How McDonalds Was Founded with Life Insurance!
Ray Kroc worked playing the piano, then selling paper cups, before he sold multimixers for milkshakes. In 1954, Kroc (1902-1984) took notice of a successful hamburger stand in San Bernardino, California, which he called on, intending to sell brothers Dick and Mac McDonald more multimixers. He learned they were interested in a nationwide franchising agent. Kroc, 52 at the time, decided his future was in hamburgers and partnered with the brothers. He opened his first McDonald’s in Des Plaines, Illinois, in 1955 and bought out the McDonald brothers in 1961.
Kroc did not take a salary during his first eight years, and to overcome the constant cashflow problems, Kroc borrowed money from two of his cash value life insurance policies (and also his bank) to help cover the salaries of key employees. He also used some of the money to create an advertising campaign around emerging mascot Ronald McDonald.
As the franchising of McDonald’s took off, Ray Kroc needed all the franchisees and suppliers to buy into his vision, working not for McDonald’s but for themselves, together with McDonald’s. This helped maintain quality, speed of service, and methods. Along the way, it was franchisees that created some of the classic items on the menu, like the Big Mac, the Filet-O-Fish, and the Egg McMuffin.
McDonald’s grew to more than 700 restaurants within 10 years. Today, McDonald’s serves more than 50 million people each day through more than 36,000 locations in 100 countries.
As the brand expanded, McDonald’s gave back. One very noteworthy involvement has been the Ronald McDonald House Charities. In 1973, Fred Hill, a football player with the Philadelphia Eagles, had the need for just such a facility at Children’s Hospital of Philadelphia, where his daughter was being treated for leukemia. But he had no place to stay during her medical care. Hill’s dilemma led to the first Ronald McDonald House. Today, RMHC has grown to 368 Ronald McDonald Houses in 64 countries, providing supportive housing and over 7,200 bedrooms to families around the world each night.
