDonald’s operation in San Bernardino, and I had done it exactly the same way. I went through the whole thing once more. The result was the same—bland, mushy french fries. They were as good, actually, as the french fries you could buy at other places. But that was not what I wanted. They were not the wonderful french fries I had discovered in California. I got on the telephone and talked it over with the McDonald brothers. They couldn’t figure it out either.
This was a tremendously frustrating situation. My whole idea depended on carrying out the McDonald’s standard of taste and quality in hundreds of stores, and here I couldn’t even do it in the first one!
I contacted the experts at the
Potato & Onion Association and explained my problem to them. They were baffled too, at first, but then one of their laboratory men asked me to describe the McDonald’s San Bernardino procedure step-by-step from the time they bought the potatoes from the grower up in Idaho. I detailed it all, and when I got to the point where they stored them in the shaded chicken-wire bins, he said, “That’s it!” He went on to explain that when potatoes are dug, they are mostly water. They improve in taste as they dry out and the sugars change to starch. The McDonald brothers had, without knowing it, a natural curing process in their open bins, which allowed the desert breeze to blow over the potatoes.
With the help of the potato people, I devised a curing system of my own. I had the potatoes stored in the basement so the older ones would always be next in line for the kitchen. I also put a big electric fan down there and gave the spuds a continuous blast of air, which greatly amused Ed MacLuckie.
“We have the world’s most pampered potatoes,” he said. “I almost feel guilty about cooking them.”
“That’s all right, Ed. we’re gonna treat ’em even better. We’re gonna fry ’em twice,” I told him. I explained the blanching process the potato people had recommended we try. We gave each basket of fries a preliminary dip in the hot oil and let them drip dry and cool off before cooking them all the way through. Finally, about three months after we’d opened the store, we had potatoes that measured up to my expectations. They were, if anything, a little better than those tasty morsels I’d discovered in San Bernardino. We worked it out so the blanching was done on a regular production-line basis. We’d take two baskets at a time and blanch them for three minutes. They would be a rather unappealing gray color when they came out at that point, but the cooling and draining would allow some oil to penetrate into the body of the potato. The chemistry of this tinge of oil in the starch of the morsel when it was dumped back to fry for another full minute created a marvelous taste. They’d emerge for the second time golden, glowing, and appealing. We would dump them into a stainless steel drain pan under a few heat lamps and let the grease drain off. Then they would be placed, with sugar tongs, two or three strips at a time, into the serving bag. That process wouldn’t work today. It would be far too costly in labor. Even then a lot of people marveled that we could sell those potatoes for a dime.
One of my suppliers told me, “Ray, you know you aren’t in the hamburger business at all. You’re in the french-fry business. I don’t know how the livin’ hell you do it, but you’ve got the best french fries in town, and that’s what’s selling folks on your place.”
“You know, I think you’re right,” I replied. “But, you son of a bitch, don’t you dare tell anyone about it!”
I was elated when I finally got that store open and it began to show a profit. I recognized that it was not in the best of all possible locations; at most it was a mediocre site for a place that had no prior public exposure. Yet it was doing well, and I was able to move ahead and start lining up my franchisees for other locations. The first place I looked for them was the locker room at Rolling Green, and many of my golfing friends became very successful McDonald’s operators.
Then the whole deal ground to a halt on another piece of dramatic deviousness or dumbness, I don’t really know which, on the part of the McDonald brothers.
I had been made aware of the ten other sites in California and Arizona that the brothers had lent their names to, and we’d agreed that was fine. I was to have all the rest of the United States. But there was one other agreement they hadn’t told me about, and that was for Cook County, Illinois, where I had my home, my office, and my first model store. The brothers had sold Cook County to the Frejlack Ice Cream Company interest for $5,000!
It cost me $25,000 to buy that area from the Frejlacks, and it was blood money. I could not afford it. I was already in debt for all I was worth.
I couldn’t blame the Frejlacks, of course, they were completely aboveboard and fair. But I could never forgive the McDonalds. Unwittingly or not, they had made an ass of me—in the Biblical sense. I’d been blindfolded by their assurances and led to grind like blind Samson in the prison house.
