Entrepreneur starts company. Business booms. Founder gets kicked out of his own company. It's not uncommon for entrepreneurs to lose control of their own businesses--as highlighted in the new movie The Founder.
Released nationwide Friday, the film starring Michael Keaton as Ray Kroc, delves into the surprisingly less-known story of McDonald's humble origins as a family-run business and its transition into the mega corporation it is today.
As depicted in the film, brothers Richard and Maurice McDonald move to California in hopes of making it in Hollywood, but instead find success in a food stand serving burgers, fries and milkshakes. Implementing their own version of Henry Ford's assembly line, the brothers served high volumes quickly and for a low price. The duo drew interest from milkshake machine salesman Ray Kroc, who was surprised by their high-dollar purchase of eight mixers, which was a big sale in those days.
Seeing the potential for more locations, Kroc made a deal with the brothers and opened his own franchise McDonald's in Des Plaines, Illinois in 1955. That one franchise became three, and within three years, McDonald's had sold 100 million hamburgers, according to the company's lore. Now the conglomerate serves up burgers in more than 36,000 locations worldwide from Des Plaines to Tokyo.
Trouble quickly surfaces when Kroc's quest to cut corners and grow clashes with the McDonalds brothers' desire for quality. The salesman tires of the brothers' reluctance to embrace progress, or what they view as "crass commercialism." Progress won.
In 1961, Kroc bought the brothers out for $2.7 million. The McDonalds held onto their original California location, which was renamed, but was eventually shuttered when Kroc opened up a McDonald's in the same neighborhood.
Even if you're sympathetic of the McDonalds brothers, you have to admire Kroc and his ability to grow the company into the fast-food powerhouse it is today. For entrepreneurs, watching The Founder the lessons are clear: be careful who you go into business with, and whatever you do, don't resist change.