Childhood & Early Years
Raymond Albert Kroc was born on October 5, 1902, in Oak Park, at that time a village adjacent to the city of Chicago in the state of Illinois. Both his parents were of Czech origin and Ray was their eldest child.
His father, Alois "Louis" Kroc, originally from the village of Bøasy near Plzeò in Bohemia, was a man of great discipline. Employed with the telegraph company, Western Union, he rose to reach a high position in the organization. He was also a baseball fan, a craze Ray inherited from him.
His mother, Rose Mary nee Hrach, was born in Illinois. She was an affectionate lady and a homemaker. She also played the piano, earning extra money by giving lessons to children and adult. Ray also learned the piano from her, showing a natural affinity to it.
He had two younger siblings; Robert and Lorraine. As children, Ray and Bob had very different inclinations and the two often found it difficult even to talk to each other. However, they came closer as they became older.
While Bob was studious, Ray was anything but that. He often came up with novel schemes, dreaming up elaborate plans to make them work, earning the nickname of ‘Danny Daydreamer’. But his dreams were never idle; contrarily they were always linked to some form of action.
From his childhood, Ray displayed a great deal of determination and confidence. He was also an intelligent, hardworking boy. While studying at Lincoln School in Oak Park, he excelled in debates, showing a knack of being able to convince people easily.
While studying at the grammar school, he started earning extra cash by doing odd jobs at grocery or drugstores. Later he started selling lemonade at a stand outside his home. This was his first stint with food business.
In 1916, at the age of 14, Ray, along with two of his friends, opened a music store called ‘Ray Kroc Music Emporium’, selling sheet music while he played the piano. However, it closed down after a few months.
He then worked for few months at his uncle’s soda fountain, where he further honed his salesmanship. It was here that he learned that a little smile and show of enthusiasm could make a person buy more than he actually intended to.
In 1917, on completion of his sophomore year, Ray decided to join the ongoing First World War as an ambulance driver, hoping to serve on the front line. But as a 15 year old, he was ineligible for such services.
Lying about his age, Ray joined the American Red Cross and was subsequently sent to Connecticut for training, after which, he was destined to serve in France. But the war ended before he could be sent overseas.
He then returned to Chicago and at his father’s insistence, rejoined Lincoln School to complete his schooling. But, by now, he had new ideas and therefore he dropped out of school once again, ready to venture out in the real world, earning his living.
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In 1919, at the age of 17, Ray Kroc began his career in sales, supplementing his income as a pianist at a nightclub or as a DJ at the local radio station. Subsequently, he held a series of jobs, selling everything from real estate in Fort Lauderdale to feminine accessories and embellishments.
For a while, he also joined American Stock Exchange in New York, reading ticker tapes and translating symbols. Finally, at the age of 21, he got his first steady job as a salesman at Lily Tulip Paper Cup Company.
Young, ambitious and hardworking, he now traveled around the country, selling paper cups, which he knew were there to stay. He took care of his customers’ needs, always keeping in touch with them. Very soon, he began to be counted as one of the top salesmen of the company.
In 1938, while selling paper cups, Kroc met a gentleman called Earl Prince. He had invented something, called ‘Multimixer’, which was actually a milkshake mixer with five spindles. Usually such shakers had one spindle that churned out one milkshake at a time while the ‘Multishaker’ could churn out five.
By then, after 16 years of service at Lily Tulip Paper Cup Company, he was feeling rather frustrated. Realizing that ‘Multimixer’ had great potential, he obtained exclusive marketing rights for the product and at the age of 37, gave up his secured job to form Prince Castle Sales.
Initially, the response was good, selling 8000 mixers in a good year. Slowly, people’s priorities began to change and his main customers, the restaurants and soda fountain vendors in cities, began to suffer, resulting in a dip in his sales. The Hamilton Beach drink mixers also offered a steep competition.
Opening McDonald s
In 1954, as the situation was rather grim, Ray Kroc noticed that one restaurant in San Bernardino had continued to order his mixers in bulk quantity. Curious, he made a visit and found it to be a drive-in restaurant with no indoor-sitting arrangements, run by two brothers, Richard and Maurice McDonald.
Looking around, he found that the restaurant used an assembly-line format to prepare and sell a large volume of food in very short time. Moreover, the menu was limited to cheeseburgers, hamburgers, fries, drinks and milkshakes; but the sale was so huge that it ran eight of his mixers continuously.
