Jump to content

Ray Kroc

From Wikipedia, the free encyclopedia
(Redirected from Ray A. Kroc)

Ray Kroc
Kroc in 1976
Born
Raymond Albert Kroc

(1902-10-05)October 5, 1902
Oak Park, Illinois, United States
DiedJanuary 14, 1984(1984-01-14) (aged 81)
San Diego, California, United States
Political partyRepublican
Spouses
Ethel Fleming
​
​
(m. 1922; div. 1961)​
Jane Dobbins Green
​
​
(m. 1963; div. 1968)​
​
(m. 1969)​
Children1
Notes

Raymond Albert Kroc (October 5, 1902 – January 14, 1984) was an American businessman. He purchased the fast food company McDonald's in 1961 from the McDonald brothers and was its CEO from 1967 to 1973. Kroc is credited with the global expansion of McDonald's, turning it into the most successful fast food corporation in the world by revenue.[4][5]

Kroc was born in Oak Park, Illinois, and worked a variety of jobs, including as a paper cup salesman and a musician, before eventually becoming a milkshake mixer salesman. In 1954, he visited a hamburger restaurant in San Bernardino, California, owned by Richard and Maurice McDonald. Kroc was impressed with the efficiency and speed of the restaurant's operations, and he convinced the brothers to allow him to franchise the concept.

Under Kroc's leadership, McDonald's grew rapidly, and he implemented several key innovations, including the creation of a standardized menu and the development of a highly efficient assembly-line system for food preparation. Kroc also focused on aggressive expansion, opening new restaurants across the United States and eventually in other countries as well. He became the owner of McDonald's Corporation in 1961 and was credited as its founder.[5]

After retiring from McDonald's, he owned the San Diego Padres of Major League Baseball (MLB) from 1974 until his death in 1984.

Early life

[edit]

Kroc was born on October 5, 1902, in Oak Park, Illinois, near Chicago, to Czech-American parents, Rose Mary [née Hrach] (1881–1959) and Alois "Louis" Kroc (1879–1937).[6][7] Alois was born in Horní Stupno, part of Břasy near Rokycany.[8] Rose's father Vojtěch was from Ševětín and her maternal grandfather Josef Kotilínek was from Bořice.[9][10] After emigrating to America, Alois made a fortune speculating on land during the 1920s, only to lose everything with the stock market crash in 1929.[11]

During World War I, Kroc lied about his age and became a Red Cross ambulance driver at the age of 15.[12] The war ended shortly after he enlisted. During the Great Depression, Kroc worked a variety of jobs, including a paper-cup salesman, a Florida real estate agent, and a pianist in multiple bands.[13]

McDonald's

[edit]
Ray Kroc's first (McDonald's ninth) restaurant, which opened April 1955 in Des Plaines, Illinois

After World War II, Kroc found employment as a milkshake mixer salesman for the foodservice equipment manufacturer Prince Castle.[14] When Prince Castle mixers sales plummeted because of competition from lower-priced Hamilton Beach products, Kroc was impressed by Richard and Maurice McDonald, who had purchased eight of his mixers for their restaurant in San Bernardino, California, and visited them in 1954.[15]

After finalizing a franchise agreement with the McDonald brothers, Kroc sent a letter to Walt Disney. They had met as ambulance attendant trainees in Old Greenwich, Connecticut, during World War I. Kroc wrote, "I have very recently taken over the national franchise of the McDonald's system. I would like to inquire if there may be an opportunity for a McDonald's in your Disney Development." According to one account, Disney agreed but with a stipulation to increase the price of fries from ten cents to fifteen cents, allowing himself the profit. Kroc refused to gouge his loyal customers, leaving Disneyland to open without a McDonald's restaurant. Writer Eric Schlosser, writing in his book Fast Food Nation, believes that this is a doctored retelling of the transaction by some McDonald's marketing executives. The proposal was likely returned without approval.[16]

Kroc has been credited with making a number of innovative changes in the food-service franchise model. Chief among them was the sale of only single-store franchises instead of selling larger, territorial franchises which was common in the industry at the time. Kroc recognized that the sale of exclusive licenses for large markets was the quickest way for a franchisor to make money, but he also saw in the practice a loss in the franchisor's ability to exert control over the course and direction of a chain's development. Above all else, and in keeping with contractual obligations with the McDonald brothers, Kroc wanted uniformity in service and quality among all of the McDonald's locations. Without the ability to influence franchisees, Kroc knew that it would be difficult to achieve that goal. By granting a franchisee the right to only one store location at a time, Kroc retained for the franchise some measure of control over the franchisee, or at least those desiring to someday own the rights to another store.[17]

