‘’The Founder” tells the story of how the struggling salesman Ray Kroc (Michael Keaton) meets the McDonald brothers ; Mac McDonald( John Caroll Lynch) and Dick McDonald(Nick Offerman) who had established a burger joint in South Carolina. After being instantaneously blow away by the brother’s revolutionary speed system of making the food, he realises the potential for this idea to manifest into the sensationalised family dining experience it is today.
The biographic drama film takes off with Ray Kroc who’s introduced to us as a travelling salesman selling milkshake makers in Illinois, who has a hunger for more. While most diners reject his multiple-milkshake machines, one small Californian joint orders eight. Ray intrigued, drives out to visit and finds a revolutionary fast food system that enchants him. McDonald’s is a family restaurant, not a hang-out for riff-raff’s and trouble makers is staffed by a professional and engaged staff. Its blue-collar owners Mac (John Carroll Lynch) and Dick McDonald (Nick Offerman) have spent years perfecting their system, but have no interest in further entertaining the idea of franchising the concept due to Mac’s poor health.
But Ray has a vision for their restaurant, and cannot be deterred by mere reluctance. He is a man possessed, and he wins over the McDonald brothers, his bank and even his wife,Ethel (Laura Dern). She offers unstinting support despite her hopes that Ray might opt for quiet retirement rather than a new venture. Ray’s drive, however, only grows — and soon he sees anyone who cautions him as an enemy. He makes new friends, like Patrick Wilson’s restaurateur and his wife Joan (Linda Cardellini), and tightens his grip on the McDonald’s name and product.
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He’s clearly sincere in his pursuit of his vision, but that sincerity leads him to deceit and cruelty .Ray meets Harry Sonneborn who requests to look at his books. Harry tells Ray that the realised profits are in providing real estate to the franchises and by doing this he has leverage over the brothers .Creating a company, Ray Kroc’s American Dream becomes the brothers nightmare. The Founder is a story about a lie running around the world while the truth unbeknown to anyone walks around in San Bernadino.
Management and Leadership
A competent manager is able to use the available resources efficiently, maintain high levels of employee performance and professionalism and provide above average service to their customers.
The McDonald brothers innovated and mastered the efficient restaurant business model and decided to have one, top class restaurant instead of multiple mediocre restaurants. We see them involved in terms of knowing everything about the business. There was a unity of direction with Dick giving direction to the employees by name, similarly Ray micromanages a new McDonalds that’s opened up in Des Plaines, making sure everyone on staff is following protocol exactly as designed. He provides a headship to new owners, we see him at the opening of’’’’ walking around in the kitchen eager to provide guidance where needed. We also see Ray coming back after hours to hose down and clean up a franchise that lacked the correct quality control and was filthy. His obsession over cleanliness and the standards of the restaurant motivated employees to be as committed. This is Ray leading by example, setting the benchmark for the level of professionalism expected:
· Respect for the environment in which you conduct business
· Responsibility and dependability
· Conscientiousness
Ray maintains his responsible behaviour by avoiding spending company time telling everybody about his personal matters for financial rewarding. He never disclosed to the brothers the means as to how he had acquired the capital necessary to finance his first franchise or the urgency for the terms of his contract to be re-negotiated. Ray came across as an autocratic leader that did what they saw fit for all concerned stakeholders (ie. distributing the powder milkshakes without consulting the brothers).
Ray remained goal-oriented Instead of focusing on the issue of being unable to financially sustain the business on the predetermined terms, he instead directed his attention towards the solution – starting a company that would overshadow the success of the McDonald brother’s establishment.
An effective leader prioritizes so they can get the most important and urgent things done first. Instead of worrying and complaining about the issues, he focused on the objectives and turned his energy towards creating a plan and strategy to achieve his objectives.
Ray was able to build up Fred Turner from a fryer in his first restaurant to ultimately the successor CEO of his foundation, as well as promoting June Martino from bookkeeper to corporate secretary, treasurer, director and co-owner of the McDonald’s corporation. He built them up and created a stronger team, which benefited everyone involved. He accomplished this by paying attention to their strengths and weaknesses.
Kroc was also a phenomenal communicator in terms of being able to sell his vision and convince varied demographics; religious groups, minimum wage earners, public service workers as well as the affluent to buy into his idea with blinding faith in its success.
· Entrepreneurial Qualities
Dick and Maurice McDonald
McDonald brothers innovated and mastered the efficient restaurant business model and decided to have one best in a class restaurant instead of multiple mediocre restaurants.
(17:00) The McDonald brothers are explaining how they came to be. They took the risk and abandoned their careers in Hollywood to establish a business of their own. They continued taking risks such as physically relocating their business (sawing the building in half to mobilize it through an overpass between the two towns) as business begins to level down they realise how problematic the Drive-In model is (undesirable clientele, service delivery issues, expenses). They then decide to reinvent themselves as a business; starting by cutting down their 27 item menu to what makes up 87% of their sales: Hamburgers, French Fries and Soft Drinks. This meant Jukeboxes, car hobs and cigarette machines were removed to inhibit undesirables and cutlery was replaced with paper packaging to cut operational costs.
(20:00) they shut down for months to harmonize their objective, to ergonomically maximise the kitchen layout. Dick maps out exact measurements of the kitchen onto a tennis court and has the entire staff go through the motions. 3 versions and 6 hours later they perfected the speed system. (Direct supervision, Follow up and Effective communication)
Dick and Mac showcased the entrepreneurial quality of being able to lead and organise their staff successfully to see through their vision.
