YouSaid · the spoken record

Ray Kroc

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2017-05-27

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2017-05-27

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1. “The key element in these individual success stories and in McDonald's itself is not knack or education, it's determination. This is expressed very well in my favorite homily. Press on nothing in the world can take the place of persistence. Talent will not. Nothing is more common than unsuccessful men with talent. Genius will not. Unrewarded genius is almost a proverb. Education will not. The world is full of educated derelicts. Persistence and determination alone are omnipotent.”

   2017-05-27 · Founders · #7 Grinding It Out: The Making of McDonald's · IDENTIFIED FROM THE TRANSCRIPT · source

2. “Yeah, this book was written a few years before he died and he died in 1984. So I put that in there because I think it's true today. When you look at the rise of education costs, at least in the United States and then the stagnating wages, and then you look at something like coding, programming, which you can learn in college, but is also a trade, could be taught as a trade school online with companies like Treehouse. I like the idea of trade schools. I like the idea of colleges preparing you for jobs that actually exist. And it was really interesting to hear him talk about this. So I want to end here. And it's the best place to end, I think, because it sums up what he thinks it takes to be successful.”

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3. “And other charities like the Ronald McDonald House, St. Jude's Children's Hospital, stuff like that. But this part I highlighted was interesting. One thing I flatly refused to give money to is the support of any college. I've been wooed by some of the finest universities in the land, but I tell them they will not get a cent from me unless they put in a trade school. Our colleges are crowded with young people who are learning a lot about liberal arts and little about earning a living. There are too many baccalaureates and too few butchers. Educators get long faces when I talk like this and accuse me of being anti-intellectual. That's not quite right. I'm anti-phony intellectual, and that's what many of them are. I include that part because”

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4. “Also, come up with some pretty big flops for McDonald's. Roast beef was another bust. We were pretty excited about it first, but roast beef is difficult for our kind of operation to deal with. It went well in a few stores, but it simply did not adapt to our system. We learned a lot about testing requirements in that roast beef fiasco, though. That's important, because if you're willing to take big risks, and I always have been, you are bound to blow one once in a while. So when you strike out, you should try to learn as much as you can from it. I think we probably found out enough about our own methods from the roast beef experiment to more than make up for what we lost on it. So as he became really wealthy, he gave a lot of money to charity. And in the book, they talk about, I think they gave over $1 billion to MPR and other.”

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5. “One time, Harry, June, and I invested in a beer garden restaurant on the south side of Chicago. That was a loser. I tried my hand with an idea for an elegant hamburger restaurant called Raymond's. The corporation opened two of them, one in Beverly Hills, the other in Chicago. They didn't take hold, so I cut our losses and got out. One good thing came of Raymond's. It gave us the prototype for the in city McDonald's restaurant that are now growing so popular. Part of the problem with Raymond's was my insistence on quality and a restricted kind of operation, which kept the profit margin as thin as the skin on a hot dog. The same was true of a venture we started back in my California days. The Jane Dobbins Pie Tree chain hell of an idea, great pies too. In fact, they were so good we were growing broke selling them.”

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6. “So he's already at that, he was talking about that story came from after he bought the team. This is before he buys the team. Don called Buzzy Bavasi, general manager of the club, and told him that Ray Croc wanted to buy. That's fine, Buzzy said. Who else is in the group? He is the group. There was a long, skeptical silence. Then Don added, he owns $7 million of McDonald's common stock, which is selling for about $55 a share. So if you do the math, that's $385 million, and this is $1974. This section I want to include because Although McDonald's is a massive success, people can think maybe everything you touch is going to be successful. This is a list of all its failures, which I thought was really interesting that you put at the end of the book.”

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7. “Okay, so we're almost done. There's only a couple more parts I want to highlight. At this part, I just thought this made me chuckle. He's extremely wealthy, and you'll see he wants to buy the San Diego Padres, the baseball team. Everyone, including my wife and the Commissioner of Baseball, was shocked when I grabbed the public address microphone at the Padre's first home game in nineteen seventy and chewed out the players for putting on a rotten performance. The $40,000 fans roared and the baseball writers went crazy. That moment had been building for a good many weeks, probably since I first asked Don Lubin to begin negotiations to buy the team for me.”