Kroc became frustrated with the McDonald brothers' desire to maintain a small number of restaurants. The brothers also consistently told Kroc he could not make changes to things such as the original blueprint, but despite Kroc's pleas, the brothers never sent any formal letters that legally allowed the changes in the chain. In 1961, he bought the company for $2.7 million, calculated so as to ensure each brother received $1 million after taxes. Obtaining the funds for the buyout was difficult due to existing debt from expansion. However, Harry Sonneborn, whom Kroc referred to as his "financial wizard", was able to raise the required funds.[18]

At the closing, Kroc became annoyed that the brothers would not transfer to him the real estate and rights to the original San Bernardino location. The brothers had told Kroc they were giving the operation, property and all, to the founding employees. In his anger, Kroc later opened a new McDonald's restaurant near the original McDonald's, which had been renamed the Big M because the brothers had neglected to retain rights to the name. The Big M later closed.[19] It is alleged that as part of the buyout Kroc promised, based on a handshake agreement, to continue the annual 1% royalty of the original agreement, but there is no evidence of this beyond a claim by a nephew of the McDonald brothers. Neither of the brothers publicly expressed disappointment over the deal. Speaking to someone about the buyout, Richard McDonald reportedly said that he had no regrets.[20]

Kroc maintained the assembly line "Speedee Service System" for hamburger preparation that was introduced by the McDonald brothers in 1948. He standardized operations, ensuring every burger would taste the same in every restaurant. He set strict rules for franchisees on how the food was to be made, portion sizes, cooking methods and times, and packaging. Kroc also rejected cost-cutting measures like using soybean filler in the hamburger patties. These strict rules also were applied to customer service standards with such mandates that money be refunded to clients whose orders were not correct or to customers who had to wait more than five minutes for their food.

By the time of Kroc's death in 1984, McDonald's had 7,500 outlets in the United States and in 31 other countries and territories.[21] The total system-wide sales of its restaurants were more than $8 billion in 1983, and his personal fortune amounted to some $600 million.[4]

Baseball

[edit]

Kroc retired from running McDonald's in 1973. While he was looking for new challenges, he decided to return to baseball, which was his lifelong favorite sport. One day, while sitting in his yacht in Fort Lauderdale, Florida, he read in the newspaper that the San Diego Padres were for sale.[22] The team had been conditionally sold to Joseph Danzansky, a Washington, D.C. grocery-chain owner, who planned to move the Padres to Washington.[23] However, the sale was tied up in lawsuits when Kroc purchased the team for $12 million, keeping the team in San Diego.[24][25] In Kroc's first year of ownership in 1974, the Padres lost 102 games yet drew over one million in attendance, the standard of box office success in the major leagues during that era. Their previous highest attendance figure was 644,772 in 1972.[24] The San Diego Union said Kroc was "above all, a fan of his team".[25]

On April 9, 1974, while the Padres were on the brink of losing a 9–5 decision to the Houston Astros in the season opener at San Diego Stadium, Kroc took the public address microphone in front of 39,083 fans. "I've never seen such stupid ballplaying in my life," he said. The crowd cheered in approval.[25][26] In 1979, Kroc's public interest in future free agent players Graig Nettles and Joe Morgan drew a $100,000 fine from Commissioner Bowie Kuhn. Frustrated with the team, he handed over operations of the team to his stepson-in-law, Ballard Smith.[27][28] "There's more future in hamburgers than baseball," Kroc said.[28]

After his death, the Padres in 1984 wore a special patch with Kroc's initials: RAK.[29] They won the NL pennant that year against his hometown team Chicago Cubs and played in the 1984 World Series, which they lost to the Detroit Tigers. Kroc was inducted posthumously as part of the inaugural class of the San Diego Padres Hall of Fame in 1999.[30]

Personal life

[edit]

The Kroc Foundation supported research, treatment and education about various medical conditions, such as alcoholism, diabetes, arthritis and multiple sclerosis. It is best known for establishing the Ronald McDonald House, a nonprofit organization that provides free housing for parents close to medical facilities where their children are receiving treatment.[4][31]

In 1973, Kroc received the Golden Plate Award of the American Academy of Achievement.[32]

A lifelong Republican, Kroc believed firmly in self-reliance and staunchly opposed government welfare and the New Deal. Kroc donated $255,000 to Richard Nixon's reelection campaign in 1972, and he was controversially accused by some, notably Senator Harrison Williams, of making the donation to influence Nixon to veto a minimum wage bill making its way through Congress.[33]

