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What "The Founder" can teach all of us

Discussion in 'General Mindset, Motivation, Beliefs' started by Andy Daniels, Aug 26, 2017.

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  1. Andy Daniels
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    Andy Daniels Bronze Contributor Read Millionaire Fastlane I've Read UNSCRIPTED Speedway Pass

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    I just finished watching The Founder for the 3rd time, and WOW talk about a great film! Michael Keaton delivers an awesome performance as Ray Kroc.

    Kroc's simple method for success was just one word: Persistence

    I think this is absolutely brilliant, given that so many would-be entrepreneurs give up so quickly hoping to skip the process and go straight to the event. Nothing worth having in this life comes easy, and this movie illustrates that perfectly.

    It's certainly something to watch to give you a slap of inspiration and reality.

    If you want something, if you REALLY want something, you must be persistent, and whatever roadblocks come up, you gotta keep climbing.

     
  2. SparksCW
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    SparksCW Bronze Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass

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    I saw that too, thought it'd be a bit bland but it ended up being one of my favourite films.

    Persistence for sure, but that's not the biggest take away from the film.

    The biggest take away for me is to focus on what will actually make the money.

    He was persistent but wasn't making money, then once enlightened to how the property would make the real money, coupled with more persistence, then the results came..

    I'm not saying money is in the property, I'm saying find the thing that will make the money, and be persistent with that. Guess it's the same as the 80/20 rule!
     
  3. JasonR
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    I got something completely different out of the movie: don't make bad deals. In the movie Kroc completely screwed over the McDonald's brothers. However, the movie isn't quite true to real life as it seems (google).

    My major takeaway is: don't make bad deals and watch out for guys like Kroc.
     
  4. Inuc
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    Inuc Contributor Read Millionaire Fastlane

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    Be Persistence
    Have the right network ( until Kroc and the brother connected, they seem to be struggling in their various business).
    Have the right team (Kroc was good in some aspect, the brother in their kitchen while the accountant brought in the best advise)
    Lastly, it is all about the money (seem harsh on the brothers, but look at today's business world and you will business that are rigis to change being swallowed up by technological advancement)
     
  5. biophase
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    Where would the McDonald's brothers be without Ray Kroc? Would they have made $1,000,000 each? Or would they have had a single restaurant and we would never have heard of them? Because of Ray, we know who they are years after their deaths and their names will forever be remembered.

    I didn't see any good or bad guys in this movie. The 2 brothers built a great system but obviously could not expand it and would have never done so if Ray did not come along. I doubt they would have gone anywhere.

    The brothers made him head of franchising but then did not care about the franchisers making money. They should make decisions that allow the franchisers to thrive instead of shooting down good ideas. That's where Ray helped them the most.

    I also think Ray's purchasing the land under was fine. It's not like the brothers would have ever come up with that idea.

    Basically two different types of people. The 2 brothers were fine running a single restaurant and getting by. Ray wanted a huge empire. Both had different goals. And we all knew that the handshake deal was never going to happen. Would have been out of character for Ray.
     
  6. luniac
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    basically what MJ said, the "fastlane to nowhere"
     
  7. lewj24
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    That is equivalent to $8 million after taxes for each McDonald brother if you adjust for inflation.
     
  8. TheRegalMachine
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    The McDonald brothers screwed The McDonald brothers.
    Ray Kroc not making good on a hand shake deal that may or may not have even happened has made many people see him as the quintessential evil rich guy.
    Give "Grinding It Out" a read.
    The McDonald brothers were no saints. They were pair of apprehensive, hands off, nitpickery ""businessmen" who sabotaged Ray Kroc's efforts constantly.
     
  9. TheRegalMachine
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    In my opinion that's the makings of a nightmarish business partnership.
    One partner wants to go all in and make shit happen, the other two want to play it safe and aren't interested if the business advances or stagnates.
    Ray Kroc was doing the real foot work while the brother sat back home calling the shots and adding jack shit to the partnership while reaping the bulk of the reward.
    I have very little sympathy of the McDonald brothers. I feel Ray Kroc was just in his usurping control of the company.
     
