The Trials And Tribulations Of The McDonalds Brothers

The McDonald's that has become a part of the fabric of American culture and fast food cuisine today was created by two brothers, but not without their fair share of challenges. When brothers Richard "Dick" and Maurice "Mac" McDonald set out into the wide world in the 1920s to seek their fortunes, they didn't know what life had in store for them, but they were determined to succeed. They hit upon several ideas before finding the one that would seal their success, but even the model that finally worked for McDonald's almost didn't make it because it was so different from the fast food experience that the people of the era had already embraced.

Even after the McDonald brothers decided it was time to sell their successful business, it wasn't without a few trials and tribulations. The person who bought it and ultimately made the chain the success we know today had a chip on his shoulder and was bent on avenging a perceived wrong dealt to him in the purchase process, and he did so through multiple avenues. Life didn't quite give the two brothers what you'd expect considering the success of the restaurant chain, and they handled the trials and tribulations they experienced in different ways.

Dick and Mac McDonald grew up in Manchester, New Hampshire. Their parents had immigrated to the U.S. from Ireland, and their father, Patrick, worked in the G.P. Crafts shoe factory as a shift manager for 42 years. Despite his lifetime of loyalty to the company, when Patrick lost his job at the shoe factory because he'd gotten too old, he was turned out without so much as a pension.

What happened to their father made a huge impression on the brothers. After seeing his lack of a monetary safety net in his old age, the brothers made a plan to make their first million before they turned 50. After all, they didn't want to end up out of work with nothing to fall back upon. So, they set out to seek their fortunes in California. After trying their hand at a couple of businesses, and learning through trial and error, the brothers eventually created a quick and efficient way of serving burgers. 

Determined to do better than their father and become millionaires, the brothers moved to Hollywood, first Mac went, followed by his younger brother Dick in 1926. Like so many before them, their hope was to make millions in the movie industry.

Being in Hollywood, it was easy enough to find a job in the movie industry. They started out doing jobs for Columbia Movie Studios, like moving movie sets, running the lights, and doing handyman sorts of jobs for silent movies. They were making only $25 a week, which is the equivalent today of about $430 a week when adjusted for inflation. Obviously, they weren't pulling in the kind of money they'd expected and couldn't seem to break into something more lucrative like directing.

Thus, their entrepreneurial spirit led them to try their hand at opening up a movie theater in 1930 in an L.A. suburb called Glendora, California. The Beacon Theater had 750 seats, and snacks were sold in the lobby. All would have been well if it hadn't been for the Great Depression that overtook the country. So, it turned out that their timing was bad, and the brothers' early efforts failed. 

Noticing that small food and drink stands like root beer stands were still doing decent business during the Great Depression, it made sense to get into the food business. However, it would take two false starts before they hit upon the idea for the McDonald's restaurant that we know today.

The McDonald brothers' first idea was to open up a hotdog and orange juice stand in 1937 near the airport in Monrovia, California. They called their octagonal stand the Airdrome. The oranges for their drinks came from cheaply obtained and abundant fallen Sunkist oranges. It was successful enough that they were able to open up two more of these stands and bring their parents on board to help run them. One was called the Giant Orange, and the other was the Wigwam.

While the hotdog and orange juice stands were doing fine, the brothers hit upon the idea to make a drive-through BBQ restaurant in the 1940s. They got a loan and moved their Airdrome hotdog stand structure to San Bernardino, California, to try to make more money with its rebirth. McDonald's Bar-B-Que had a much larger menu than their previous restaurant, 20 carhops wearing the old uniforms from the failed movie theater, and 125 parking spaces, per The Smithsonian. Despite being a BBQ restaurant, it had a total of 25 menu items. And with hamburgers suddenly becoming more popular, it turned out that customers were more often ignoring the BBQ on the menu in favor of hamburgers. Realizing BBQ wasn't what customers wanted, it was time to go back to the drawing board and focus on an idea for a restaurant that would sell what people seemed to really want: hamburgers, fries, and shakes.

In 1948, Inspired by how well the hamburgers at their BBQ restaurant had sold, the brothers decided to close down their BBQ restaurant and turn it into a drive-through hamburger stand. But they had some ideas about how to make it more streamlined, cost-effective, and much faster. Unfortunately, customers didn't embrace the changes right away.

