After noticing the unusually large orders from the McDonald brothers’ restaurant, Ray Kroc, a salesman for Multimixer milkshake machines, took a trip to San Bernardino. Struck by the restaurant’s efficiency, Kroc persuaded the brothers to appoint him their franchising agent.
''I had to see what kind of an operation was making 40 [milkshakes] at one time. Whatever it was, I saw it in the McDonald operation, and in that moment, I suppose, I became an entrepreneur. I decided to go for broke.'' ~ Ray Kroc, from What's an Entrepeneur, 1979
Ray Kroc Demonstrates the Multi-Mixer at the National Restaurant Association Show, 1951, Courtesy to the McDonald's in Downey, California
Their contract allowed Kroc to keep the $950 franchise fee and receive 1.4% of franchisee sales, while the brothers collected 0.5%. Despite strong sales, Kroc struggled financially as his 1.4% royalty barely covered costs for property and operating expenses.
"Because franchisees kicked back such a meager percentage of total sales—just 1.9 percent—the corporate parent made very little money. This arrangement was far more favorable to the McDonalds’ than to Kroc, for that small slice of revenues would have to account for Kroc’s overhead and marketing costs—and profits."
~ Daniel Gross, Financial Journalist and Author, from Forbes Greatest Business Stories of All Time, 1996
Harry Sonneborn, Kroc’s advisor, suggested that McDonald’s turn to real estate to address its perils. ​​​​​​​
Student-conducted interview with Tom Maraist, former real-estate training manager at Hamburger University, March 2, 2026
By purchasing the land under each restaurant and renting it to franchisees, McDonald’s received the $950 franchise fee, 1.9% of all sales, and a monthly rent payment.
Student-conducted interview with Tom Maraist, former real-estate training manager at Hamburger University, March 2, 2026
McDonald's restaurant, original crew in front of first corporate store in Des Plaines Illinois, McDonald's Corp., 1955, Courtesy of the Everett Collection
The lease agreements gave Kroc the authority to remove franchisees who failed to meet the company’s strict standards. ​​​​​​​
"If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean.." ~ Ray Kroc, from Grinding It Out: The Making of McDonald's, 1977
Managed by the Franchise Realty Corporation, a subsidiary of McDonald’s, this strategy ensured Kroc had the finances to expand rapidly.
As McDonald’s flourished, tensions grew between Kroc and the McDonald’s brothers, who resisted expansion and were perfectly satisfied with their existing operation and income.
"But they did not want to do more of it, and Mac [Maurcie McDonald] explained why: "We sit out on the porch in the evenings and watch the sunset. It's peaceful." Opening more branches would be a headache - travelling around, finding locations, vetting managers, staying in motels. Why bother? They were already making more money than they could spend. This made no sense to Kroc. "His approach was utterly foreign to my thinking," he later recalled."
~ Tim Harford, British journalist, economist, and broadcaster, from How McDonald's revolutionised business, 2020
During a verbal negotiation in 1961, Kroc manipulated the brothers to sell him the company and the McDonald's name for $2.7 million. However, the perpetual royalty he promised them was never put in writing.
"When Ray finally puts the squeeze on the brothers who started the whole business and forces them to sell out to him, he asks as a personal favor that they not put in writing his promise to provide them with lifelong royalties.The royalties involved would’ve given the brothers over $100 million a year. Ray Kroc didn’t keep his word..."
~ Rabbi Benjamin Blech, Professor at Yeshiva University, from McDonald’s Disturbing Morality Tale, N.D.
Kroc, frustrated that he couldn’t own the brothers' original San Bernardino restaurant, forced them to rename it“The Big M” and opened a McDonald’s across the street to drive them out of business. ​​​​​​​
Original Arch Converted to Big M, 1961, Courtesy of McDonald's Museum in in San Bernardino.
Under Kroc’s leadership, McDonald’s skyrocketed to a global chain and became everybody's "Happy Place".
McDonald's Hamburgers - "Our Kind of Place" (Commercial, 1967), McDonald's Corp., Courtesy to the The Museum of Classic Chicago Television
McDonald Brothers Franchised Brochure, McDonald's Corp., circa. 1952, Courtesy of the McDonald's Corporation.
Newspaper advertisement announcing the opening of Ray Kroc’s first McDonald’s., McDonald's Corp., 1955, Courtesy of the McDonald's Corporation
Customers at a the first McDonald's restaurant opened by Ray Kroc in Des Plaines Illinois, McDonald's Corp., April 15, 1955, Courtesy of the Everett Collection
McDonald’s remained true to its hamburger-and-fries menu while also embracing local flavors, offering items such as the Samurai Mac in Japan. This “localization” became a model for other fast‑food chains.
Menu Poster at a McDonald's in Chiyoda, Japan, Owen Yin, December 27, 2025
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Advertisement Stand at a McDonald's in Canada, Niki Rabo, January 5, 2026
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Menu Poster at a Wendy's in Osaka, Japan, Owen Yin, December 27, 2025
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Menu Stand at a McDonald's in Osaka, Japan, Owen Yin, December 28, 2025
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Fred Turner, later CEO, formalized operations and established Hamburger University, which trained franchisees to meet the chain’s exacting standards: cooking times, portions, cleanliness, and field inspections.
"McDonald's opened a full-time training centre, "Hamburger University", which drilled students in subjects such as which kind of potatoes to buy. Inspectors wrote 27-page reports on whether franchisees cooked food at the right temperatures and kept the bathrooms clean."
~ Tim Harford, British journalist, economist, and broadcaster, from How McDonald's revolutionised business, 2020
Student-conducted interview with Tom Maraist, former real-estate training manager at Hamburger University, March 2, 2026
Fred Turner and Ray Kroc the executive leaders of McDonald’s Corporation looking at blueprints of future restaurants, McDonald's Corp., circa 1975, Courtesy of the Everett Collection.
Kroc manipulated McDonald’s history, publicly taking credit for its creation while ignoring the contributions of the McDonald brothers.
"...he [Ray Kroc] held himself out to be the creator of McDonald's...he conveniently ignored the fact that the McDonald's brothers existed...The McDonald's brothers and other family members were not happy about how Kroc had rewritten history...He even went as far as to put his name on McDonald's placemats and make sure his image was in every store on a plaque."
~ Amy Bell, Professional Food Writer, from The Trials And Tribulations Of The McDonalds Brothers, 2025