My only salvation was the goodwill I’d built up over the years in Prince Castle Sales. The income from Multimixer paid the rent and all salaries while I was slaving away to get McDonald’s started. I would drive down to Des Plaines each morning and help get the place ready to open. The janitor would arrive at the same time I did, and if there was nothing else to be done, I’d help him. I’ve never been too proud to grab a mop and clean up the restrooms, even if I happened to be wearing a good suit. But usually there were a lot of details to be taken care of in terms of ordering supplies and keeping the food operation going, so I would write out detailed instructions for Ed MacLuckie concerning them. Ed came in about 10 o’clock in the morning to open the store at 11 o’clock. I would leave my car at the store and walk the three or four blocks to the Northwestern station, where I’d catch the 7:57 express to Chicago and be in my Prince Castle office before 9 o’clock.
June Martino was usually there ahead of me and had the day’s business started with our East Coast reps. I had manufacturers’ representatives all over the country to handle Multimixer sales. For a time I kept some of the big customers, such as Howard Johnson’s, Dairy Queen, and Tastee Freeze, as my personal accounts. I relinquished these gradually as McDonald’s business demanded more and more of my attention. In the evenings, I would commute back to Des Plaines and walk over to the store. I was always eager to see it come into view, my McDonald’s! But sometimes the sight pleased me a lot less than other times. Sometimes Ed MacLuckie would have forgotten to turn the sign on when dusk began to fall, and that made me furious. Or maybe the lot would have some litter on it that Ed said he hadn’t had time to pick up. Those little things didn’t seem to bother some people, but they were gross affronts to me. I’d get screaming mad and really let Ed have it. He took it in good part. I know he was as concerned about these details as I was, because he proved it in his own stores in later years. But perfection is very difficult to achieve, and perfection was what I wanted in McDonald’s. Everything else was secondary for me.
7
Harry Sonneborn.
That name on my appointment calendar in late May of 1955 was familiar yet strange. I remembered having talked to him on the telephone a few times about Multimixer sales when he was vice-president of Tastee-Freeze. Now he’d called to tell me he had resigned from Tastee-Freeze, sold all his stock, and he wanted to come to work for me.
“I heard about your operation in Des Plaines, so I went out to look it over,” he said. “I can tell just by watching it from across the street that you’ve got a winner there, Mr. Kroc, and I’d like to be part of your organization.”
“Call me Ray,” I told him. “I’d be interested in chatting with you, but I must tell you that I’m not in a position to hire anyone.”
“I’d like to try and change your mind about that, Ray,” he said. So we arranged a time to meet in my office.
Truthfully, I knew I needed help. But I also knew that I couldn’t afford it. Prince Castle Sales was funding my entire operation, paying my salary and that of June Martino in addition to most of the costs involved in setting up my new franchise system. Then I had the added burden of buying out the Frejlack interest in Cook County, to the tune of $25,000. My share of the profit from the Des Plaines store, after splitting with Art Jacobs, didn’t leave much. Moreover, from my experience in opening that store, I could foresee that unless I moved a lot faster, expenses were going to gobble up my $950 license fees long before a franchise could complete its building, generate business, and start returning 1.9 percent of its sales to me. I was spreading myself far too thin as it was, so the only way to speed up the franchising process would be to hire someone to help. I was damned if I did, doomed if I didn’t.
Harry Sonneborn was thirty-nine years old when he came in to see me. He was almost six feet but looked taller, because of a kind
of awkward, Lincolnesque angularity about him. He wore his hair cropped in a German military cut that suited the disciplined intensity of his manner. We found that we talked the same language concerning the franchise business and its potential. Obviously, as Harry said, it was a business fraught with a great deal of danger. Developing a franchise system and enforcing high standards would be difficult. Also, of course, there was the growing specter of government regulation. As we discussed these things, it became evident to me that Harry was exactly the man I needed to help me get McDonald’s going. The problem remained, though, as I explained to him once more, that I could not afford to hire him. His answer was that he would go home and figure out the lowest possible salary he could take and still be able to support his family; then he’d get back to me.
I had to admire his persistence, and also the resolve he had that he would devote every working minute to McDonald’s—twenty-four hours a day if necessary. I believed him. It was exactly the way I felt, and June Martino, too.
All my thoughts led to the conclusion that I had to hire Harry. I could visualize him handling finance while June ran the office and I was responsible for operations and new development. With that sort of setup, we could move ahead rapidly, which was the only way to go. In the first place, I had to mobilize my franchise sales and start generating some cash flow. Second, I was in the field by myself at the moment, but I knew that others would soon be jumping in to compete, and I wanted to take full advantage of my head start.