Contrary to what other restaurants of the day were doing, they got rid of their carhops, pre-assembled food during down times, and found ways to use more mechanical technology in the kitchen, drawing upon the idea of the Ford car assembly line. New stainless steel grills could hold more burgers to satisfy more customers more quickly. The new restaurant had no dining room, so it could serve food in paper and plastic without having to wash as many dishes. Rather than having 25 items like the BBQ restaurant had, the brothers decided to only serve four food items: hamburgers, cheeseburgers, potato chips, and apple pie. Plus, they offered coffee and soft drinks. Machines dispensed exact amounts of condiments, and customers couldn't ask for menu item modifications.

At first, customers didn't want to go to get out and order at the window since there were no carhops. The customer base got so thin at one point that the brothers were asking employees to lure in more customers by parking in the front. It took a year for customers to realize just how quickly McDonald's could serve them and start visiting for fast food served more quickly, cheaply, and with better quality than elsewhere.

The brothers knew that they wanted a symbol to make their restaurant stand out, and Dick McDonald had the idea to incorporate two giant arches into the building design. The arches not only would be a part of the actual structure of the building but also turn the building into its own advertisement that would be a beacon motorists could see from the road.

The brothers had difficulty finding an architect willing to make the dream of the arches happen. The first architect rejected the idea of the arches altogether and didn't get the job. The second didn't get the job either because he didn't want to be told how to design the building and thought the arch idea was "hairbrained," according to The Smithsonian.

The architect who finally got the job was Stanley Clark Meston. While Metson hated the idea of the arches, he gave in and ultimately made them anyway. The original arches were on both sides of the building, virtually going through the building on each side. They were as golden as they are today, 25 feet high, and were trimmed in neon lights to make them visible at night. Dick also wanted the sign to proclaim how many hamburgers had been sold, with visions of the millions and later billions of burgers to come.

The McDonald brothers were already in the franchise business when Ray Kroc came into their lives in a big way in 1954. Budding new restaurateurs who were impressed by the McDonald's business model were chomping at the bit to get their hands on the franchise version of the restaurant rather than try to ferret out the restaurant's secrets and create something different.

When the McDonald brothers met Kroc, he was their milkshake machine salesman. Since McDonald's had 21 franchises and nine outlets at the time, Kroc was making more money selling his machines to McDonald's than to any other company. Seeing the chain's potential, he asked to become the brothers' franchise agent. By the next year, he'd created Franchise Realty Corporation and become a franchisee himself, opening up his first McDonald's in Des Plaines, Illinois. Within another year, he'd convinced the McDonald brothers to sell the whole chain to him.

The three had initially shaken on an agreement that the brothers would get 0.5% of gross sales and Kroc would get 1.9%. However, that never happened. By the time the brothers sold him the chain for $2.7 million, Kroc had become fed up with their demands and didn't like that he had to pay so much. So, there was no royalties agreement.

There was no royalty agreement in the final contract between Kroc and the McDonald brothers. Kroc said in his biography, "Grinding It Out: The Making of the first McDonald's, "If they had played their cards right, that 0.5 percent would have made them unbelievably wealthy" (via Daily Mail). Only, they made Kroc angry, and by the time they made the final sales agreement, the brothers were just trying to peacefully placate Kroc.

There was already a lot of tension from when Kroc was their franchise agent that carried over into the final sale. At first, the brothers asked for $2.1 million with royalties, but they ultimately sold it for $2.7 million. They originally discussed 0.5% in royalties under a handshake deal, which ultimately wasn't honored since it wasn't in the contract of the final sale. It seems that Kroc's anger came from the brothers deciding to take back their agreement to sell the very profitable original McDonald's location with the franchise, which Kroc had banked on. With 0.5% in royalties, the brothers could have had $15 million by 1977 and would have eventually been pulling in $305 million a year, per Daily Mail. In contrast, when the final brother, Dick, died, he left behind $1.8 million compared to the $500 million Kroc left behind.

When the McDonald brothers sold the chain to Ray Kroc, he felt like he'd gotten a raw deal by losing the original location. Thinking that the final deal was unreasonable, Kroc sought revenge by trying to ruin the last hamburger stand the brothers still owned.