He took care of the details and perfected the process showing detail orientation and perfectionism. I loved the scene when with his stop watch in hand, he claims that the fries are not right and insists that the time be lowered to 2 minutes and 50 seconds and the heat be set to 400 degrees, not 357. He wanted them cooked faster in less time.
Ray Kroc
Ray tells them he wants to franchise the restaurant. The brothers tell him they already tried and decided against it after a failure in corrective action. Ray is adamant so they let him monitor the franchising he’ll do in his home state of Illinois to make sure everything is up to par with Dick and Mac’s established standards. Ray takes note of a picture on the wall of a McDonalds with two golden arches on either side of the building – designed by Dick. He continues selling multimixer machines and notices a church and the American flag perched on the porches of suburban areas as he drives through the town.
He heads back to California and tells the McDonald brothers that all the towns he visited had two things in common , churches and American Flags and tells them that McDonald’s should like the religious symbol and flag be a constant in every city to symbolize community and the family dining experience. Kroc according to the principle of effective planning; anticipated the future in order to identify and bridge the gap between the current status of the business and where the envision it going. Kroc was an entrepreneur by category as his motivation was to build his own business to make personal strides and secure success with his ethics following the consequence-based theory and he’d mastered the skill of add on value.
The sales office Ray worked for is now called Franchise Realty Corporation Ray is going to provide leasing services to new franchises.
· Marketing and Branding
As the saying goes it’s all well to come up with a good idea but the ability to add value and market it is what separates failing entrepreneurs and upcoming empires. Dick and Mac had the idea they saw the vision and attempt to try franchising but ultimately Ray’s ability to market his vision is why he’s ‘The Founder’ of the family dining experience we know today.
The McDonald brothers cultivated a competitive advantage, a dining experience like no other. Different from Drive-ins but built of its premises, they created a new offering by improving the current offering.
Where Kroc was able to one up the brother’s one dimensional strategy was come in and seek out untapped market; to begin with by seeking out potential franchisees from his country club then hardworking average Americans but ultimately globally) that ensured the business grew and sky rocketed profitability. As stated by profitworks.ca Kroc believed that advertising was an investment that would in end, come back many times over. In the movie we hear Kroc say to an employee that ‘if you’ve got time to lean you’ve got time to clean’ , this was a way of Kroc emphasizing their operations competitive strategy that prioritized making the customer “happy” through short wait times and hot food.
The streamlined foodservice asserts it dominance when it comes to value, its attention to detail (the equal ratio of mustard to ketchup, the 2 pickles and fries cooked to perfection at exactly ‘400 degrees’) speaks to how the restaurant strives for perfection. Same set up, process, and taste was one reason for the business’ success. The golden arches today are said to be the world’s most recognizable symbol. He identified the value in the name ‘McDonalds’ itself, as naming and branding are vital for any successful business. Without both the arches and The ‘McDonalds’ name the giant probably wouldn’t have succeeded with a name like ‘Kroc’s’ as quoted by Ray himself.
McDonalds utilizes the four P’s of marketing (price, property, promotion and products).
-They focus on the right price (low enough that consumers won’t think quality has been impacted and offering value items)
– Prime real estate for their franchises(centrally located that a business person can a grab a meal on the go, for teenagers to dine on a budget and have access to free Wi-Fi, for children the entertainment available from their playgrounds)
-Promotional offerings such as toys for their kiddie’s meals and competitions (ie. win one of 100 cars)
-Their products today focus on what’s relevant, constantly assessing when a products in decline and familiarizing themselves with customer preferences and how to ‘manipulate’ and upsell to them.
· Advantages and Disadvantages of Franchising:
Advantages
Disadvantages
You don’t necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model.
Franchise agreements dictate how you run the business, so there may be little room for creativity.
You may find it easier to secure finance for a franchise. It may cost less to buy a franchise than start your own business of the same type.
Bad performances by other franchisees may affect your franchise’s reputation.
Franchises often have an established reputation and image, proven management and work practices, access to national advertising and ongoing support.
Buying a franchise means ongoing sharing of profit with the franchisor.
Franchises offer the independence of small business ownership supported by the benefits of a big business network.
Franchisors do not have to renew an agreement at the end of the franchise term.
Relationships with suppliers have already been established.
You may find that after some time, ongoing franchisor monitoring becomes intrusive
Relationships with suppliers have already been established.
Costs may be higher than you expect. As well as the initial costs of buying the franchise, you pay continuing management service fees and you may have to agree to buy products from the franchisor.
The risk of business failure is reduced by franchising. Your business is based on a proven idea. You can check how successful other franchises are before committing yourself.
The franchisor might go out of business.
Ray Kroc Analysis
An entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. This description describes Kroc best He did what it took to sell milkshake mixers then laid his future on the line (mortgaging his home, personal relationships he’d forged over his lifespan of 52 years) as he signed a contract with the McDonald brothers to set up franchises. To combat this looming reality he took on the role of an innovator, a source of new ideas, goods, services, and new way of business(instamix milkshakes) procedures(leasing agreements woven into potential franchisee contracts) that would honour the integrity of stakeholders (other franchise owners).
He possessed an almost animalistic persistence and a deep sense of self belief where others didn’t see the opportunity. The brothers presented opposition to new ideas and to change. Eventually Ray found ways around Mac and Dick’s resistance, and ultimately turned to the blind spots of their impartial personalities. He exhibited vision, passion, determination, and high energy. Throughout the film we see Kroc get frustrated a lot of the time, but he never gives up. His intention was not to grow the brother’s business but to take advantage of it and make it his own. He soldiered on until his name became synonymous with success.