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    Same for me - It shows a good idea isn't enough.

    Ray Crock knew he had a winning idea that delivered value to the public and to the franchisees. He persisted with a growth mentality thinking if we just get to x stores, everything will work out.

    One problem was he gave too much control to the franchisees (from a starting point of low control being under the thumb of the brother's strict contract). Franchisees could violate the execution plan without fear of repercussions - hurting the brand.
     
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    True. A lot of people only think Ray took something from the brothers (I initially did too), but he also created and gave back a lot.

    My take is, always think what other people want and see if their interests align with yours in any deal. When he first partnered with wealthy retirees the restaurants didn't do well because these people only wanted the return instead of putting in real effort. It's when Ray found younger, aspiring people that the franchise took off.
     
  12. 100k
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    Saw it last night.

    Quite a few good lessons from it; many of them are taught by our great teacher M.J.

    1) Stop chasing money and trying to make a quick buck. Provide REAL value (Kroc was struggling selling shitty products and had a negative reputation with the banks because of it).

    2) 80/20 rule; find out what is selling, find out what's not. And focus your energy on whats selling and cut the rest.

    3) Being great at sales doesn't matter if all you have to offer are shitty products. Seems to be great at selling, the problem was that the products he was selling didn't provide any real value to people and that was the reason why he couldn't go anywhere for a long time.

    4) Systems, Systems, Systems. They make all the difference. 3 Words: Standard Operating Procedure. That's what allowed McDonald's to deliver food in 30 seconds compared to the 30 min. every other restaurant was delivering food at.

    5) Branding is key. What makes YOU different. What value is stored in your brand; what do you promise to deliver? The McDonalds brand promises to give you the same decent tasting burger, fries and shakes at their location in less than 3 min. in a family friendly and clean environment. Make sure your brand stands for something and ALWAYS deliver what you promise.

    6) Fix problems. The McDonalds brothers set out to fix some of the most common problems they found at drive-in restaurants.
    Things like slow delivery of food; they created a system for that and now can deliver food in less than 60 seconds. Costly utensils... they scrapped that all together; no glasses, no plates, no forks... everything comes in wrapping or plastic that is used once and then scrapped; that saved them money by not needing to waste money on washers. Waiters - got rid of them, and now you pick up your own food. Juke Boxes that played music and attracted bad-ass teenagers that don't spend a lot of money and just waste time; got rid of the juke boxes and made the place a family friendly environment. etc.

    7) Disrupt the industry! Why the heck do you need waiters, washers, juke boxes, plates & utensils? Get rid of it and get lean. Create systems to cut down delivery speed and improve efficiency.

    8) You need a council of advisers. Without them you can't protect yourself from sharks, being sued, new laws/requirements etc.

    Without the chance meeting of mister Harry Sonneborn, Mr. Kroc would never have solved his money problem and been able to turn his little franchise business into a giant corporation that operated on a global level. Have a council of smart people; lawyers, board members, accountants, consultants and financial experts.

    9) The business world is ruthless. And you need to be prepared to go toe to toe with the sharks and the tigers or you need to step out of the battle arena.

    10) Contracts should be air tight. The McDonalds brothers were f*cked out of $100 mil+ in annual royalties because they believed that a hand shake meant something.

    11) If you want to really take off, you need to learn how to raise capital.

    TL;DR Over-all, a decent movie with a lot of lessons to teach.
     
  13. PetePreneur
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    I took away 2 key lessons from it all:

    1. Focus purely on where the money is. This was brought up when the McDonald's brothers said that they focussed on hamburgers only because they were making 87% of their sales from them. This allowed them to be more efficient and make it a fast food restaurant.

    2. The business model is extremely important. This was brought up when they changed it from taking a percentage of each burger sale, to changing it to a retail/leasing structure that allowed him to start making a profit.
     
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    Good point, and you're probably right.