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8. “In fact, Ray goes to work even after he has a stroke and he's in a wheelchair, he goes to work every day until he dies in his 80s Skipping ahead, there's just this one part that I thought was interesting. I labeled it, you can't always be right. Hell, if I had listened to the computers and did what they proposed with McDonald's, I'd have a store with a row of vending machines in it. You'd push some buttons, and out would come your Big Mac shake and fries, all prepared automatically. We could do that, I'm sure, but we never will. They're actually putting in, getting rid of cashiers, I think like 15,000 stores right now with automated kiosks. So maybe the food's not prepared automatically, but they're definitely going, diving headfirst into automation.”

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9. “At last, I felt like a complete person. Now I told myself I could take life a little easier and enjoy it. I was finished grinding it out. But business is not like painting a picture. You can't put a final brushstroke on it and then hang it on the wall and admire it. We have a slogan posted on the walls around McDonald's headquarters that says nothing recedes like success. Don't let it happen to us or you. I wasn't about to let it happen to me Fred Turner, who was Fred's the guy he named a CEO, Fred Turner was doing a fine job of running the company, as I know he would, but there were lots of areas that needed my attention. In many corporations when the top guy moves up, it's to a figurehead role. He becomes chairman of the board, not me.”

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10. “So now at this point, Harry was his partner, one of the first few people that were hired and built when McDonald's only had one store. And now they have hundreds. And he's out. So Race running it by himself. He does this for a while. And after the IPO, he... Let somebody else take over at CEO.”

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11. “I was in our La Salle Street offices the next morning waiting for Harry. When he came in, we went at it, hammered in tongs. I forced the issue all the way, and the result was that he resigned. It was a hell of a mess, and I stewed about it all the way back to California. Based on his employment agreement, he would be paid $100,000 a year. Harry had a substantial chunk of McDonald's stock, but he was so certain that the company would go down the chute that when he left he sold it all Here's the result of that. But it's a shame because although the sale gave him a few million dollars at the time, the stock subsequently had a series of splits that made each share worth ten times as much. Had he kept it his stock would be worth over one hundred million dollars, so his lack of faith in us was very costly to him.”

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12. “I never felt this so keenly as when Harry Sauniborne and I had our final confrontation, and he resigned. So their having a disagreement because Ray's always about expanding, and Harry is always about being more physically conservative. So finally, Harry put a moratorium on all new store development, no more construction. I was opposed to it. But when Luigi came into my office wringing his hands and complaining, I really couldn't give him any direction. Mr Croc, what am I going to do? he asked. I have thirty three locations in the works. They are all good ones. We can't afford to lose them. What shall I do? Tell him something vague, Luigi. String em along, I said. I'm going to Chicago and see what I can do.”

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13. “so that this disagreement between Harry and Ray, the first of many, and it winds up leading to their dissolution of their partnership. So they wind up going, they have their initial public offering, and they went to market at $22.50 a share. They become wealthier than they ever could have imagined. Something interesting was... The McDonald's IPO was the first time that women were ever allowed on the floor of the stock exchange, the New York Stock Exchange. And that was in July 1966. Also, a little note about their performance. At this time, in 1966, they were doing over $200 million in sales. And they had served over 2 billion customers at that time. So, this is the end of a partnership. There's a cross you must bear if you intend to be head of a big corporation.”

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14. “Harry didn't see things my way in this matter. He wanted tighter corporate controls a more authoritarian posture. I maintained that authority should go with a job. Some wrong decisions may be made as a result, but that's the only way you can encourage strong people to grow in an organization. Sit on them and they will be stifled. The best ones will go elsewhere. I knew that very well from my past experience with John Clark at the Lily Tulip Cup when he was selling paper cups. I believe that less is more in the case of corporate management. For its size, McDonald's today is the most unstructured corporation I know, and I don't think you could find a happier, more secure, harder working group of executives anywhere.”

