Raymond Albert Kroc / 1902–1984 / Illinois, USA / Businessman, CEO of McDonald’s
Business Philosophy
Luck is the dividend of sweat. The more you sweat, the luckier you get.
Widely cited; however, attribution unconfirmed.
Look after the customer and the business will take care of itself.
Widely cited; however, attribution unconfirmed.
“Opportunity is dead in the United States!” “The tax structure has destroyed all incentive!” How often we have heard such laments during the past thirty years, when in fact greater fortunes have been made and higher living standards achieved than ever before on earth!
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
If a corporation has two executives who think alike, one of them is unnecessary.
Reported by John F. Love in McDonald’s: Behind the Arches (1986).
. . . the basics have to be stressed over and over. If I had a brick for every time I’ve repeated the phrase QSC and V (Quality, Service, Cleanliness, and Value), I think I’d probably be able to bridge the Atlantic Ocean with them. And the operators need the stress on fundamentals as much as their managers and crews. This is especially true of a new location.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
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.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
Kroc on Kroc
Another piece of paper discovered among my father’s effects was a yellowed document dated 1906. It was a phrenologist’s report of a reading he had done on the bumps of the head of Raymond A. Kroc, aged four. He had predicted that I would become a chef or work in some branch of food service. I was amazed at the prognostication; after all I was in a food service–related business and felt a real affinity for kitchens. Little did I know how much more accurate that old boy’s prophesy would eventually prove to be.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
I sold a Multimixer to a guy named Willard Marriott, who had just opened a drive-in called A&W Root Beer. His method of operation fascinated me. I considered myself a connoisseur of kitchens; after all, selling Multimixers took me into thousands of them. I prided myself on being able to tell which operations would appeal to the public and which would fail. Willard Marriott looked like a winner to me from the start. I had no more idea than he did back then, though, of what a giant his Marriott Corporation would become in hotels and restaurants.”
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
There was a lot of nervous tension at that time on all levels of society over the alarming developments in Europe and Asia. Magazines speculated grimly on whether war with Japan was inevitable. Then our attention was diverted from Japanese aggression in China to the Nazi conquests in Europe. On December 7, 1941, we were thrown into war by the Japanese sneak attack on Pearl Harbor, and I was thrown out of the Multimixer business. Supplies of copper, used in winding the motors for Multimixer, were restricted by the war effort.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
We started Franchise Realty Corporation with $1,000 paid-in capital, and Harry [Sonneborn] parlayed that cash investment into something like $170 million worth of real estate. His idea, simply put, was that we would 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 the early days it was a bank) and arrange a first mortgage on the building; the landlord would subordinate his land to the building. I must admit that I was a bit skeptical.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
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 plus a profit.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
[Kroc’s first wife] 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.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
[Ethel] 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.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
I was about to lose one of my biggest accounts, Walgreens, the people I had created a tremendous amount of business for and to whom I was selling five million cups a year. Fred Stoll told me in strictest confidence that a former Walgreen executive who had a lot of pull in the top offices of the company had gone into the paper cup business with a competitor of mine, and he was going to be given all of the Walgreen trade. The rationale would be that this competitor was selling for five percent under my price. I explained this to John Clark and tried to get him to go along with offering Walgreens a price break—after all, they paid their bills on time and there was promotion value in having a big company like that use your product. But all I got was a tongue lashing.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
The best part of it for me personally was that every time I saw a new Walgreen’s store going up it meant new business. This sort of multiplication was clearly the way to go. I spent less and less time chasing pushcart vendors around the West Side and more time cultivating large accounts where big turnover would automatically winch in sales in the thousands and hundreds of thousands.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
There is an old saying that all work and no play makes Jack a dull boy. I never believed it because, for me, work was play. I got as much pleasure out of it as I did from playing baseball.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
McDonald’s
This historic year of 1976 will see McDonald’s Corporation surpass one billion dollars in total revenue for the first time. Casual students of business history may not realize the significance of the fact that this milestone will be reached during the twenty-second year of the company’s history.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
[Kroc’s friend] 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.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
[Richard and Maurice McDonald] 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. . . . 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.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
Cooking with gas was a popular expression at the time, but it was an in-joke with us. When somebody was cooking with gas around our place it meant that he was really doing everything right. This stemmed from our experience in patterning our stores on the plans provided by the McDonald brothers. Jim Schindler insisted on using gas units for making French fries instead of the electric friers the McDonald boys were using. Gas proved to be more efficient for this purpose. It was cheaper, and we got a better product. So we tried to “cook with gas” in all our operations at McDonald’s.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
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.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
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.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
. . . 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.”
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
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.”
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
One day I said, “Mac, the only way in this world that you can increase your soda fountain volume is to sell to people who don’t take up a stool. Look, I’ll tell you what I’m gonna do. I will give you 200 or 300 containers with covers, however many you need to try this for a month in your store down the street. Now most of your takeout customers will be Walgreen employees from headquarters here, and you can conduct your own marketing survey on them and see how they like it. You get the cups free, so it’s not going to cost you anything to try it.” Finally he agreed. I brought him the cups, and we set the thing up at one end of the soda fountain. It was a big success from the first day. It wasn’t long before McNamarra was more excited about the idea of takeouts than I was.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
Personal Philosophy
There are things money can’t buy and hard work can’t win. One of them is happiness.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
Work is the meat in the hamburger of life.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).
I have always believed that each man makes his own happiness and is responsible for his own problems.
Ray Kroc, Grinding It Out: The Making of McDonald’s (1977).