Kroc also wasn't happy that the brothers demanded cash. According to Time, when all was said and done, Krok said buying McDonald's cost him $14 million between the money he gave to lenders, partners, and his secretary. The group that funded the purchase demanded 6% interest yearly and 0.5% of all the gross sales. To compound the sting of the cost in Kroc's mind, the McDonald brothers wanted to keep their original San Bernardino location, which was making $100,000 a year. Thus, Kroc felt especially cheated out of not getting this location as part of the deal because he had depended on it to help pay back his loans.

As revenge, Kroc opened up one of his new, more modern McDonald's restaurants across the street from the old-fashioned original restaurant with the arches built into the structure of the restaurant. Kroc forced the brothers to change the name of their original restaurant because it conveniently was left out of the sales contract. As Mac's Place, it didn't do as well, and it went out of business after six years. Today, the first McDonald's is an unofficial museum that you can visit and it includes some of McDonald's rarest and most collectible items, many from before Kroc got involved.

It wasn't until 1964 that the McDonald brothers' hometown finally got a McDonald's. That was long after they'd sold the franchise to Ray Kroc.

When McDonald's finally came to Manchester, New Hampshire, it was only a block away from the home Dick and Mac McDonald left to seek their fortunes all the way back in the 1920s. By that time, there were McDonald's everywhere, and it was one of many as the chain's 596th location.

At the time McDonald's showed up in Manchester, Dick was living just five or so miles away with his high school sweetheart, whom he had married. Meanwhile, Mac was still living in California. However, since he was no longer the owner of McDonald's, Dick had to wait in line and pay like an ordinary person to make his first McDonald's order in his hometown (much to his grandson's disappointment), per what Dick once told the Associated Press (via Weebly).

When Ray Kroc wrote his biography, he held himself out to be the creator of McDonald's. He portrayed that first McDonald's location he was a franchise owner of in Des Plaines, Illinois, in 1955 to be the very first McDonald's ever. As such, he conveniently ignored the fact that the McDonald's brothers existed and had actually opened up the first McDonald's seven years earlier in San Bernardino, California.

The McDonald's brothers and other family members were not happy about how Kroc had rewritten history. In every way, Kroc went about depicting himself as the one who created the chain. He even went as far as to put his name on McDonald's placemats and make sure his image was in every store on a plaque. Although, in his book, he does express his disdain for the brothers. So, it was all about how he spun his founding tale.

Decades later, Dick McDonald told The Wall Street Journal (via the New York Times), "Up until the time we sold, there was no mention of Kroc being the founder. If we had heard about it, he would be back selling milkshake machines.”

Once Ray Kroc took control of McDonald's, everything was about him. There was even a Founder's Day that came around every year, which was created solely to celebrate the false story of Kroc being the supposed founder. And every year, according to the Daily Mail, Kroc would send a newspaper announcement about Founder's Day to the brothers to gloat over his glory.

Although Kroc had been dead since 1984, Founder's Day had still been all about him until 1991. Finally, that year, the company officially began recognizing the McDonald brothers in their television ads. Still, the company was careful how they worded what "founding" meant. McDonald's senior chairman, Fred Turner, told The Sun in 1991 (via Weebly), "They are founders, they founded the concept. Ray Kroc founded the company that developed that concept into the largest food service organization in the world" and made a name for the brand. Ultimately, Turner said, "This founder business has become an issue. It's embarrassing for the system, quite frankly. ... There ought to be enough credit to go around."

After 30 years, the brothers finally got the credit they deserved in national ads. As a bonus, the company also added a plaque at the first McDonald's in the San Bernardino location to celebrate the McDonald brothers' original restaurant.

Although the McDonald Brothers hadn't owned the McDonald's chain since they sold it to Ray Kroc in 1956, that decision haunted one of the brothers more than the other. In fact, it possibly played a part in Mac McDonald's death.

Dick McDonald was fairly confident about his sale of the chain to Kroc, as he didn't like the idea of having to deal with the financial aspect of owning so many locations. He said, "I would have wound up in some skyscraper somewhere with about four ulcers and eight tax attorneys trying to figure out how to pay all my income tax" (via The New York Times).

Mac McDonald came away with a different sentiment, with family members telling the Daily Mail that his future heart problems were related to having been cheated out of royalties from the McDonald's sale and being upset about the loss of the original restaurant. Mac finally died from heart failure in 1971 at 69 years old. To put his death in perspective, Dick didn't die for another 27 years (1998). He was 89 years old.