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15. “Okay, so this is when McDonald's is preparing for an IPO. And there's also Ray's thoughts on the difference between decentralization and centralization. He's a favor of decentralization. The reason for going public in addition to raising capital for the company was to give us some funds ourselves. We had put this tremendous money-gathering machine in motion, and it was running at a fantastic rate, but we hadn't been taking anything out. We were plowing it all back in, so as not to slow down the company's expansion. So Harry spent his days closeted in meetings with bankers, brokers, and lawyers. I was busy trying to decentralize our management structure. We had six hundred thirty seven stores now, and it was an unwieldy to supervise them all from Chicago. It has always been my belief that authority should be placed at the lowest possible level. I wanted the man closest to the stores to be able to make decisions without seeking direction from headquarters.”

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16. “Some people are bachelors by nature. I am not. I guess I need to be married to feel complete. That's why I fell so hard for Jane. Her name was Jane Dobbins Green. She was John Wayne's secretary, a mutual friend introduced us, and I was charmed by Jane's sweet disposition. We had dinner together the night after we met, and the next night and the night after that. In fact, we had dinner together five nights in a row. I was enchanted. Within two weeks we were married.”

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17. “The advertising campaign we put together was a smash hit. It turned Californians into our parking lots as though blindfolds had been removed from their eyes, and suddenly they could see the golden arches. That was a big lesson for me in the effectiveness of television. That's definitely something you still see with McDonald's today. They're one of the largest spenders on advertising in the world. Moving ahead a little bit in this book, a highlight of a passage that the note I left was this guy is a little nuts.”

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18. “Solved our supply problems in California and built more stores. Business gradually picked up, but it remained far lower than it should have been. In mid-summer of 1963, Nick Karos came to me with a proposal he had drafted for a television advertising campaign. The projected cost was one hundred eighty thousand dollars, and he wanted to pay for it by raising the price of hamburgers in our company-owned stores, a penny from fifteen to sixteen cents. Nick, this is a terrific plan, I said, but we're not going to raise the price. What I want you to do is go back to Chicago and present this to Harry Saniborn. Make him come up with the money. I knew he'd be able to do it because the logic of his one page memo was irrefutable. It demonstrated precisely how an ad campaign would repay its cost many times over. While failing to spend the money would cost us much more in the long run. Nick was successful, although Harry went along rather reluctantly.”

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19. “million was peanuts compared to what the corporation earned in the years to follow by retaining that 0.5 instead of paying it to Mac and Dick McDonald. On today's system-wide sales of more than $3 billion, that 0.5% would be over $15 million a year. So, if the McDonald's brothers didn't sell out for 2.7 million total, they could have been making $15 million a year and having to do nothing, just sit back and collect. And this part of the book is just his random thoughts on the effect of advertising.”

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20. “Three strikes, and we were out on the street looking for some Santa Claus with a big bag full of money. I was feeling pretty low, and then Harry found our money man in New York. His name was John Bristol, and he was the financial advisor to Princeton University, Howard University, Carnegie Tech, and the Ford Foundation as well as others. A total of twelve educational and charitable institutions. The deal we agreed on put a new wrinkle in American financial arrangements, but it was an extremely successful deal. So they get the money to buy out the McDonald's brothers. Here's the results. So these 12 institutions that lend them the money, they nicknamed them the 12 apostles. It says it was an extremely successful deal. They made about $12 million on that deal. So the institutions made tons of money on it. But it was also a good deal for Ray. And here's why. Remember that we had been forking over 0.5% to the McDonald's brothers all along anyhow. The total cost of the transaction to us, about $14.”

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21. “Well, we'd like to have a million dollars apiece after taxes, Ray, Dick explained. That's for all the rights, the name, the San Bernardino store and everything. You know, we feel we've earned it. We've been in business over thirty years working seven days a week, weekend and week out. Very touching, but somehow I just couldn't seem to work up any tears of pity. This was really going to take some financial wheeling and dealing. I asked Harry to take a run at the three insurance companies that had lent us a million and a half dollars. We had to anyhow because they had first write a refusal on McDonald's borrowing for a period. But John Gossel said Paul Revere life couldn't take any bigger bite than it had. So basically all of them said they couldn't do it.”

