We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. Learn more.

  1. Lifestyle
  2. Movies

The Founder and the Complicated True Story Behind the Founding of McDonald's

By:
Kerry Close
6 min read
The Founder tells the story of the relationship between Ray Kroc and McDonald's original founders. - Getty Images
The Founder tells the story of the relationship between Ray Kroc and McDonald's original founders. Getty Images

The man who built one of the largest restaurant franchises in the world is not named McDonald.

Ray Kroc, who transformed a small burger joint into a global fast food giant, is already a household name for many Big Mac fans, but The Founder—a movie that opened on limited release Friday—tells the story behind the origins of McDonald's and how Kroc rewrote history to call himself the founder of the company.

Or, rather, it tells one version of the story.

The details of what really happened depend on whom you ask—a fact that was made clear in a 1973 TIME cover story about McDonald's. This is how that article told the story:

In 1940, the original McDonald brothers Richard and Maurice—who were known as Dick and Mac, respectively opened a drive-in hamburger restaurant near Pasadena, Calif. However, by 1948, they realized their eatery would be more profitable if they increased efficiency by streamlining the menu and preparing food ahead of rush times. One innovative change: using infrared heat lamps to keep French fries warm, a technique Dick told TIME that they were the first in the industry to adopt.

Contrary to the narrative of The Founder, which shows Kroc giving the brothers the idea to franchise, Dick and Mac had franchised about six restaurants before they met Kroc. Kroc, who supplied the milkshake machines used in their restaurants, was so surprised when they placed an order for eight Multimixers for one restaurant that he flew to California to find out what kind of business could possibly be making so many milkshakes.

Kroc—who had previously struggled to make ends meet, taking gigs as a jazz pianist and a paper-cup salesman over the years—immediately asked for the job as McDonald's franchise agent. "When I got there, I saw more people waiting in line than I had ever seen at any drive-in," he told TIME. "I said to myself: 'Son of a bitch, these guys have got something. How about if I open some of these places?'"

He struck a deal with Dick and Mac, agreeing to pay them 0.5% of all future sales. Over the next five years, he created a chain of 228 McDonald's, in locations specifically selected in suburbs filled with families to whom the company hoped to market. Trying to appeal to kids, the company developed the character of Ronald McDonald to appear on TV ads and in restaurants. By 1960, the restaurants were grossing $56 million annually.

Kroc, however, was dissatisfied with his small cut of the profits. He asked the McDonald brothers how much they'd be willing to pay to sell him the whole chain, including its name. Their price was $2.7 million, with the caveat that they would maintain ownership of their original restaurant. Kroc borrowed from multiple sources in order to meet the price. "The $2.7 million ended up costing me $14 million," Kroc told TIME. "But I guess there was no way out. I needed the McDonald name and those golden arches. What are you going to do with a name like Kroc?"

The sale left Kroc bitterly angry with the McDonald brothers for keeping the original location. He opened a McDonald's location across the street from the brothers' original restaurant, forcing them to rename the original burger joint, which didn't stay in business much longer.

"I ran 'em out of business," he gleefully told TIME.

That was an angle with which Dick McDonald didn't exactly agree: "Ray Kroc stated that he forced McDonald Bros, to remove the name McDonald's from the unit we retained in San Bernardino, Calif. The facts are that we took the name off the building and removed the arches immediately upon the closing of the sale of our company to Kroc and associates in December 1961," he stated in a letter to the editor that ran several weeks later. "Kroc must have been kidding when he told your reporter that we renamed our unit Mac's Place. The name we used was The Big M. Ray was also being facetious when he told your reporter that he drove us out of business. My brother and I had retired two years previous to the sale, and were living in Santa Barbara, Calif. We had turned the operation of the San Bernardino unit over to a couple of longtime employees of ours who operated the drive-in for seven years. Ray Kroc was always a great prankster and probably couldn't resist the temptation to needle me."

Nevertheless, Kroc proclaimed himself McDonald's founder. Indeed, the company honored him on its Founder's Day (and wouldn't include the McDonald brothers until 1991).

Kroc's version of the story upset the McDonald brothers after the publication of his 1992 autobiography Grinding it Out: The Making of McDonald's. In the book, he named the first franchise he opened—in Des Plaines, Ill.—as the first McDonald's restaurant ever opened.

"Up until the time we sold, there was no mention of Kroc being the founder,'' Dick McDonald told the Wall Street Journal in 1991. ''If we had heard about it, he would be back selling milkshake machines.''

Tags