‘The Founder’ Shows How Real Estate Can Be a Weapon


The Founder opens across America on January 20th. The film showcases the rise to power of failed milkshake equipment salesman Ray Kroc. When Kroc meets the McDonald brothers by chance, modern fast food is born. Wait times and food prep were already being turned on their ear by the McDonald brothers. It’s just that they lacked a vision for branching out past their San Bernadino home base. What Ray Kroc did next dominates the bulk of The Founder and defined every quick meal your grandparents, parents and you have had since then.

Ray Kroc presented the McDonald brothers with a vision of a successful future. Franchise the McDonald’s concept and take over American dining. The McDonald brothers initially agreed to let Kroc set up a franchise in Des Plaines, Illinois. After 5 years, this wasn’t enough for Kroc. Ray saw opportunities slipping past him, as White Castle and Burger King started to tread upon his restaurant franchise idea. What would follow involved Kroc seizing the copyright to the McDonald’s name, setting up rival restaurants in San Bernadino and eventually squeezing the McDonald brothers out of the market. But, what made all of this a reality?

The establishment of the Franchise Reality Corporation gets minor notice in the film. B.J. Novak gets the honors of playing the real estate genius that redesigned Ray Kroc’s future. Novak’s take on Harry Sonneborn is pretty close to reality, but that’s if you discount the age difference. The point being is that Sonneborn saw the problem with the original vision of McDonald’s and American fast food to that point. Restaurants and drive-in dives could open and close at a moment’s notice. You never knew what communities would develop around a business or what the economy could wreck on burger sales. But, business owners always needed land.

Ray Kroc saw the future and he knew that his competitors were already getting ready to divide up territories in the emerging American market. However, Kroc wasn’t a culinary genius or had the production knowledge that helped the McDonald brothers. While he hired crews that copied and reworked the McDonald brothers’ successes, he needed a hook. If Kroc could sink his McDonald’s earnings into buying prime real estate around the country, selling burgers wouldn’t be enough for the McDonald brothers. A restaurant can’t compete in a market where they can’t even set up a shop.

This opens up one of those bizarre “What If” scenarios in American business history. The McDonald brothers felt they were in the right when they didn’t rework Ray Kroc’s contract. All business knowledge at that point in the 1950s supported their decision. They cut a deal and they expected Kroc to honor the terms. What they didn’t know was all of those Kroc quirks that would become later knowledge from the 1960s to his death in 1984. Kroc was already working back-door deals with Walt Disney to exclusively sell food in their parks. From there, he was tweaking local building code standards so that he could open locations faster. All the while, the McDonald brothers still thought they were working upon their initial handshake deal.

Finally, Ray Kroc chose to rewrite history as he was the victor. To this day, the McDonald’s Corporation only credits Ray Kroc as its founder. The McDonald brothers are listed as fast food pioneers, but their contributions to McDonalds are footnotes within footnotes. Think about this when you head during the weekend to check out John Lee Hancock‘s rather wonderful film. As compelling as Michael Keaton can make Ray Kroc, his claims on being The Founder are rather dubious.

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