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22. “Max health had not been the best, and Dick had expressed concern about that and talked about retiring. I wanted to help them retire, but I was afraid of what it might cost me. Harry and I had several long sessions hashing out over the pros and cons of it, deciding the best approach to take. Finally, we determined that we would hit them right between the eyes with it. No use shilly shallying, which I have no idea what that means, because their lawyer would only waste a lot of time bickering about it, and we would come out at the same place in the end anyhow. So I called Dick MacDonald and asked him to name their After a day or two, he did, and I dropped the phone, my teeth and everything else. He asked me what that noise was, and I told him that was me jumping out of the twentieth floor of the building. They were asking $2.7 million.”

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23. “For example, I had introduced them to my good friend and paper supplier, Lou Perlman, and they began buying all their paper products from him too. They would come to Chicago and visit Lou and ask him to drive them around to see all the McDonald's locations in the area, which he did, but they would not come by corporate headquarters or even call me on the telephone. Lou would fill me in later on where they'd gone and what they had said. But the main reason I wanted to be done with the McDonald's was that their refusal to alter any terms of our agreement was a drag on our development. They blamed their attorney for this lack of cooperation, and he and I were certainly at Dagger's points all the time. But whatever the reason, I wanted to be free of their hold on me. I knew from conversations that I had with Lou Perlman and others that the McDonald's boys could be persuaded to sell.”

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24. “So jumping ahead a little bit ahead in the book, this entire time he has somewhat contemptuous relationship with McDonald's brothers, and now he's devising a plan to get out of a contract and become the sole owner of McDonald's, which now, the reason the movie is called Founders, because he really is the founder of McDonald's. He wasn't the first one to start the McDonald's hamburger stand in San Bernardino, but the actual McDonald's franchise system, which is why the company is so valuable, he's the one that came up with that. So, the most important item in my plans for the company was to end our relationship with the McDonald's brothers. This was partly for personal reasons. Mac and Dick were beginning to get on my nerves with their business game playing.”

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25. “Things turned out in the clear light of the following days to be more fanciful than functional. And the reason usually was that some small but essential detail had been overlooked in my grand design. So the risk of seemingly simplistic, I emphasized the importance of details And here's his main point you must perfect every fundamental of your business if you expect it to perform well His random thought on competition. My attitude was that competition can try to steal my plans and copy my style, but they can't read my mind, so I'll leave them a mile and a half behind.”

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26. “I always felt comfortable working with Fred Turner because he's a detail man like I am. There is a certain kind of mind that conceives new ideas as complete systems with all their parts functioning. That sentence I would say describes Steve Jobs who we covered on the podcast and Edwin Lan who we also covered on the podcast. I don't think in that grand design pattern I work from the part to the whole and I don't move on to the large-scale ideas until I've perfected the small details. To me this is much more flexible approach. For example, when I was starting McDonald's, my original purpose was to sell more multimixers. If I had fixed that in my mind as a master plan and worked toward that end, my system would have been far different and much smaller in a much smaller scale creation. Sweeping plans that I could see complete, or so it seemed, but every time”

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27. “Part I labeled a 30-year overnight success. My years of experience in selling paper cups and multimixers paid off because I knew exactly what hands held the strings I wanted to pull to get the jobs done. People have marveled at the fact that I didn't start McDonald's until I was fifty two years old and then I became a success overnight. But I was just like a lot of show business personalities who work away quietly at their craft for years, and then suddenly get the right brake and make it big. I was an overnight success all right, but thirty years is a long, long night. Some of this is just random business advice he has peppered throughout the book. This one is, I have the note I wrote, it's good idea on why to focus on details over grand design.”

