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- Ray Kroc and the Fast Food Industry :: fast food industry
Apercu : No use may be made of this material without the express written consent of the copyright holder. California, and envisioned a massive new industry: fast food. American restaurant industry by imposing discipline on the production of hamburgers, french fries, and milk shakes. Kroc had created one of the most compelling brands of all time. But he was barely turning a profit. Corporation, buying up tracts of land and acting as a landlord to eager franchisees. Kroc maintained a delicate balancing act, imposing rigorous system-wide standards while encouraging an entrepreneurial spirit that welcomed ideas from all levels. Kroc showed the world how to apply sophisticated process management to the most prosaic endeavors. To the degree that such operations maintain quality control, and cherish customer satisfaction, profits may flow. Kroc routinely paid visits to clients. California to meet two of his biggest clients, the result was anything but routine. Kroc was curious to see what kind of operation needed the capacity to churn forty milk shakes at one time. Bernardino, and what he saw there changed his life. Kroc had come across, this joint hummed like a finely a tuned engine. In short, the brothers brought efficiency to a slap-dash business. They offered a nine-item menu -- burgers, french fries, shakes, and pies -- eliminated seating, and used paper and plastic utensils instead of glass and china. They had also devised the rudiments of a hamburger assembly line so they could deliver orders in less than sixty seconds. And the prices were remarkably low: fifteen-cent burgers and ten-cent fries. Kroc instantly knew he had seen the future. Kroc had seen his destiny. Kroc had an intuitive feel for the restaurant business. He also possessed a more practical working knowledge of the industry, having spent the past thirty years selling paper products and milk-shake machines to restaurants all over the nation. Kroc concluded that too many of his clients were hamstrung by haphazard, unscientific management. Kroc took to offering unsolicited advice on how they could improve their businesses. So the next day, he offered them a proposition. Sacramento for very little money, and had reaped no great benefits. At root, they were indifferent businessmen, satisfied with the $100,000 they earned annually and unwilling to invest the energy to build a chain. Kroc was a veteran salesman with more that thirty years of experience. In exchange, he would keep 1. Because franchisees kicked back such a meager percentage of total sales -- just 1. But it was the act of a desperate man. Illinois, would vanish if this venture failed. April 15, 1955, the store rang up a respectable $366. Kroc watched over the store with the vigilance of a new mother, personally overseeing the kitchen and scraping gum off the parking lot with putty knife. Kroc knew that he had to impose discipline on the loosely run restaurant industry. And that meant refining standardized operating procedures into easily replicable processes. Ford had realized that the mass production of automobiles required the marriage of precision parts to an efficient assembly process. Kroc endowed his beef patties with exacting specifications -- fat content: below 19 percent; weight: 1. Chicago to devise a method for making the perfect fried potato in the late 1950s. Darwinian proposition, in which those least fit and adaptable would go the way of the dinosaur. It closed the door between us. The thirty-nine-year marriage would finally end in divorce in 1961. Kroc and his rivals was one of world view. He saw franchisees as business partners, not as mere customers. Multimixer, he had observed the way franchisers milked franchisees for profits without concern for their long-term viability. Kroc vowed not to fall into that lucrative but ultimately unproductive trap. His success would insure my success. Kroc wanted to sell his new partners an operating system. In other words, he branded a service. Nevada could serve burgers of the exact same size and quality, each containing the same number of pickle slices and topped with the same-size dollops of mustard and ketchup, each arrayed on similar tray alongside potatoes deep-fried for the exact same length of time. Everything else was secondary for me. But the exacting demands served a strategic goal. Kroc hired as a dollar-an-hour burger flipper in 1955. Kroc, who had only a daughter. Kroc to early franchisees, it also set his fledgling enterprise on a direct course to insolvency. Kroc paid them by granting them 30 percent of the company. Kroc needed to raise a huge chunk of money -- $2. His relationship with them was a continuing source of irritation. Kroc realized the value of product identification created by the more than 200 outlets bearing their name. York money manager arranged a $2. Kroc faced a classic dilemma. Sonneborn came up with a solution. As sales and prices inevitably rose over the years, the company would collect more and more rent as its costs remained virtually constant. Corporation, to execute the new strategy. In this pre-strip-mall era, real estate along well-traveled byways was both cheap and plentiful. Kroc sold only individual franchises, for a low fee of $950. This insured that operators unwillingly to play by his rules could open no more than one outlet. Kroc could compose legal documents guaranteeing further control. Kroc set about expanding and professionalizing the growing industrial empire. Under his novel conception, each franchisee and operator was like a plant manager. Kroc dictated the size and shape of burgers, he gave franchisees wide latitude in other areas. Nowhere was the dichotomy between central control and operating autonomy more evident than in advertising. Kroc encouraged operators to take to the air-waves with their own campaigns. Scott, to create a new clown persona for local ads. Successful advertising helped spur even greater growth. Plaines store, selling 300,000 shares priced at $22. Each chain, fortified by cash infusions, expanded rapidly in the late 1960s, so much so that by 1970, fast food had grown to a $6. In such an environment, standing still was tantamount to shrinking. Kroc expended capital to forge a uniform image. Grimace, a large purple creature who craved shakes and french fries. Kroc backed up the advertising blitzkrieg with several new products, many of which were created by franchisees. Central, as the headquarters came to be known. Kroc, became a figure of national stature. Unlike so many other newly rich captains of industry, he developed no taste for great art or society events. Instead, he continued to find beauty in the simple bun. Yet, is it any more unusual to find grace in the texture and softly curved silhouette of a bun than to reflect lovingly on the hackles of a favorite fishing fly? American diet, it aroused the snobbery of the food industry elite. Something is wrong with our economy when the stock market is long on hamburgers and short on steel. States and a huge quantity of potatoes besides. Americans with a point of entry into the workplace. And the mounting billions were monitored in the highest offices in the land. What is it now, eight or nine billion? Kroc believed the company needed to continue to expand in order to survive. Arches would stand as outposts of a mighty commercial empire. Kroc embarked upon an ambitious campaign. European capitals was just the beginning. Over the course of the decade, the thousand stores that the company opened overseas fueled its 27 percent annual growth rate. American product, while simultaneously catering to local tastes. Central also allowed local operators to devise unique promotional campaigns. No use may be made of this material without the express written consent of the copyright holder.
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