The Founder: The Ultimate Story of a Quality Product Gone to Shit
Today we're going to talk about the 2016 film The Founder, starring Michael Keaton, Nick Offerman, and John Carroll Lynch. Written by Robert Siegel and directed by John Lee Hancock, this riveting film tells the story of Dick & Mac McDonald - the true founders of McDonald's restaurant - and Ray Kroc, the man who built an empire on their concept. Depending on your worldview, you may consider this either a film detailing the rise of one man in pursuit of the "American dream," or as the tale of two innovators who were completely screwed over by a greedy narcissist who only cared about winning. That's what we'll be discussing here, as it seems that there are two very different business models at work in this true story.
Here's the trailer to bring you up to speed, if you haven't seen the film:
Ray Kroc vs. the McDonald Brothers
Our main characters in this story are two brothers, Dick & Mac, and the man who talked them into giving franchising a second go, Ray. Now, for those who know their McDonald's history, Ray Kroc is the man who eventually turned McDonald's "fast food" into a global business operation. Few people, before this film, had probably ever heard of Dick & Mac.
Based in San Bernardino, CA, these brothers built a well-oiled machine for delivering quality food in 30 seconds rather than 30 minutes, which was industry standard at the time. They basically followed the principles detailed in The Lean Startup by Eric Ries. In the film, you learn their backstory: how they'd failed in several business ventures, how they'd learned from each experience and changed their business model, and how they ultimately created an MVP with chalk on a tennis court before building their new concept: a mean, lean burger & fries making machine. Their goal, clearly, was validated learning. And because they learned faster than everyone else, they were able to create something genuinely exciting and unique for 1948. In fact, they had invented a new way of serving food to the masses. And once that idea had been validated, they turned their focus onto quality control.
Now, when Ray Kroc turned up at their doorstep in 1954, he declared that the McDonald's burger was the best burger he'd ever had. And he fell head over heels for their innovative system, eventually begging them to reconsider franchising the restaurant with Kroc himself at the helm. The brothers had already attempted to franchise their restaurant in the past, but because they were unable to maintain their high standards in terms of operations and food quality, they had given up on the idea. Kroc insisted that they try again, and since the brothers were keen to see their business grow, they agreed.
Ray Kroc quickly returned to his native Illinois, mortgaged his home, and got to work expanding what would eventually become the McDonald's empire. This was a man who had failed at every other business idea he'd ever had, and to him, this was his chance to change his fate. However, with his goal of rapid growth, product quality quickly went out the window. As you see in the film, he even turned to powdered milkshakes to cut down costs, rather than maintain the walk-in freezers for ice cream, which were cutting into profits. Based on this first example of cutting corners, it's no surprise that the "best burger he'd ever eaten" quickly downgraded into the shit food McDonald's serves today. But as Ray Kroc puts it: he's successful, not because he was a genius or highly educated, but because he was persistent.
Persistence: What Does It Really Mean?
In the film, Kroc has an "elevator pitch" of sorts that he uses to recruit new franchise owners throughout the Midwest. He says that McDonald's is about "family, not being afraid of hard work, to roll up your sleeves, to jump on the ladder of success, to have guts and gumption, fire in your belly, it's for those with drive, the hustlers." And no one can deny that Kroc embodied some of these traits. You can't create an empire like McDonald's without vision and hard work; however, you could also argue that McDonald's wouldn't exist at all without the hard work and vision of the McDonald brothers - who actually did put family first. And like Kroc, they also rolled up their sleeves and applied elbow grease. So what's the difference? According to Michael Keaton, "the McDonald brothers...their future went about that far [about a foot or so]. Ray Kroc's vision for the future of McDonald's was boundless." But is one better than the other?
Business is War vs. Business is About a Great Product
Herein lies the real question that The Founder raises, whether it intends to or not:
Which is the more successful business?
The empire that is driven by profit over quality
The small business that is driven by quality over profit
In the United States, and elsewhere I'm sure, we're taught that the "titans of industry" - the Krocs of the world - are the real heroes in our society. That these are the people we should look up to. These are the ones who are willing to "put a water hose in their competitor's mouth while they drown," and we're supposed to applaud their ruthlessness and drive. We're taught to believe that it's survival of the fittest, that the best man wins, and that persistence is the key to success. But is that true?
I guess it depends on what you consider to be a "success."