    From my point of view I would have never made the deal they made in the movie (I have doubts as to how true to life the movie was), and I think that's why I was upset about what Ray Kroc did. Perhaps it's Hollywood simply vilifying Ray Kroc for the movie.

    I'm going to give this one a rewatch, after all I was in and out of sleep on an overseas flight.
     
  15. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Admin Post
    Ya mean Hollywood casting the entrepreneur/business owner as an evil rich guy? Nawwwww....
     
  16. JScott
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    Don't believe everything you see in movies...

    In real life the MacDonald brothers had 8 restaurants and had sold 20 franchises before Ray Kroc came along.

    Would they have been as big without Kroc? Probably not. But, to say that they would have been a single restaurant without a legacy is unlikely true as well.
     
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    If they had invested it in the S&P they would be retiring rich in 2018
     
  18. Fred Chevry
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    I don't remember if it's from Unscripted, but I can't unsee that virtually all business men in movies are evil LOL.

    Edit: Nope it's not, but it's from one of your suggestions: "Thou Shall Prosper by Rabbi Daniel Lapin! Thanks for that @MJ DeMarco
     
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    Yes, they did mention that in the movie. But they also said that they weren't successful and consistent in their offerings. So I guess depends on how those franchises really did.

    If what the movie showed was true of the McDonalds brothers first franchises and also how Kroc's first franchises went, they would have all failed or went back to the drive in style restaurant.
     
  20. TheRegalMachine
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    All movies based on real events are spiced up, have things omitted, and/or out right lie.
    The Founder is no different. It doesn't even acknowledge that Ray Kroc had children and was married multiple times before Joan his last wife. They wanted to play up the long suffering wife gimmick so all of that was left out. (The attempt failed imo because the character Ethel came off as un-supportive and selfish. But was a great example of the spouse who doesn't understand their ambitious entrepreneur partner.)

    I really suggest reading "Grinding It Out" along with watching "The Founder" because you can kind of see the truth between the two accounts.
     
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  21. ZF Lee
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    One major lesson I took was that 'Don't fucking reinvent the wheel'.
    I'm going to say that McD's execution strategies such as a duel cashflow strategy (real estate leasing and sales of fast food combined) and SOPs for speedy prep of food have had its basis long ago.

    Real estate transactions have been practised since time immortal.
    Production of food can be likened to an Industrial Revolution style of manufacturing physical products.
    Many of McDonald's concepts were there long before Ray Kroc came along.

    Thus, I think we may need less creativity than we fear it might take...we just need to know our aims and challenges and use available methods or strategies to solve them. As I understand, true creativity as hyped by traditional SCRIPT media is in reality hard to nurture...thus we can't hope for it to be a bread and butter kind of thing.

    Another lesson is 'Work on the business, not in it.'
    Although Ray did work with the McDonald brothers, he didn't need to be a worker there at the burger friers. But he was involved in financing and prospecting for franchisees. Had he been tied to the actual running in the day-to-day operations, he wouldn't be able to have time or energy to solve its external problems.

    Finally, the last lesson is simple. 'Monogamy'
    There's a lot of talk on how Ray Kroc screwed people by putting up powdered milk instead of fresher but more expensive milk.
    While its a legitimate claim, this is the fast food industry. The USP here is fast and convenience.
    McDonald's excelled best not just because of the financing techniques, but also because they stayed true to their USP, when they could have swayed away to something else.
    And when you stay true to your USP, the promise you give to your customer, they will honour your dedication by coming back.

    On a separate note, I think the refusal of Ray Kroc to give royalties to the brothers might be justified.
    They were not going to be part of McDonald's operations to provide value. It was a cash out.
    If you don't play the game, you don't win it.
    The money could have dedicated to perfecting more products and upgrading infrastructure rather than throwing it at some people who chose not to have anything more to do with the project.

    And of course, their refusal to have everything black and white and demand for rent in terms of royalty (MJ spoke a lot of it in UNSCRIPTED) shows that their work traction must have fell to pieces. Jeez I hope I don't end up like that...gives me the chills!