Kroc's first two marriages to Ethel Fleming (1922–1961) and Jane Dobbins Green (1963–1968) ended in divorce.[31] Kroc and Fleming met in 1919, married in 1922, and then moved to Chicago, Illinois. Their daughter Marilyn was born in 1924.[34] His third wife, Joan Kroc, was a philanthropist who significantly increased her charitable contributions after Kroc's death. She donated to a variety of causes that interested her, such as the promotion of peace and preventing nuclear proliferation.[31] Upon her death in 2003, her remaining $2.7 billion estate was distributed among a number of nonprofit organizations, including $1.5 billion donation to The Salvation Army to build 26 Kroc Centers, along with a $200 million donation to National Public Radio as she believed deeply in the power of public radio.[2][35] In addition to that, she also donated to community centers serving socially deprived neighborhoods throughout the country.[36]

In 1980, following a stroke, Kroc entered an alcohol rehabilitation facility.[37] He died four years later of heart failure at a hospital in San Diego on January 14, 1984, at the age of 81.[4] He was buried at the El Camino Memorial Park in Sorrento Valley, San Diego.[11]

[edit]

Kroc's acquisition of the McDonald's franchise as well as his "Kroc-style" business tactics are the subject of Mark Knopfler's 2004 song "Boom, Like That".[38][39]

Kroc co-authored the book Grinding It Out, first published in 1977 and reissued in 2016; it served as the basis for a biographical movie about Kroc.[40]

Michael Keaton portrayed Kroc in the 2016 John Lee Hancock film The Founder. The film's depiction of Kroc's franchise development, nationwide expansion, and ultimate acquisition of McDonald's, offered a critical view of his treatment of the founding McDonald brothers.[41]

Kroc is featured in the documentary series The Food That Built America on the History channel.[42]

Kroc is featured in Tim Harford's BBC World Service radio show 50 Things That Made the Modern Economy in the episode, "Fast food franchise", which depicts the boom that his franchisee model provided for the fast food industry.[43]

Kroc was critical of workers sitting or leaning while at work. In the 1960s, Kroc used the catchphrase "If you’ve got time to lean, you’ve got time to clean."[44] According to Jacobin writer Alex N. Press, the catchphrase has become popular with managers.[45]

See also

[edit]