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28. “When I read that, it made me think of one of my all-time favorite quotes. I think it's attributed to Bruce Lee, but it's really hard to tell if it actually came from him or not. And it's how you do one thing is how you do all things. And it's something I just kind of remind myself. If I find myself slacking or making a lot of mistakes in one area, it usually means I'm not focused about everything I'm doing. And so it just reminds me to take a look at everything that I have going on. It's usually a sign. Like he was saying, the fact that he didn't wear the same hat, even though all of them were supposed to be in the same uniform, are shiny shoes, just means that he was sloppy. So is that a reason to fire him? No, but it's probably an indicator of something else that he's doing incorrectly as well.”

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29. “Just read it. June Martino believed, for example, that I once fired a member of our staff because he didn't wear the right kind of hat and didn't keep his shoes shined. She was correct as far as it went. I didn't like those things about the man, but those weren't the reasons I fired him. I just knew that he wasn't right for us. He was prone to making mistakes, and the hat and shoes were merely symptoms of his sloppy way of thinking.”

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30. “Plus a profit. We received this set monthly minimum of our percentage of the volume the operator did, whichever was greater. After a time we began realizing substantial revenues from this formula, and we could see that we were merely nibbling around the engines of this huge hamburger frontier we were exploring. So that's exactly why you've probably heard the saying that McDonald's is in a real estate business, not the hamburger business. They found a way to finance their operations by being a realty company first and then selling hamburgers on that land. So just jumping ahead, this is just a random little anecdote I liked.”

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31. “June Martino, who's working with them, was afraid I was going to blow my top and throw Harry and his consultant both into the street. But that was the farthest thing for my mind. I know that you have to spend money to make money, and as far as I was concerned, Harry was simply doing the job I had hired him to do. One of the reasons his subordinated lease idea worked so well was that in the late fifties we didn't have the proliferation of franchise operations and the fierce competition for commercial fringe property that developed in the course of the next twenty five years. Another reason was that both Harry and I were pretty good salesmen, and we could romance a property owner with the notion of earning at least a little something from his vacant land. This was the beginning of real income for McDonald's. Harry devised a formula for the monthly payments being made by our operators that paid our own mortgage and other expenses.”

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32. “Mortgage on the building. The landlord would subordinate his land to the building. I must admit that I was a bit skeptical. Why would a landlord want to do that? But I let Harry plunge ahead without interference. I believe that if you hire a man to do a job, you ought to get out of the way and let him do it. If you doubt his ability, you shouldn't have hired him in the first place. I knew that Harry had schooled himself thoroughly in the fundamentals of leasing agreements. In addition to the volumes he poured over, he hired a consultant from Washington, DC. Harry brought this fellow to Chicago and has spent a week talking to him for three hundred dollars a day.”

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33. “I backed it by going into Hawk for everything I had, my house, my car, you name it. Talk about grinding it out. So he's saying he put every single asset he did as collateral to what they're about to do. I felt like Samson with a fresh haircut, but that dream of what the company could be sustained me. We started franchise realty corporation with $1,000 paid in capital, and Harry parlayed that cash investment into something like $170 million worth of real estate. Here's the genius part. His idea, simply put, was that we could induce a property owner to lease us his land on a subordinated basis. That is, he would take back a second mortgage so that we could go to a lending institution in those early days as a bank and arrange a first”

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34. “That idea was exciting. It appealed to my salesman's instinct because obviously it would make the right to operate a McDonald's restaurant far more valuable to a potential operator than if we were franchising only a name. So basically give them an entire business as opposed to just a name. But building Dreamcastles was one thing. Actually getting into the restaurant development business was a seemingly insurmountable problem. Harry's solution The formation of franchise realty corporation was to my mind a stroke of financing genius and here's how they do it. Franchise Realty was the supreme example of a guy putting his money where his mouth is. I did a lot of talking about the ideal way to develop McDonald's with the kind of quality and uniformity that would ensure our success. And when Harry came up with a way to make it possible”

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35. “The experience of tasty freeze and dairy cream, two prominent franchising firms in the country at that time, and our own sense of direction with the units in California led to the conclusion that the only practical way for McDonald's to grow as we envisioned would be for us to develop the restaurants ourselves. Being in the restaurant development business would mean that we could plan a strong system in which locations could be developed by McDonald's as part as an overall long range nationwide marketing program.”

