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Ray Kroc proposed the idea of franchising McDonald's as a way to sell more of his Multimixers 7 years before buying the McDonald's brothers out of the company for $2.7M.

Findings

Additional insights we found via Founders Podcast

  1. After receiving an unusually large order for Multimixers, Kroc visited the original McDonald’s in San Bernardino and was amazed by the Speedee Service System (a kitchen assembly line).

  2. The McDonald’s brothers didn’t want to run the franchises by themselves, so Kroc offered to run all the franchising operations for the brothers.

  3. As the franchising agent, Kroc received 1.4% of each franchise's earnings, while the McDonald’s brothers earned 0.5% that was split between the two of them.

  4. In Kroc’s original contract, all changes to any McDonald’s operations had to be approved by the brothers in writing, which created frequent tensions between Kroc and the brothers.

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