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Amazed, he began to loiter around the parking lot, talking to its customers and found that they came here regularly for its inexpensive, but tasty hamburgers and French fries. Immediately, he began to dream of a chain of McDonalds, each of which would use five to eight of his multimixers.
When he talked to the McDonald brothers they initially did not show any interest; but Kroc convinced them to give him the exclusive rights to sell the McDonald's method. He was then 52 years old, suffering from diabetes and arthritis. Yet, he knew that he must not miss the opportunity.
On April 15, 1955, Kroc opened his first restaurant in Des Plaines, Illinois. By the year end, he had opened two more; grossing $235,000 in sales. Everywhere, he used the McDonald brothers’ format, paying special attention to cleanliness. Later, he began to sell franchises, collecting 1.9% of the gross sale.
To make further profit he now opened another independent company that would buy or lease lands, on which McDonald franchises would stand. The franchises paid him a rental or a percentage of the sales, whichever was greater.
By the turn of the 1950s, McDonald had grown real big, bringing in good profit. But at the same time, frequent clashes began to erupt between Kroc and the McDonald brothers over changes Kroc would like to bring in. Therefore in 1961, Kroc bought out the McDonalds for $2.7 million-cash.
The transfer was not without hitch. Kroc had expected that the deal would include the original restaurant at San Bernardino; but at the last moment, the brothers refused to part with it. In retaliation, Kroc refused to give them a royalty, which he had only promised orally.
He also opened a brand-new McDonald’s one block away from the original store, now named ‘The Big M’, forcing the brothers away from business. Free to run his business as he thought fit, Kroc now began to expand very quickly. By 1965, the chain had 700 restaurants in 44 states.
In April, 1965, McDonald's went public at $22 per share. Within weeks its share price climbed to $49, bringing in huge profit for him. By the end of the decade, there were 1,500 McDonald's operating worldwide, surpassing Kroc’s wildest dream.
In 1965, Kroc became President of McDonald’s and started a training program for franchises owners, emphasizing on standardization of operations as well as automation. He made strict rules about cooking procedure, size of each product, packaging etc so that McDonald Hamburger’s taste the same all over the country.
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He served as the President of McDonald’s until 1968. Thereafter, he became the Chairman of the Board, holding the position until 1977. Finally from 1977 until his death in 1984, he remained the Senior Chairman of the company.
In 1977, after stepping down from his position as the Chairman of the Board, Kroc turned his attention to baseball. He now bought San Diego Padres and concentrated on improving the team. Although it made to the World Series in 1984, Kroc did not live to cherish it.
Ray Kroc is known to make a number of innovations in the food service industry. Most important among them was that he offered single-store franchises instead of territorial franchise as was the practice in those days.
Although giving exclusive licenses for a large market helped the franchisor to make quick money, single-store franchises allowed more control, contributing to the development of the chain. Kroc was ready to forgo easy money in order to establish a well-known chain with uniform service all over the country.
Kroc also looked after the interest of franchises. Unlike other restaurant chains, he sold the supplies at a reasonable rate, making sure that they earn enough profit, which in turn would serve his interest more.
Another of his innovative idea was to set up Hamburger University in Oak Brook, in the western suburb of Chicago. The campus is spread over 80 acres, providing 32 hours training to the restaurant employee in their first month. Initially Kroc oversaw lessons, but now his videotaped lectures are used.
Personal Life & Legacy
In 1922, Ray Kroc married his high school sweetheart Ethel Fleming. They had a daughter named Marilyn Kroc. The couple divorced in 1961.
In 1963, he married Jane Dobbins Green, a secretary. The marriage ended in a divorce in 1968.
In 1969, he married Joan Beverly Smith nee Mansfield. They first met in 1957, while he was married to Ethel and she to Rawland F. Smith, a Navy veteran and a McDonald's franchisee. They carried on a secret relationship for years before they could divorce their respective spouses and get married.
Kroc suffered from diabetes and arthritis. He was also an alcoholic. In 1980, after suffering a stroke, he was admitted to a rehabilitation centre for his alcoholism.
He died of heart failure on January 14, 1984 at the age of 81 and was buried at the El Camino Memorial Park in Sorrento Valley, San Diego. He was survived his third wife Joan.
At Hamburger University, set up by Ray Kroc, students are offered a degree in ‘Hamburgerology’ with a minor in French fries.
One of his co-trainees at Connecticut, where Kroc went for his training in ambulance driving, was a boy called Walter Elias. He too had faked his age, but unlike Kroc, he spent his spare time sketching. Today the world knows him as Walt Disney; the well-known film producer, voice actor, entertainer and animator.