It’s always a mystery as to why the founder of McDonald’s isn’t a McDonald. Ray Kroc used to be a milkshake machine salesman who was fascinated by one of his best customers — the McDonald Brothers. The Netflix film “The Founder” looks into transforming this revolutionary fast-food chain from a mom-and-pop shop to one of the giants in the quick-service industry.
Without delving into the performances or the creative liberties considered during the show, this will analyze key takeaways that you can get from the film without having to watch it yourself.
Complications of Franchising
When you decide to hand over all the knowledge you’ve gained in business throughout the years to someone else, it’s understandable why you’d be precarious about the future of the company. The reasons why people go into franchising can vary. Usually, it’s to meet the demand for your product or service in other markets.
In the film, the McDonald brothers were apprehensive about Kroc’s idea of franchising their business model. Their priorities were quality control of their product and the cleanliness of their establishment. You can ensure that your franchisee has a clean environment by keeping an eye on their access to places where they can dump their trash. Connecting them with rental services for dump bins can help make sure that they’ll have no excuse to keep a neat and tidy establishment.
For quality control, the only way that Kroc was able to do so was to make sure that he knew the sort of entrepreneurs he was going into business with. Just because they have money doesn’t mean that they’re going to be a reliable franchisee. He looked for gumption. That’s a lesson to consider before you get them to sign your contract.
Importance of a Written Contract
Never, ever go into a handshake deal. Just because there is a formality with contracts, the legal expense is worth it. The McDonald brothers shook on a deal with Kroc that promised them half a percent on future earnings of the McDonalds company. That percentage was already a lot lower than what the brothers asked for, but considering the potential of their model, they agreed. Their handshake was never honored.
So, again, you should never “shake on it.” You need to protect your assets, and you need to outline your terms as clearly as possible to avoid people taking advantage of you. You know that business is all about survival of the fittest. People say it’s dog-eat-dog out there, so you need to protect yourself. It’s not cynical to always question what others can offer. In fact, being skeptical about ventures is crucial for any entrepreneur who wants to grow their company. When you’re always on your toes, you won’t have to worry about being blindsided because your inquisitiveness makes you prepared. Protect yourself through formalities. Contracts are long-standing proceedings for a reason.
Owning the Land You Build On
Here’s a little fun fact that the film explained: the fast-food empire is actually a real estate empire. One of Kroc’s associates found out that by owning the land that the franchise is built on and forcing franchisees to operate on their land, they can increase their profits considerably. Kroc also used this opportunity to undercut the brothers and jump over their terms of the contract. By owning the land that the franchises were built on, he had control over the quality of the franchises. He no longer had to get approval from the brothers on every single change he wanted to make.
You already know that investing in real estate gives you a stable asset with a multitude of opportunities. Establishing a company on rented property limits you to the terms of your lessor and, as a result, limits the growth of your company. When you own the land you build your business on, you have free rein over what happens on your land. You don’t have to run it through the landlord and plead for their approval.
If you decide to watch the movie or have already watched it, you might think Ray Kroc was brutal to the brothers. In reality, many more Ray Krocs exist who can be more challenging to deal with. In the end, people like Kroc usually end up winning. But you don’t have to be like him to succeed in your venture. You should learn how to defeat the people trying to take advantage of an honest business. Always protect yourself, your business, and your ideas so that you can say that you’ve always done it right.
