"The Founder" Movie: 
McDonald's Business Lessons

Reviewed by Joy Ramos Davis

Synopsis: "The Founder" movie is a bio-pic that is based on a true story about the real founders of the McDonald's franchise in America and their business dealings with Ray Kroc who eventually took legal ownership of their ideas and continues to profit from it today.  It's a lesson in negotiation styles and understanding the risk-averse personalities surrounding Ray who clashed with him, sabotaging his efforts in franchising and branding McDonald's nationwide.

Warning: Spoilers within Presentation

Meet and Greet Moment

Welcome to "Conscious Movie Reviews, I'm your host Joy Davis and here to review "The Founder," a bio-pic.  

Based on true events, it is questionable that Ray Kroc was really a bad guy in the expansion of McDonald's as a national franchise from his dealings with the McDonald brothers.

When they first met in 1954, Mac and Dick McDonald requested six Prince Castle milk shake machines for immediate delivery.  Salesman Ray Kroc drove from the Midwest to San Bernardino, California to fulfill their order himself.  He found their unique system of creating 15-cent burgers and fries within 30-seconds absolutely awe-inspiring.  This was unheard of at the time, along with self-service and use of disposable packaging.  The brothers were more than open to share their history and concept with him.

As serial entrepreneurs, the McDonalds went from being owners of a failed movie theater to selling hot dogs, then earned local success with their burger joint that's based on their fast food method - a symphony of high efficiency.  

Franchising McDonald's

When Ray insisted that they franchise, the brothers shot the idea down. They gave up on it a while back from being unable to enforce standards from afar, plus gross mismanagement by a franchisee in Phoenix, Arizona. To be historically accurate, the McDonald brothers were needing a new franchise manager before they met Ray, after losing the last guy to health problems.  They only wanted a small number of restaurants, whereas Ray envisioned explosive growth in the hundreds across the country.  

For our Soul's maturity, people can show up on our path to serve as our adversaries.  Through the universal Law of Attraction, we can attract opposites to balance out our character in an efficient way.  There are no accidents or mistakes in life, only lessons for our spiritual growth.  From this higher perspective, we can see an adversary as really an opportunity for gaining self-mastery over our lower natures.  

As Ray was persistence and determination personified, the brothers lacked vision to be risk-averse, growing their business modestly.  In effect, they canceled each other out, like mixing fire and water.  Ray's marriage to Ethel had similar dynamics that limited his wildly ambitious nature.  She preferred that he settle down with her to enjoy a comfortable life of leisure. 

Resistance and Control

Under legal contract, Ray was able to lead the franchising effort of McDonald's in the Midwest.  He agreed to only make changes under the written approval of the brothers, which they never did.  

Ray's franchising experiences in Illinois mirrored that of the brothers.  He saw mismanagement and inconsistent standards practiced at the burger joints run by the wealthy investors who were fellow golfers from the country club.  To correct that, Ray recruited only committed, middle-class, husband and wife teams to buy into and follow the McDonald's formula. This solved his dilemma.  The change propelled rapid growth with a demand for more franchises throughout the Midwest.

When cost-of-growth challenges came up, any creative ideas by Ray were unapproved.  It was the controlling nature of the brothers that kept them from having an ideal partnership of common purpose.  Their poverty consciousness clashed badly with Ray's abundance mentality - more opposites in action.

For many, the experience of abandonment from childhood can be financially acted out in the adult years to manifest as stinginess and having a victim mentality of people taking financial advantage of you.  By having gratitude, it can open up wellsprings of abundance to come into your life.   

The Soviet-Style of Win-Lose Negotiating

In dealing with Ray, the McDonald brothers were Win-Lose negotiators. They exhibited what's called the Soviet Style of Negotiating that was recognized by Herb Cohen, an internationally respected negotiator who advised President Jimmy Carter during the Iran hostage crisis for their release.  Herb Cohen also coined the saying about having a "win-win" situation.

Characteristically, Soviets are known to be stingy in their concessions. They delay making any concession and when they finally do, it reflects only a minuscule change in their position.  When Ray asked to re-negotiate the contract, the brothers were unwilling to share the growing wealth with Ray, keeping him locked into a low profit percentage agreement while he did all the franchising work with high risks involved.  He earned a mere 1.4% on every 15-cent hamburger sold. 

