This another part in the saga of my thoughts on ‘Grinding it out‘, an account of Mcdonalds, written by Ray Kroc. I’m about 3/4 into the 210-page book. Let me start with a disclaimer: ‘Grinding it out’ is a book written to promote the McDonalds way and aimed at motivating existing staff and operators, as well as attracting new blood of course. I feel like I should tell this to any person thinking about reading the book, because I don’t want to write or promote an informercial on McDonalds. Let me also say that I’m a vegetarian since a few years ago and my opinion of McDonalds is somewhat flavoured – I respect the business but I only eat there once a year.

That said, it’s not a bad book at all. In it, you will learn what made McDonalds great and much of what made Ray Kroc great. I wrote a little about him a few days ago – a blue-collar worker, who excelled in sales and at smelling opportunities. He was an operations-freak, planning out every step from the potato to the french frie or from the cow to the burger, and from the food to customers’ mouths. But it all started with location-location-location, planting a restaurant in the right spot, attracting the talent to run it, and promoting the McDonalds way. This book is a perfect example of that.

McDonalds is a complicated business, wrapped up in a simple package. Many people eating at McDonalds think the restaurant is owned by the company and all the staff works for them too. They may even think that McDonalds has farms growing potatoes and herding milkshake-cows, I’m not sure. But it’s not like that. At the time the book was published (the last edition in 1992), the company owned less than 30% of the restaurants around the world, and I’m sure it’s around the 20% mark or less today. The rest is composed of franchises, owned by independent operators, who, like entrepreneurs, have to turn an empty building and a name into a thriving ecosystem.

But the advantage of being a franchisee, especially a McDonalds-one, is that you are not really alone. Sure, you invest a considerable amount of cash into the venture and you bear most of the risk, but when you sign up for a franchise, you get working experience at a running McDonalds-restaurant, training at McDonalds-university, also for your staff, and the purchasing- and marketing-power that makes McDonalds great.

Something about purchasing-power. The last book I read on McDo was in the form of ‘Fast Food Nation‘, a drastically different view of the company. If ‘Grinding it out’ is a picture of heaven, this book presents it as hell. Some of the criticisms in that book were about the way that food was artificially flavoured to make better smelling food (I forgot how that was bad), and on how the power of McDonalds both lead to lower wages in America and the destruction of the farmer. On that last point, I think that’s probably right, then again, whether there is still space for the traditional farmer is another discussion all together. McDonalds has a lot of purchasing power, it has deep and privileged relationship with its suppliers, which result in cheaper and (hopefully) better food. This translates into an easier experience for the franchisee.

From my reading, I think there are following sub-groups in the McDonalds-umbrella, which make up the ecosystem. These are: the corporation, which runs marketing (think Ronald McDonalds), decides on real-estate locations, and maintains some (not all) of the relationships with suppliers. Then there is McDonalds University, which trains operators and staff to maintain a smooth operation and to always keep smiling. There are the suppliers, which are located all over the world. There are the franchisees. And there are the customers. In one package it a near-perfect picture of the American global capitalist system.

Well what do you know, Jeremy is a Microsoft-head, and I’m turning into Mcdonalds-one. One of several keys to franchising, I learned in a course I did with Jeremy, is to make every step so explicit, that you can write a manual about it an other people can follow it. This book is an example of evangelising a business-idea. And it’s great at that. Perhaps more to follow as I read the last pages of the book. All opinions on McDonalds aside, franchising is a great and easy way to get into running your own business, and a great way for your business to grow big.

Vincent is a co-author on Tech IT Easy. You can find out more about him on this blog’s initial announcement or on his blog. He enjoys a (fish-)burger and a milkshake about once a year. Ps. I’ll be leaving for a holiday in a few hours, so any responses to comments will be delayed by a few days.

Related posts:

1. Starbucks – an example of vertical integration
2. America – the land of process-innovation?
3. Risk Sharing Partnerships, solutioning offshore quality issues?
4. The Poor Man’s Business Model—How Out-of-the-Box thinking can generate tremendous value for customers
5. Dassault Systèmes soon to turn to B-to-C