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36. “Would be in our ability to provide techniques of preparation that operators would accept because they were superior to methods they could dream up for themselves. But research and development in a staff to supervise the service operators effectively takes money. Now remember at this time he's only making one point nine percent of franchisees gross sales and he has to give up 0.5 of that to the McDonald's brother. So effectively 1.4% and there's selling hamburgers a time for 15 cents. So that's not going to get it done. So this is where they change the business model of what is known as McDonald's today.”

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37. “Biggest of these was the move that made possible McDonald's dramatic growth. It started our evolution as a company whose business was developing restaurants and selling franchises to operate them. We agreed that we wanted McDonald's to be more than just a name used by many different people. We wanted to build a restaurant system that would be known for food of consistently high quality and uniform methods of preparation. Our aim, of course, was to ensure repeat business based on the system's reputation rather than the quality of a single store operator. This would require a continuing program of educating and assisting operators and a constant review of their performance. It would also require a full time program of research and development. I knew in my bones that the key to uniformity”

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38. “To not be a customer of his because then you might be optimizing for short-term sales success instead of long-term franchise success. I thought that was really, really good idea, especially this time where the whole reason we're covering RayCrock is not because Fast food restaurants are that interesting. But the actual franchise system and the business model that he came up with and pioneered is interesting. And he got. Hope with that from Harry. And this is going to be one of the longer parts we cover.”

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39. “One of the basic decisions, and this is before I get into the genus idea, Harry came up with, this paragraph was really surprising to me. I think actually really smart too. One of the basic decisions I made in this period affected the heart of my franchise system and how it would develop. It was that the corporation was not going to get involved in being a supplier for its operators. My belief was that I had to help the individual operator succeed in every way I could. His success would ensure my success, but I couldn't do that and at the same time treat him as a customer. So what he's saying there is a lot of franchisees or franchisors. So they have you sign a franchise agreement and then you have to buy the supplies needed from the franchise from them. He didn't do that. They would all buy from the same suppliers, but that supplier wouldn't be McDonald's because he wanted his franchise E.”

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40. “So jumping a little bit ahead, one of the most important things that ever happened to McDonald's is Ray hires this guy named Harry Sunaborn. And I want to tell you a little about Harry, and then I want to tell you about the genius idea that changed McDonald's forever. Yet I had to admire the way he studied the legal and financial problems we were steaming into. He immersed himself in stacks of books and learned the ins and outs of contracts and financial maneuvers as well as the lawyers and the bankers, and that wasn't his trade. He had previously worked at, I think, Dairy Queen.”

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41. “In the evenings, I would commute back to the store, back to the plane, and walk over to the store. I was always eager to see it come into my view, my McDonald's, but sometimes that sight pleased me a lot less than other times. Sometimes Ed 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 concerned about these details as I was because he proved it in his own stores in later years. Everything else was secondary to me.”

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42. “I would drive down to Duplane. That's where the first McDonald's store is. Each morning and help get the place ready to open. The janitor would arrive at the same time that I did, and if there was nothing else to be done, I'd help him. I have never been too proud to grab a mop and clean up the restrooms, even if I happen 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 could rat out a detailed instructions for the manager, the manager's name's head. Ed came in about 10 o'clock in the morning to open the store at eleven 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 seven hundred fifty seven express train to Chicago and be in my office.”

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43. “Let him try, and I plunged ahead. So at this time, he's developing franchises, but he still has his day job selling multi-mixtures. I do want to say something that would become apparent, I think, if you read the book and throughout the podcast. He wasn't the easiest person to deal with. There's a lot of people that entrepreneurs that were covering the podcast. I think almost every single one is headstrong. Maybe that's why they don't get just jobs like normal people. But you can definitely get the sense that he was hard charging. And probably really hard to deal with. So I just want to get that out of the way. So here's a little bit about his schedule before he's able to do McDonald's full-time.”