When blueprint changes were needed right away for a new restaurant in Illinois to be launched, the brothers stalled.  It was their way of ignoring deadlines - a Soviet style of being patient and acting as if time is of no significance to them in the negotiations process.  

Ray's idea of having Coke associated with the franchise was seen as distasteful, crass commercialism.  And when he proposed that they switch to using a powdered milkshake to offset the high cost of refrigerating ice cream, there was a resounding "No" again.  Their controlling manner lead to Ray's growing resentment towards them.  They played the victim card well.  Ray was seen by the brothers as the "fox in the hen house" without their taking any responsibility for acting like saboteurs.  

Stealing Ideas

Mac and Dick were attached to pride from their accomplishments.  They prided themselves in creating a model system of fast food delivery and achieving some business success.  Unfortunately, this was the extent of their vision.  

As Ray expanded the franchise in the Midwest, he began to proclaim himself as the founder of McDonald's.  Miles Davis, the great musician, once said, "Lesser artists borrow, great artists steal."  What Ray did was steal an idea, the McDonald system and name brand, that can be improved upon and put to good use right away.  This kind of stealing was no different than the brothers taking Henry Ford's automotive assembly line concept and creatively adapting it to make burgers in 30-seconds. 

The Real Business is in Real Estate

When Ray's debts grew from the high costs of refrigeration, he tried to renegotiate the bank loan, but couldn't.  He lacked assets and didn't have cash reserves from the minuscule profits he earned through the business.  

Listening nearby was Harry Sonneborn, a financial consultant for Tastee-Freez, who enlightened him on how to turn his misfortunes around.  Ray learned that he was not in the burger business, but in real estate.  By purchasing plots of land that would be leased to the franchisees, it would create a revenue stream that can be used for expansion.  If they don't uphold the standards of running a McDonald's franchise, he could cancel their lease. The brothers would also be under Ray's control from operating as a separate company called Franchise Realty Corporation.  He no longer had to rely on their approval.  

Ending the Marriage

Ray cut ties with his wife to announce that he wanted a divorce.  She sat in stunned silence at the dinner table.   

Whenever you try to control your partner to make them safe, like Ethel did with Ray's ambitious nature, it also makes them dull.  We create our own boredom.  This is according to Chuck Spezzano, creator of The Psychology of Vision.  We try to control them, to shut down that area of attractiveness, because we want them to share it only with us and not with anybody else.  Of course, doing this does not work.  When we shut down attractiveness in any area, it begins to shut down in every area.  For the Krocs, it was the downfall of their marriage. Our partner's attractiveness is a gift to everyone, just as ours is.   

Ray really wanted Joan, who was already married to one of his investors. They recognized ambition in each other to be a more suitable match. 

The Emotional Side of Diabetes

Over the phone, Ray's intent was clear, "Contracts are like hearts, they're made to be broken."  When he began to act independently of the brothers in running the McDonald's franchise, the stress took a toll on Dick.  His diabetes got worst.  

For every disease, there is an emotional component to it.  This is according to Inna Segal, a pioneer in the field of Energy Medicine.  She teaches that those with diabetes have a constant need for sweetness to mask feelings of weakness, limitation, and the belief that there is not enough.  It can keep them stuck in lack that's self-created.   

Ending the Partnership

Ray was fed up with Mac and Dick fighting him the whole time.  They chose to hold their fixed position of control and play the victim, rather than be proactive in a cooperative way to grow the business together.      

At a legal meeting in 1961, he very shrewdly bought the business and the rights to the McDonald's name from under the brothers for $2.7 million.  And through a handshake deal, they would receive 1.9% royalty on all McDonald's proceeds.   

The brothers made the mistake of negotiating on behalf of their institution. A better way is to negotiate on behalf of yourself.  You must personalize both yourself and the situation, advises Herb Cohen, a master negotiator. The other party must not see you as a statistic, a thing, a commodity, or an article of commerce.  If you present yourself as a unique, vulnerable human being, there is greater likelihood that you will get what you want.  So, you'll have to act like you are taking it all personally and its emotionally painful without holding back.

Based on historical accounts, the McDonald brothers refused to transfer the real estate and rights to the original unit.  More resistance on their part.

In the end, they never got a cent in royalties from Ray Kroc.   

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