Ray Kroc- 52 and starting

McDonalds, we’ve all heard heard of it, most of us have eaten there. We all know the McDonald brothers- the founders and name sake of the brand. But few know of the man who ran the company for so many years, and made it the brand we know today, Ray Kroc. But Ray Kroc wasn’t your typical entrepreneur, he was old, 52 years old to be exact. 

In 1954, Ray Kroc joined the McDonalds company, he had previously been working as a milkshake machine salesman. He met the McDonald brothers after they bought his milkshake machines to be used in their one store location. He decided to talk to them about their business, and in the end, he decided to buy one of six franchises. 

The McDonald brothers were trying to expand their business from their initial San Bernardino location. Kroc was one of the original franchises, opening his first franchise in Illinois. However, Kroc began to have differences with the McDonald brothers about the menu and layout of his store. 

When Kroc made “suggestions”, the brothers told Kroc that he couldn’t make changes. His main concern was the store layout, known as the original blueprint, he thought it needed modernizing. Despite this and Kroc’s pleas, the brothers wouldn’t formally allow him to change anything. 

Their main reason behind this was that ‘it would “Compromise the organisation”’. Out of frustration, Kroc decided to buy the brothers out. Kroc wanted to purchase all rights, property and operations of the McDonalds businesses.

After negotiations, $2.7 million was the agreed upon price. This was done So that each brother would get $1 million after taxes. Kroc bought the company for $2.7 million, remodelling the company and making the changes the brothers wouldn’t.

However, the brothers tried something that they knew would infuriate Kroc. They refused to transfer the real estate and rights to the original San Bernardino location. Understandably, Ray Kroc was annoyed by the perceived slight by the brothers.

When he enquired, the brothers told him they were giving the operation, and property, but not to him. The brothers had chosen to transfer the operation and property to the founding employees. 

In frustration, Ray Kroc set up his own restaurant near the original McDonalds. He called it “The Big M” as a sarcastic reference to a nickname of the McDonalds restaurant at the time. 

The McDonald brothers had neglected to retain the naming rights to their initial restaurant, which allowed Kroc to get away with it.

6 years later, after a lengthy court battle, the McDonalds and The Big M were no more. Ray Kroc then took measures to standardize the operations of all the McDonalds restaurants throughout the country. He wanted to make it so that every burger would taste the same, no matter the location. 

As we know, McDonalds went on to become one of the world’s largest corporations and restaurant chains. Now, 58,000,000 people are served each day. This is all a direct result of Kroc’s reforms, not too bad for someone who would “Comprise the organisation”.

Allegedly, the McDonald brothers retained a 0.5% royalty, however, this is unsubstantiated. This only claimed by a nephew of the McDonald brothers in an interview several years after the sale. The brothers said they had no regrets, although they never talked about the alleged 0.5% royalty. 

McDonalds has 14,350 locations in the US, compared to 10,660 hospitals! McDonalds currently has around 37,855 locations worldwide, with earnings of $5.2 billion! At the time of writing, McDonalds Corporation has a market capitalisation of $165.8 billion.

Each McDonalds stock currently trades at around $217 per share. McDonalds currently employs around 210,000 people worldwide, from college kids to 94 year olds! Not too bad for a 52 year old milkshake machine salesman from Illinois.

What does Ray Kroc show us?

Kroc shows us that age is not an excuse for why you can’t make money/ Regardless of your age, you can become financially free. We’ve seen this with Alexander Pask, Ronald Read, Earl Crawley and now Ray Kroc. Whether you’re 15 or 52, you can become successful. Ray Kroc went on to be worth $600 million at the time of his death. 

How can I replicate Ray Kroc?

Whilst you can’t directly replicate what Kroc did, McDonalds has already filled that niche. You can use it as your inspiration for starting up your own business. 

Starting your own business is really the only way to become financially free in this world. Governments will pay you for running your own business, in the form of tax breaks, this is whilst they are struggling to provide benefits and pensions.

Let’s say you earn $100,000 for your business, but, you need to spend $10,000 on meals with clients and fights to Florida, costing $2,500. You can tell the IRS (or other tax agencies) that you’re only going to pay for $87,500.

Whereas, an employee cannot do this, there’s also the fact that you have created something, and you’ll want to see it grow. Whereas most employees won’t, it will be difficult, but nothing worth doing is ever easy, that’s why it’s worth doing it.

Will you do something like Ray Kroc? Do you believe he was too old? Should this have been a factor? Tell me in the comments!