Ray Kroc, McDonald’s Mastermind (Volume Six, Episode Two) Part One

In July of 1954, an obscure milk shake mixer salesman walked into a fast food restaurant in San Bernardino, CA. The restaurant was operated by two brothers named McDonald, the result of this interaction profoundly changed American culture, business and nutrition forever.

Ray Kroc in the Twenties.

Ray Kroc first interacted with Prince Castle as the Chicago based account manager for Lily-Tulip and sensing the enormous potential of the Multimixer device, he secured the national distribution rights for the machine in 1939.  For two years he rapidly increased sales, his customers mostly the corner drug stores and soda fountains that were a mainstay of urban America.

Ray Kroc, Chairman, McDonald’s Corporation

Just as Kroc began to build national momentum for his sales distribution company, America entered World War II, a development that cut off two staples necessary for his continued growth.  Civilian access to copper, a critical element of his Multimixer motors was halted, any supplies of this metal earmarked for military consumption.  Sugar was also heavily rationed so that products like ice cream were virtually unavailable during wartime.  Rather than shutting down, Kroc improvised, determined to tough it out until the end of the war.  He found two additive products, consisting of mostly corn syrup and a chemical stabilizer that when mixed with chilled milk resulted in something that mimicked ice cream. 

Richard McDonald

The McDonalds were not even the first to market specialty hamburgers in southern California.  In 1937, a Glendale, California owner of a drive-in restaurant , Robert Wian, invented a double decker hamburger sandwich slathered with various condiments and toppings that was so successful, he called it the Big Boy, and prompted a restaurant name change to Bob’s Big Boy, eventually another successful nationwide hamburger chain.  The McDonalds brothers would impact the rapidly evolving American fast food landscape by implementing some concepts that were, at the time, revolutionary.  Although quite successful, their drive-in restaurant incorporated the car-hop delivery system, in which individuals, usually teenaged females offered curb or parking lot service on a tray, which was popular with teenagers but turned their location into a hangout where the parking lot was filled with leather jacketed youngsters who took up space for hours and also alienated older families with children who did not like such an atmosphere.

The Multimixer

It was in early 1954 that Kroc decided that at the very least, to try and buck up his sales numbers, he wanted to learn more about a restaurant run by two brothers in San Bernadino, California who had ordered ten Multimixers for their small Southern California location.  He even asked his West coast rep how such a small restaurant could need enough machines to prepare as many as sixty shakes at a time and then decided he would go see for himself.  If nothing else, this restaurant was generating orders from other hamburger joints that were trying to copy this business, called McDonalds, to duplicate their wild success.  

The Original Mcdonald’s, San Bernardino, CA

As the carhop-hangout atmosphere dissipated, working class families began to descend on the restaurant in greater numbers, eating at a restaurant now a viable economic alternative.  Children also enjoyed going up to the window, ordering and then bringing back the food to their car, all under the watchful eyes of their parents, a lesson in independence.  The building itself was different with an octagonal shape and glassed in design from the roof to the countertop, the always immaculate kitchen, with its stainless steel, grills and efficient employees a revelation to most customers who had never set eyes on a restaurant’s interior.  On the roof was a huge neon sign with the MacDonald’s name, and their mascot Speedy, the symbol for what they dubbed the, “Speedy Delivery System.”  Within a year, the restaurant regained the same volume it had before its realignment.  It further streamlined its production line process with customized tools, and extremely specific guidelines.  And, perhaps to maintain a focused, completely businesslike approach, especially among younger employees, only males were hired.  McDonalds mushroomed into a high volume, unique operation with eventually spectacular results.

Oldest McDonald’s still operating in the US, third outlet ever, built in 1953,

Ray Kroc was also not the first individual to discuss potentially franchising the McDonald’s name and concept.  In fact, by the time Kroc approached them the brothers had actually sold fifteen franchises. Well, sort of.  What they sold was a manual describing the Speedy Delivery Service, some building plans, one week of training with a store manager and the McDonald’s name for a fee of $1,000.  They specifically did not provide any financial or business connection on any ongoing basis, the franchisee strictly on their own.  Even this process was something that Mac and Dick did not pursue aggressively.  

