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Five branding lessons Ray Kroc teaches us about creating McDonald’s Corp

shahidmansuri

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brand.jpg

 Contrary to popular belief, McDonalds Corporations wasn’t founded by somebody named McDonald, rather it was founded by a guy who did not have an ‘M’ anywhere in his name.

Richard and Maurice McDonald, the namesake behind McDonald’s chain of restaurants, are credited to the invention of a revolutionary kitchen management system called “speedy-service system” and creation the “Golden Arches” that still defines the brand today.

However, a nice emblem and an invention, no matter how revolutionary, doesn’t make for a brand. Creating a brand requires a lot more persistence than most designers and investors can deliver. It takes the zeal and perseverance of Ray Kroc, a milkshake maker salesman, who knew what the brand is capable of the first time he encountered it.

What your brand is called, matters

“It feels so good to pronounce it, it must be serving the best burger in the town” is what people think whenever the name McDonald’s resounds in their head.

I mean Kroc knew how McDonald’s operates, their kitchen assembly lines, their recipes, and everything in between. He could have easily imitated the model under a new brand and would be a success anyway. But he did not. He couldn’t come up with a name that sounded to him better than McDonald’s did. Kroc’s was, obviously, out of question for a restaurant.

Concisely, it was the name that touched him when he first heard one of the brothers saying it. He was delivering an order of milkshake makers the brothers and immediately fell in love with the name. He left his job and stroke a deal to be their agent. The rest is history.

Persistence is the key, you just can’t lose

McDonald’s is not an overnight success story that many make us believe. Kroc mortgaged his home to pay the debts when every bank manager in the city refused him a loan. But that did not stop. In fact, it made him enter the business of real estate. He started a real estate company that was outside purview of his contract with the brother.

Former McDonald’s CFO, Harry J. Sonneborn, is even quoted as saying, “we are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they are the greatest producer of revenue, from which our tenants can pay us our rent.”

You can’t make it alone, watch your back though

When the McDonald brothers finally agreed to franchise the fast food joint, it was natural of Ray to persuade his wealthy friends to invest in. But that did not turn out quite that well. Being filthy rich, they weren’t quite interested in day-to-day management of the joint until and unless they were making money.

This ignorance led many McDonald’s in a state of utter chaos. Some were even selling fried chicken, and wraps against the franchise agreement.

Kroc soon realized that he need franchisees that actually need the money McDonalds is willing to make them earn. So he started giving loans to hardworking people who have a family to raise, would take franchising McDonald’s as an opportunity of a life time and would be more obliging towards the agreement terms.

Quantity makes money; Quality makes brand

When Kroc opened the first franchisee under McDonald’s Corporation in Illinois, he made sure the fast food delivery system isn’t hampering with the quality of food being delivered.

However, he can’t be there at every store checking their quality. So, he created a cookbook that every franchisee must abide to. The cookbook included precisely, step-by-step how to prepare the servings in minimum time without deviating from its taste.

He fixed the suppliers in each region so that the taste remains consistent everywhere. He made surprise visit to joints around the country and penalized whosoever was in disregard.

He created the supply chain solution of the future

Expansion is not a form of deviation, stick to the vision

No matter where you’re, Detroit or London, Shanghai or Tokyo, McDonald’s looks the same, works the same, tastes the same and serves the same.

It was Ray Kroc’s idea of brands and to this day not only McDonalds but most franchisees around stick to this model. All KFCs, Burger Kings, or Subways around the world are actually a part of a legacy created by the founder “Ray Kroc”.

Had it not for him, McDonalds wouldn’t have been an international phenomenon it is today, but a group of a small-time fast food restaurants confined to a few American states. You may hate him or love him, but it is him who made McDonald’s the most sought-after burger joint in the world.



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