    But of course, I wouldn't encourage screwing people with such tactics. But in this case, Ray Kroc needed to eliminate the last barriers to satisfy the commandment of Control; the founders. Founders will criticise you like crazy at times if you were in Kroc's shoes. And if you can eliminate them legally, cost efficiently, why not? And they still got paid millions, and in those days, it was quite a bounty considering the purchasing power of that time.

    Reminds me of Colonel Sanders from KFC, who at least held onto Canadian franchises and appearance payments, which were quite lucrative too. Last word on founders or first-comers: Pioneers get shot, settlers get rich lol.
     
  22. TheRegalMachine
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    Here's the great part about Ray Kroc, He knew the Speedy System and recipes by heart. He was very hands on, as a matter of fact he had to train the franchisees who then trained the employees. There are many moments in Grinding It Out where hes in the stores doing things. In chapter 6 he tires to show someone the McDonald brother blanching process and it kept producing mushy fries. Even the Brothers couldn't help him over the phone. He literally had to figure it out on his own and changed the recipe/process. This was a violation of the McDonald bros contract that stated everything had to be the same and nothing can change unless they say.
    I feel this is why Ray Kroc didn't give them residuals. Ray was always on the battlefront. Even when he became CEO he would stop into locations and get to know the people there.
    The McDonald brothers had no idea who any of the franchisees were and they didn't know them.
    They didn't bring anything to the table.
    This is another lesson the story of the McDonald brothers can lend: Never be come the faceless master in an ivory tower.
    Ray knew the employee's needs, their wants, their struggles because he took the initiative to experience what they do. On top of that he was making deals across the board.
    In his book, by his account, the brothers changed the deal which might have lead to him not honoring the hand shake deal *if it existed*.
    In the original deal they both would split $2.7 million, hand over all the rights, and all stores (at the time they still had control of many of the stores before Ray started buying the land before building restaurants.). They changed the deal asking for the original store, Ray complied, then they asked for .5% of gross sales. McDonald's Corp was still borrowing money so to give them anymore than would have pissed off the host of people funding the company. Plus Ray Kroc wasn't too fond of the brothers as it were. They were pushing it.
     
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    just saw the movie.

    based on the movie alone, ray croc is a bastard. I was on his side until the one crucial scene, the instamix scene.
    It was the very moment he took a sip of the bullshit powder instamix and said "tasted like a damn good milkshake to me" or whatever his line was.
    That right there was him saying that he is OK with sacrificing quality for profit.
    It was all downhill from there like his comment to the brother over the phone, "if I see a fellow competitor drowning ill stick the water hose in his mouth".

    And what Ray Kroks legacy? a restaurant chain universally known to be low quality "food" that'll slowly kill you.

    Was it worth it Ray? was it?

    and what's all the attention to the name McDonalds, yea its a great name but I think the real winner is the speedee system, the fast service that revolutionized what a restaurant could be.

    And yes of course I respect "the hustle" at 50+.
     
    Last edited: Aug 30, 2017
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  24. TheCj
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    Interesting movie, I think the brothers dropped the ball when Kroc wanted to renegotiate his deal. Can't remember exactly but i think it was before he had started with the land company. At the end he treated them how they had treated him in terms of negotiating. Is hard to believe they would only agree with a handshake on the royalty. Especially since the one brother is a stickler for details.

    Of course this is just based on the movie and a little bit of googling.
     
  25. lewj24
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    The main thing I learned was how important it is to own the real estate. Kroc basically owned McDonalds and could do whatever he wanted because he owned all of the land underneath almost every one, leaving the brothers with one option, sell Kroc's business to Kroc.

    I had never thought about this situation before this movie and later read Sam Walton got kicked out of his first Ben Franklin store because his lease was up and they didn't want him back. (He went on later to buy stores with 99 year leases)

    I still don't understand this. Yes someone else owns the land so they can evict you. Makes sense. But don't you own the building? Everything inside? How can they just 'kick you out'?

    What am I not understanding here?
     
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