Ray Kroc, McDonald’s Mastermind (Volume Six, Episode Two) Part Two

In July of 1954, an obscure milk shake mixer salesman walked into a fast food restaurant in San Bernardino, CA. The restaurant was operated by two brothers named McDonald, the result of this interaction profoundly changed American culture, business and nutrition forever.

Joan Kroc

Despite four decades and many years of dealing with a virtual absentee husband and serious anxiety over their household debt, Eleanor Kroc was still hanging in on the marriage.  That is until, in 1961, when Kroc said he wanted a divorce.  Ethel settled for the house, the Lincoln automobile and 30,000 dollars a year in alimony.  Part of Kroc’s decision to divorce stemmed from a relationship that began when he met a potential licensee at an upscale restaurant.  The keyboard player and singer at this restaurant was a stunning blonde named Joan Smith.  Kroc was so smitten that he could barely focus on the meeting, with Bob Zien, who owned this restaurant, the Criterion.  Zien hired Joan Smith’s husband Rawley Smith to manage his first McDonalds and entered into a partnership with Smith when Zien purchased a second franchise.  Because the Smith’s were then part of the McDonalds corporate family, they frequently interacted with Ray Kroc, who eventually verbalized his romantic feelings to Joan directly.  They agreed to leave their spouses, Kroc and Joan relocating to Woodland Hills, CA in late 1961.  They needed to cohabitate for six weeks to be able to get a quickie Nevada divorce but five weeks into the arrangement, Joan balked.  Her daughter disliked Kroc immediately and her mother was appalled.  Kroc had already sold his ownership of his Prince Castle distribution company to senior executives for 150,000 dollars, essentially a loan, and was committed to relocating to the West Coast, anyway, to personally spearhead McDonald’s West Coast expansion.            Joan eventually had second thoughts about breaking off the engagement, but by then Kroc had moved on. 

Fred Turner, Ray Kroc’s protege and successor.

Kroc’s McDonald’s operation was mushrooming in size and he realized both his own personal limitations and that he needed to assemble a corporate structure to manage such a fast growing entity.  He already identified Fred Turner as an individual he wanted to include in his inner management circle. 

Ray Kroc, with Padres logo on polo shirt

Once he delegated the operation of McDonalds to Fred Turner, Ray Kroc became as much of a media personality and company spokesman as opposed to a serious hands on administrator, something he never really enjoyed anyway.  He no longer had to worry much about business in any case. 

Padres home during Kroc’s tenure, Jack Murphy Stadium

In 1973, a golden opportunity presented itself to Kroc that for him was the perfect outlet.  Based on his mid-western middle class Chicago roots, Kroc loved baseball and the Chicago Cubs and once his net worth became considerable, he made several inquiries into actually buying the team.  The long time owners, the Wrigley family were not interested in selling but in San Diego, the owner of baseball’s Padres, C. Arnholt Smith was battling his own bank’s failure, IRS demands for back taxes and fraud and embezzlement allegations.  He quickly sold off the Padres to a group intent on moving the team to Washington, DC but when the city of San Diego sued to block the deal, Smith couldn’t afford to wait.  Ray Kroc emerged as a civic hero quickly ponying up 12 million dollars for the team.  

Swimming meet, Kroc Center, San Diego, CA

After many years of very visible philanthropy, Joan Kroc began to step out of the limelight finding that with each gift or charity event, she was besieged by countless requests and pleas from thousands of determined individuals and organizations.  She never stopped giving money away, she just became much more spontaneous and anonymous, not wishing to spend her time fending off the public and frequently inspired by some news report of a particularly dreadful event.  She also spent much of the late nineties working with the San Diego chapter of the Salvation Army to create a community center, a kind of athletic and fitness facility, library auditorium, outdoor swimming pool and even an ice rink all rolled into one.  In 2002, 87 million dollars later, this 12 acre, 132,000 square foot facility became a reality, the Salvation Army Kroc Center.      

Ray Kroc, McDonald’s Mastermind (Volume Six, Episode Two) Book and Music Information

The books used to develop this podcast include:

“McDonald’s: Behind the Arches,” by John F. Love

“Fast Food Nation,” by Eric Schlosser

“Ray and Joan,” by Lisa Napoli

The intro music for this podcast is entitled, “Good Starts,” by Jingle Punks

The outro for this podcast is entitled, “Spirit Riders,” by Telecasted