Sure, McDonald's has been wildly "successful" in terms of growth. Their worldwide revenue in 2016 was $24.62 billion (USD). Their daily customer traffic consists of over 62 million people. In 2010, they were selling more than 75 hamburgers every second. The McDonald's economy is larger than Ecuador's. There are more than 36,000 locations worldwide, and 80% are franchised. However, recent Gallup polling suggests that these larger companies are not the ones who benefit the United States economy the most. Instead, the majority of jobs are created by small businesses - like the kind Dick & Mac had founded. And, as it turns out, Americans are starting fewer small businesses than ever before, which is leading to economic decline.
Then there's the issue of food quality. When the McDonald brothers first opened their San Bernardino restaurant, they knew from past experience that the most "in demand" products were burgers, fries, and milkshakes. They applied those constraints to their menu and business, only focusing on those key products and working to make them as good as they could be. (You see this in the film, as Dick discusses the quality of french fry crispiness with his brother.) They were completely opposed to powdered milkshakes, and surely would have been opposed to the "pink slime" chicken nuggets and burgers that got McDonald's into trouble not that long ago. The slime, known as ammonium hydroxide, is a meat filler which is believed to cause stomach and intestinal cancers. When faced with these claims, McDonald's responded that this was a "myth," and that they had stopped using the slime "three years ago" - which is hardly comforting, having grown up on the stuff.
Then again, as pointed out in the film: the brothers were in the food industry, but Ray Kroc wasn't in the "burger business - he was in the real estate business." So why should Kroc care about food quality? He's more concerned about the land beneath the burgers, and the profits that come from that location. On the one hand, you could argue that this is what makes him an "astute" businessman; on the other, perhaps this worldview is precisely why McDonald's has been associated with obesity, diabetes, cancer, asthma, heart disease, and more over the years. It's not about the quality of food, but the profits that come with sales. And, as the argument goes, if you get sick from their food, then it's your fault for eating it, not theirs for selling it to you.
Such a statement is enough to make Dick & Mac roll in their graves, because they were never in it for the money. Success to the McDonald brothers was in doing a job well, and benefiting their community. Success to them was pride in what they had created, and a mutual respect shared between their establishment and their customer. It certainly wasn't about greed, or a global takeover.
So who's the real hero here?
The Founder may be considered a drama. We saw it more as a tragedy. Here were two men who were passionate about their product and the innovative system that they had created. They wanted to share it with the world. Instead, their vision was stolen by a man who had never built anything successful in his life. And because he'd been "fucked over" so many times (in his opinion), he had no problem fucking someone else over even harder. He saw the McDonald's in San Bernardino, and he just "had to have it." But it was never about the quality to him - just the financial potential of repackaging something deemed "authentic."
Some might argue that Ray Kroc is simply the superior businessman, or that he's Machiavellian and the "ends justify the means." It's a shame that the McDonald brothers hadn't studied Machiavelli themselves - they would have known that you can never expand and maintain control if you leave your fate in the hands of another (see The Prince, Chapter III - Of Mixed Principalities). The brothers were simply not established enough to exert their authority, which enabled Kroc to usurp their "kingdom." And by allowing him to lead their franchising efforts, the franchisees, who made up the growing McDonald's organization, effectively swore their allegiance to Kroc, rather than the brothers, from the very beginning. Those franchise owners believed there was more to gain by following Kroc, whether they even knew of the McDonald brothers or not. And in order to keep the brothers down, Kroc not only robbed them of any future royalties, but built a McDonald's directly across the street from their original location in San Bernardino, running the brothers completely out of business within a matter of years. Yes, the brothers each made a little over a million dollars each, but they were robbed of everything that had meaning to them in the process, as Kroc was both ruthless and wildly effective.
And to what ends?
Everyone knows McDonald's these days. Imagine if they knew the brand as the brothers had intended it, rather than the profit-machine started by Kroc. That's the real tragedy here. The original McDonald's changed the game of "fast food" without sacrificing quality, and ultimately raised the bar as to what people should expect from quick meals on the go. Today, our standards are so low, we'll eat pink sludge, even if we don't have to. And that's Kroc's real gift to society. What a shame everyone puts his contribution on a pedestal...
Then again, you should watch the film and decide for yourself: Which is the better business? Who do you respect more? Find us on Twitter @wordsbysorensen and let us know. We'd love to continue the conversation.