One of the biggest brands in the world is McDonald’s and many people have eaten there and will eat at a McDonald’s this week. Many of those people have read something about McDonald’s for much has been written. Grinding It Out – The Making of McDonald’s by Ray Kroc, Henry Regnery Company, Chicago, 1977. Mr. Kroc is the founder of the company. Similar to all companies, the company went through the normal cycle – it started small and individual stores were profitable. The premise of KISS or Keep it Simple Stupid help ensure the QSC and V (Quality, Service, Cleanliness and Value) remained a constant no matter what the company went through. At the beginning of the birth of the company, the people that are hired or join in the vision of the company will allow it to expand. The higher the quality, the better the alternative solutions which will need to be found are found. How did McDonald’s finance expansion? who did they turn to? the service agreement they had with the original owner had the McDonald’s the ability to sign off on expansion. Most of the time they were not interested but the clause caused troubles with the company lawyers because of its restrictive nature. All little things but they grow over time as people see the future differently.

McDonald’s is fortunate to have very strong relationships with its suppliers. As the company has grown so has its suppliers and when McDonald’s had fewer stores they once borrowed from their suppliers. The point is having great relationship and partnership with the suppliers is a key to McDonald’s success. An interesting story of development is the French Fry. McDonald’s has one the best tasting French fry because of the process of allowing the curing of the potatoes – they improve in taste as they dry out and the sugars change to starch. When the company was developing frozen French fries they were diehards who did not want to change and those who were suffering because of the potato peelings. The septic tanks could not treat the waste properly and smelled which came into the store. This reminds you there are usually more than one side to every story.

Part of the reason for McDonald’s success is how someone gets a franchise. The person applies, then they go to a McDonald’s and learns. When they get the franchise, they may have to locate to the community, spend 500 hours working at another McDonald’s . The final 6 months is courses at Hamburger University in Chicago and then store opens and field representatives are there to help through the problems. The small business person is prepared to operate.

Linking to dividend paying stocks, McDonald’s has grown to become a blue chip stock on the New York Stock Exchange and is a terrific stock to own and in moderation to eat at. Similar to all fast food restaurants they have systems in place to deliver a certain type of food quickly for large amounts of people. When new products are suggested by operators and the public there needs to be testing to see if they can get it to the same standards as the marquee products. McDonald’s continues to do many things right and as long as they continue to do them right remembering it is a people business first.

There are more questions than answers, till the next time – to raising questions