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44. “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 the attorney. But the contract calls for a registered letter if mister Croc does not have that, he is put in jeopardy, said my counsel. That's your problem. It was almost as if 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 McDonald's should close in on me, so I said.”

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45. “So he's building out a McDonald's franchise at this time, and he needs to change something, and his contract says he has to get in writing. So I called the McDonald's 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 poo-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 had a mind to. I hung up hoping that they would have second thoughts and semi 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 when I got breathing space, I would fly out to see the McDonald's and get all the contractual wrinkles ironed out at once. That would have worked had the McDonald's been reasonable men. Instead, they were obtuse”

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46. “It closed the door between us. She dutifully attended Macdonald's gatherings in later years, and she was liked by operators, wives and by women on the staff, for there was nothing more between us. Our thirty five years of holy matrimony endured another five in unholy acrimony. Okay, so I have this section labeled bizarre, and it's just some weird behavior from the McDonald's brothers. You can clearly see that this relationship with them is not going to last very long.”

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47. “Could take their idea and copy it and not pay them one red cent. Just a little anecdote here. It's kind of a warning, and we see this sometimes where the McDonald's basically kills his first marriage. His wife, we're going to talk about how his wife, his first wife here. Her name is Ethel. Ethel was incensed by the whole thing. We had no obligations that would be jeopardized by it. Our daughter, Marilyn, what they're saying by it, by him entering into this agreement for becoming the hev McDonald's franchise. Her 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 MacDonald's are my plans. I had done it again and once too often as far as she was concerned. The corals we had had when I extended the mortgage were mere preludes to this one.”

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48. “I've often been asked why I didn't simply copy the McDonald's brothers plan. They showed me the whole thing and it would have been an easy matter, seemingly, to pattern a restaurant after theirs. Truthfully, the idea never crossed my mind. I saw through the eyes of a salesman. He was a complete package, and I could get out and talk up a storm about it. Remember, I was thinking more about prospective multimixer sales than hamburgers at that point. Besides, the brothers did have some equipment that couldn't be readily copied. They had a specially fabricated aluminum griddle for one thing, and they set up all of the rest of the equipment in a very precise step-saving pattern. Then there was a name. I had a strong intuitive sense that the name McDonald's was exactly right. I couldn't have taken the name, but for the rest of it, I guess the real answer is that I was so naive or so honest that it would have never occurred to me that I”

    2017-05-27 · Founders · #7 Grinding It Out: The Making of McDonald's · IDENTIFIED FROM THE TRANSCRIPT · source

49. “Becomes one of the largest companies ever built, and he didn't even have an attorney I don't know. I just thought that part was pretty crazy. And let's go into the details of the agreement. The agreement gave me 1.9% of the gross sales from franchises. I had proposed 2%. The McDonald's said, no, no, if you tell a franchisee you're going to take 2%, he'll balk. It sounds too full and rounded. Make it 1 and 9 tenths, and it sounds like a lot less. So I humored them on that one. The brothers were to get 0.5 out of my 1.9%. This seemed fair enough, and it was. If they had played their cards right, that point five percent would have made them unbelievably wealthy.”

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50. “This seemingly innocuous requirement created massive problems for me. There's an old saying that a man who represents himself has a fool for a lawyer, and it certainly applied in this instance. I was just carried away by the thought of Macdonald's drivance peripherating like rabbits with eight multimixers in each one. Also, I was swayed by the affable openness of the McDonald's brothers. The meeting was extremely cordial. I trusted them from the outset. That trust would later turn to bristling suspicion, but I had no inkling of that eventuality. I don't think I pronounced that last word correctly either. So let's just pause there real quick This agreement he's signing is the foundation to the McDonald's Corporation, which is separate from the single McDonald's burger stand in San Bernardino. And it's the foundation of a”

    2017-05-27 · Founders · #7 Grinding It Out: The Making of McDonald's · IDENTIFIED FROM THE TRANSCRIPT · source