References

[edit]
  1. ^ "Ray Kroc" (Fee, via Fairfax County Public Library). Newsmakers. Biography In Context. Detroit Michigan: Gale. 1985. Gale Document Number: GALE|K1618001946. Retrieved June 12, 2011.
  2. ^ a b Cicarelli, James (2003). "Ray Kroc" (Fee, via Fairfax County Public Library). In Arnold Markoe; Kenneth T. Jackson (eds.). Scribner Encyclopedia of American Lives, Thematic Series: Sports Figures. New York: Charles Scribner's Sons. Retrieved June 12, 2011. Gale Biography In Context.
  3. ^ Anderson, Robert (March 2009). "Ray Kroc How He Made McDonald's Sizzle". Success. Archived from the original on May 31, 2011. Retrieved June 13, 2011. (excerpt from September 1977 article)
  4. ^ a b c d Pace, Eric (January 15, 1984). "Ray A. Kroc dies at 81. Built McDonald's Chain". The New York Times. Archived from the original on November 8, 2017. Retrieved January 13, 2020.
  5. ^ a b "The Mc Donald's Man: What Ray Kroc Hath Wrought Around the World". People. May 19, 1975. Archived from the original on March 30, 2016. Retrieved November 9, 2013.
  6. ^ "Gale - Product Login".
  7. ^ "7 Jan 1959, 40 - Chicago Tribune at Newspapers.com". Newspapers.com. Retrieved March 21, 2020.
  8. ^ "Stupno 17 | Porta fontium". www.portafontium.eu. Retrieved March 21, 2020.
  9. ^ "DigiArchiv of SRA Trebon - ver. 20.03.13". digi.ceskearchivy.cz. Retrieved March 21, 2020.
  10. ^ "DigiArchiv of SRA Trebon - ver. 20.03.13". digi.ceskearchivy.cz. Retrieved March 21, 2020.
  11. ^ a b Lisa Napoli (2016). Ray and Joan: The Man Who Made the Mcdonald's Fortune and the Woman Who Gave It All Away. p. 28.
  12. ^ Kroc, Ray; Anderson, Robert (1987). Grinding it out: the making of McDonald's (St. Martin's paperback ed.). [New York]: St. Martin's Paperbacks. p. 19. ISBN 978-0-312-92987-9.
  13. ^ Encyclopaedia Britannica, Inc. (October 1, 2008). Britannica Guide to 100 Most Influential Americans. Encyclopaedia Britannica, Inc. p. 342. ISBN 978-1-59339-857-6.
  14. ^ Neil Snyder (June 15, 2010). Vision, Values, and Courage: Leadership for Quality Management. New York City: Simon and Schuster. p. 133. ISBN 978-1-4516-0252-4.
  15. ^ "Our History: Ray Kroc & The McDonald's Brothers". McDonald's. Retrieved September 12, 2021.
  16. ^ Schlosser, Eric (2002). Fast Food Nation: The Dark Side of the All-American Meal. New York City: Harper Collins Publishers. ISBN 978-0-395-97789-7.
  17. ^ Love, John (1995). McDonald's: Behind The Arches. New York: Bantam Books. pp. 57–60. ISBN 978-0-553-34759-3.
  18. ^ "Ray Kroc". Entrepreneur. October 9, 2008. Retrieved May 29, 2019.
  19. ^ Kroc (1977). Grinding It Out. H. Regnery. p. 123. ISBN 978-0-8092-8259-3.
  20. ^ Gilpin, Kenneth N. (July 16, 1998). "Richard McDonald, 89, Fast-Food Revolutionary". The New York Times. ISSN 0362-4331. Retrieved October 21, 2017.
  21. ^ "Ray Kroc | American businessman". Encyclopedia Britannica. Retrieved May 29, 2019.
  22. ^ Castrovince, Anthony (December 20, 2021). "How the Padres nearly moved to D.C." MLB.com. MLB Advanced Media. Retrieved August 16, 2024.
  23. ^ Chandler, Bob (2006). Bob Chandler's Tales from the San Diego Padres. Champaign, IL: Sports Pub. p. 71. ISBN 978-1-59670-024-6. Retrieved February 10, 2015.
  24. ^ a b Chandler 2006, p. 73.
  25. ^ a b c Lockwood, Wayne (October 2, 1984). "Ray Kroc's dream finally materializes". The San Diego Union. p. Baseball-12.
  26. ^ Chandler 2006, pp. 74–76.
  27. ^ "All in family". The Herald-News. AP. September 25, 1976. p. A-14. Retrieved September 21, 2024 – via Newspapers.com.
  28. ^ a b Bock, Hal (August 27, 1979). "Miller Presaged Kroc Escapade". Lawrence Journal-World. Associated Press. p. 14. Retrieved February 10, 2015.
  29. ^ "Ray Kroc, San Diego Padres Owner and Man who Built McDonald's". Misc. Baseball. March 2, 2010.
  30. ^ "Padres Hall of Fame". padres.mlb.com. Archived from the original on August 16, 2014.
  31. ^ a b c Pompilio, Natalie (October 12, 2013). "Joan Kroc, Unconventional Philanthropist". Legacy.com. Retrieved January 11, 2018.
  32. ^ "Golden Plate Awardees of the American Academy of Achievement". www.achievement.org. American Academy of Achievement.
  33. ^ Novak, Ralph (May 19, 1975). "The McDonald's Man: What Ray Kroc Hath Wrought Around the World". People. Retrieved July 18, 2017.
  34. ^ Mattern, Joanne (2015). Ray Kroc: McDonald's Restaurants Builder. Minneapolis, Minnesota: Abdo Publishing. p. 7. ISBN 978-1-62968-890-9.
  35. ^ "Kroc Leaves NPR Record Gift". NPR. Retrieved November 6, 2020.
  36. ^ Sullivan, Paul (January 20, 2017). "Kroc's Giving, Like McDonald's Meals, Was Fast and Super-Sized". The New York Times. Retrieved January 11, 2018.
  37. ^ Harris, Scott (October 13, 1985). "Dismayed by Nuclear Arms Race : McDonald's Fortune Fuels Joan Kroc's Peace Effort". Los Angeles Times. Retrieved January 24, 2017.
  38. ^ The Bulletin. J. Haynes and J.F. Archibald. 2004.
  39. ^ Franchise Times. Restaurant Finance Corporation. 2005.
  40. ^ Taunton, Paul (August 11, 2016). "Head honcho Ray Kroc was a bully, and other things we learned from Grinding It Out: The Making of McDonald's". National Post.
  41. ^ Lapin, Andrew (January 19, 2017). "'The Founder': Michael Keaton Brings A Ruthless Ray Kroc To Life, With Relish". NPR. NPR. Retrieved January 25, 2017.
  42. ^ "The Food That Built America Podcast". History. 2020. Retrieved April 26, 2021.
  43. ^ "Fast food franchise". BBC News. Retrieved December 23, 2020.
  44. ^ "'Not for employee use': why are US retail workers being denied chairs?". The Guardian. Retrieved November 2, 2024.
  45. ^ "Stop Forcing Workers to Stand on the Job". Jacobin. Retrieved November 2, 2024.

Further reading

[edit]
[edit]
Business positions
Preceded by CEO of McDonald's
1967–1973 		Succeeded by
Retrieved from "https://en.wikipedia.org/w/index.php?title=Ray_Kroc&oldid=1255317756"