This is the first draft of a short text I am writing about an underappreciated corporation: McDonald's. One can look at McDonald's as company that sells fast food - but I want to cast some light on their role as a franchiser. McDonald's is a company that has helped other people make money before they did.
I welcome comments and especially criticism. The current version is only a rough draft - but I want to try releasing early and often as a writing technique. Just stop reading if it gets too horrible for you. Here it comes:
Build it and they will come - a historic case study
> McDonald's gave away an operating system first, and figured out how
to make money second
Do you know what McDonald's sells? It's not Hamburgers. It's an
operating system. A very succesful operating system that turns eager
newcomers into operators running their own fast food restaurant.
[More about the operating system. stats]
The McDonald brothers did not invent fast food back in the [40ies?].
But they found a way to efficiently run a fast food restaurant. Much
like Henry Ford - who did not invent the automobile, but a way to
produce cars cheap and of uniform quality.
[Who is this Ray Croc guy?]
What Ray Croc did was to buy the franchise rights for the system from
the McDonald brothers. The brothers thought he wanted to lease [?]
the name and give a few pamphlets to franchise takers. That's why the
original contract stipulated ridicilously [?] low [Anteil] of the
sales of a franchisee going to Croc's company. [details!]
["Using every ounce of persuasion he could muster, he finally
convinced the brothers to cut a deal: Kroc would sell McDonald's
franchises for the low price of $950. In exchange, he would keep 1.4
percent of all sales and funnel 0.5 percent back to the
brothers. Because franchisees kicked back such a meager percentage of
total sales -- just 1.9 percent -- the corporate parent made very
little money." http://www.wiley.com/legacy/products/subject/business/forbes/kroc.html]
["The crucial difference between Kroc and his rivals was one of world
view. He saw franchisees as business partners, not as mere
customers. In his travels selling the 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."]
Croc had been a salesman for a long time before he essentially founded
McDonald's [the franchising company]. He sold paper cups [source].
One of his strategies to increase sales was to search for ways his
customers --- [shops] --- could sell more beverages. Help them make
money to help you make money.
With McDonald's it was the same. He almost could have used the motto
[?] `Don't be evil.' He religiously separated suppliers, [his
franchising company] and the individual restaurants. [source?] Almost
all other franchisers [?] required franchisees to [beziehen] at least
one key component from them. Usually overpriced. That was their way
to make money.
Croc wanted to avoid such conflicts of interest. [Explain.] Thus
while McDonald's suggested and certified suppliers - they did not take
a part in their sales. [ausdruck!] They only moderated the relation
between suppliers and franchisees.
Ray Croc was out to build an empire - not to turn a quick profit.
Thus he required strict standards, but did not actually take in any
substantial amount of money. The franchisees made more money - and
much earlier - than his company.
McDonald's hab built it and the franchisees came and loved it. By
[1970?] McDondald's was virtually broke. [sold a lot of equity for
credit] Today they are a huge and thriving company. So you know they
found a way to make money. Their approach grew out of another attempt
to help their franchisees: Real estate.
Croc learned early that the best operators - that is franchisees - are
not wealthy people with a background in gastronomy. They knew too
much about the normal way to run a restaurant and they were not hungry
enough to get all their energy behind their [restaurant/store/shop].
Instead [bescheiden/kleinbürger] couples who mortgaged the farm to
start their McDonald's [confusing to use this term?] were the ideal
operators.
But they could not get credit to buy the land to build their
restaurant on. At least not easily. So McDonald's leased the land
for twenty years and released it with a mark-up to the franchisees.
[details, sources, who actually build the restaurant?] The
franchisees could get real estaste -- and McDonald's finally found a
way to profit. Today they own a large chunk of very attractive real
estate all over the world [in prime areas?]. In Russia they are even
the largest corporate land owner.
