In My Opinion The Ray Kroc Mock Interview

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By MichaelRead
April 30, 2002

[Editor's Note: The following is one of a series of mock interviews done by Fool Community member MichaelRead. It appeared on the McDonald's discussion board on April 30, 2002. Today's mock interview is with McDonald's founder Ray Kroc. Enjoy, and don't forget to sign up for your 30-day free trial!)]

The Interview That Never Happened: McDonald's Founder Ray Kroc

MichaelRead: Jumping right into it: What do you think of McDonald's today?

Ray Kroc: I'll answer that in a second, but first let me go back to the original McDonald's and why I was interested in them enough to buy them. They had volume. Now note this, Michael, they cooked up hamburgers, fries, and a soft drink or shake fast and cheap. A carload of people would come in, say a family or a slew of teens or both at once and they'd get their order in a few minutes. Ever work a grill?

MR: No.

RK: Pity. It's an experience. The grill is the center of it all. The McDonald brothers prepared everything in advance: patties were sized and ready for the grill, buns cut, and so on. Everything was at hand for the grill man. At the shakes station one person did nothing but make shakes -- the reason I came in contact with the McDonald brothers was because I was selling shakes machines and they needed more than they had since business was so good. Car loads and carloads of families and teens.

MR: Interesting history but I have to go back to my original question about your thoughts of McDonald's today.

RK: There's a reason for the history. Listen and listen hard, Michael, it has everything to do with McDonald's today. The company is cutting back on stores and Burger King and Wendy's are cutting into McDonald's market share. This is not a bad company, yet I wonder if the people have forgotten the means by which McDonald's became the market leader. How many burgers have you bought this year, Michael?

MR: I haven't counted. A few. Why?

RK: What's your favorite burger?

MR: I'd say the double Teenburger -- hold the tomato.

RK: Michael, Michael, Michael! That's A&W's. McDonald's has 13,000 plus restaurants with more than 10,500 run by owner-operators and you had to buy at A&W? Why not at one of mine? I'll tell you: taste and service.

MR: I have to get back to your view of McDonald's now. What would you do to improve the company? Enough to make me as an investor put money in the company.

RK: My view is out of favor. I think the company is trying too hard to be all things to all people. Do you know that there's a plan for a veggie burger? What's next, a tofu burger? It doesn't make sense. McDonald's is trying to be too many things to too many people. Ronald McDonald, our prime mascot is considered a fogy. We spent a lot of money on Hamburgler. Where's that? I think the present administration is trying to forget its roots. We had a product identification bar none and the company threw it away trying to make the stores everything to everyone. They see Ronald McDonald as a kids' icon and since they want more adults they've rid the commercials of him. Yet, Michael, if you look at the successful stores they have all the old icons in prime display.

MR: So, you'd change the promotion. However, a survey recently reported that time of food delivery was important and it's slow, and many said that the pictures advertising hamburgers had little resemblance to the product served.

RK: You know who gets blamed for this? The local owner-operators. Look, when we started I said to franchisees: 'Do it my way and you'll make money; don't and you won't.' However the company now is heavy-handing the owner-operators. Sure, I agree new equipment is needed, but not if this new equipment faults the program of getting a hamburger to the customer fast. You know George Cohon in Canada, don't you?

MR: He wrote To Russia With Fries. Nice man.

RK: Then you know that underneath that niceness there's a drive to make things work fast. When George opened the store in Moscow they had thousands the first day and no one, repeat no one, had to wait for their order. George and his people made sure that customers came away knowing the McDonald's experience. That's what the company should concentrate on right now: a good hamburger fast. Everything else falls into place when that's the objective. Too simple for you, Michael?

MR: No, not really. Don't the owner-operators see this?

RK: Damn right they do. The owner-operator is the heart and soul of McDonald's and if more were not pushed into schemes they know aren't effective at the counter they would be, I know, happier. If I were back in charge I'd make it a point to visit every store that isn't making money and find out why they aren't. I'll bet you a Big Mac that those in trouble aren't following those means that made McDonald's a choice. But note this, Michael, I would put all my effort into the owner-operator's than in any other area.

MR: We don't have much time left, but I do want to ask you about the staffing at McDonald's --

RK: Stop right there, Michael. I hate that word 'McJobs.' That's a word said by those not knowing a damn thing about running a successful McDonald's restaurant. Ask anyone and I mean anyone who's working or has worked for McDonald's about the training and the need for training. McDonald's is envied for how the company trains its people. Okay, for many it's their first job and they have to learn what service to a customer really means, but they do! I am very, very proud of the people working for us and equally proud of those who have gone on and, using what they have learned at McDonald's, become successful in other endeavors. Very proud.

MR: Thank you, Mr. Kroc. As is the custom of these "Interviews That Never Happened," you get the last word.

RK: In interviews in the past I would pass out a free coupon for a McDonald's hamburger, but this time you lose out, Michael. Last word? Don't rule out McDonald's too quickly. Sure, Burger King and Wendy's are doing well, but the reason they are doing so well is that they haven't forgotten what made them successful. You mentioned George Cohon's To Russia With Fries, but equally important is Dave Thomas' Well Done! In it, Dave talks about his MBA: Mop Bucket Attitude.

When administration forgets that it's the customer and only the customer that is important, a company suffers. When the customer wants a hamburger, fries, and a drink, and it doesn't come quickly, the company has forgotten its reason for being. It's not that the customer is king -- it's that the customer is the reason for being here. There's no other reason for being in business. That said, trying to cater to too many choices in the menu in an attempt to capture current favor is a mistake. If you look at the solid successes McDonald's has had you'll see that everyone was an adaptation of the core hamburger.

Last word? I'd bring back Ronald McDonald so fast your head would spin. For heaven's sake, Michael, take a tour of McDonald's restaurants and see how many don't have a Ronald McDonald. The owner-operators know that even though the company has played down Ronald the customers haven't. Last word? Get the hamburger into the customer's hands fast. Everything else is a waste.

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