[SPEAKER_00]: San Bernardino, California, summer 1954.
[SPEAKER_00]: A man stands at a parking lot.
[SPEAKER_00]: He's 52 years old.
[SPEAKER_00]: He sells milkshake machines for a living.
[SPEAKER_00]: He's not rich, he's not famous.
[SPEAKER_00]: His business is dying, and he's staring at a small strange building, white tile, stainless steel, to enormous golden arches bolted to the roof.
[SPEAKER_00]: A hundred people are in line, not sitting, standing, waiting at a window.
[SPEAKER_00]: No waitresses, no menus, no silverware, just burgers, fries, milkshakes, 15 cents a burger, and the line moves fast, impossibly fast.
[SPEAKER_00]: the milkshake salesman watches this for an hour.
[SPEAKER_00]: Then, too, he can't look away.
[SPEAKER_00]: He walks up to the owners, two brothers.
[SPEAKER_00]: He asks, "'My God, when will this die down?''
[SPEAKER_00]: As some time later tonight, one of the mansors.
[SPEAKER_00]: The salesman's name is Ray Crock.
[SPEAKER_00]: The brother's name is McDonald.
[SPEAKER_00]: and within seven years, crock will own everything.
[SPEAKER_00]: The name, the system, the whole empire.
[SPEAKER_00]: The brothers will own nothing, not even the right to put their own name on their own restaurant.
[SPEAKER_00]: This is the story of how one man took the most recognizable brand on earth from the two men who built it.
[SPEAKER_00]: It's not a heist with guns, it's a heist with contracts and a handshake that may have been worth billions.
[SPEAKER_00]: This is Corporate Wars, and this is the Golden Heist.
[SPEAKER_00]: Act 1.
[SPEAKER_00]: Two brothers from New Hampshire.
[SPEAKER_00]: We'll come back to that parking lot, but first we need to go back 50 years, and 3,000 miles east.
[SPEAKER_00]: Manchester, New Hampshire, nearly 1900s.
[SPEAKER_00]: It's a factory town, textiles, shoes, brick buildings, and smoke.
[SPEAKER_00]: 20,000 people work in the shoe industry alone.
[SPEAKER_00]: One of them is a man named Patrick
[SPEAKER_00]: Patrick is Irish.
[SPEAKER_00]: His wife Margaret is also Irish.
[SPEAKER_00]: They came to America as children.
[SPEAKER_00]: Their Catholic working class and they have five kids, three girls and two boys.
[SPEAKER_00]: The older boy is Maurice.
[SPEAKER_00]: Born November 1902.
[SPEAKER_00]: Everyone calls him Mac.
[SPEAKER_00]: the younger boy is Richard, born February 1909.
[SPEAKER_00]: Everyone calls him Dick.
[SPEAKER_00]: Seven years between them.
[SPEAKER_00]: They're close anyway.
[SPEAKER_00]: Patrick works as a shift manager at the GP Crafts shoe factory.
[SPEAKER_00]: 42 years he gives that place.
[SPEAKER_00]: 42 years of showing up, of being reliable, of doing the job.
[SPEAKER_00]: And one day they tell him, he's done, two old, that's the reason.
[SPEAKER_00]: No pension, no severance, just a handshake, and the door.
[SPEAKER_00]: Mac and Dick watch this happen.
[SPEAKER_00]: They watch their father's face, and something hardens in them.
[SPEAKER_00]: Dick said it later, played as anything.
[SPEAKER_00]: They make a pact.
[SPEAKER_00]: Each brother will be a millionaire by 50.
[SPEAKER_00]: They'll never let some company own their future.
[SPEAKER_00]: Hollywood.
[SPEAKER_00]: Mac heads to California first.
[SPEAKER_00]: It's the mid-1920s.
[SPEAKER_00]: Dick follows a couple years later.
[SPEAKER_00]: They're part of a wave.
[SPEAKER_00]: Thousands of young Americans pouring into Southern California chasing something better.
[SPEAKER_00]: The brothers have a specific dream.
[SPEAKER_00]: They want to make movies.
[SPEAKER_00]: They land jobs at Columbia Movie Studios.
[SPEAKER_00]: This is Harry Cone's shop.
[SPEAKER_00]: One of the scrap your Hollywood outfits.
[SPEAKER_00]: Not MGM, not Paramount, Columbia.
[SPEAKER_00]: The work is brutal.
[SPEAKER_00]: Halling sets, running lights, handyman jobs on silent film productions.
[SPEAKER_00]: $25 a week.
[SPEAKER_00]: That's what they make.
[SPEAKER_00]: And there's no ladder to climb.
[SPEAKER_00]: No paths set from holler to director.
[SPEAKER_00]: Not at Columbia.
[SPEAKER_00]: Not for two Irish kids who are Manchester with no connections.
[SPEAKER_00]: So, they pivot.
[SPEAKER_00]: Still entertainment, but a different angle.
[SPEAKER_00]: It's a 750-seat place in Glentore, California, 20 miles east of L.A.
[SPEAKER_00]: They rename it, The Beacon.
[SPEAKER_00]: The year is 1930, which is a spectacularly bad year to open a movie theater.
[SPEAKER_00]: The Great Depression is swallowing the country whole.
[SPEAKER_00]: Nobody has money for movies that brothers can barely
[SPEAKER_00]: They bury silverware in the backyard because they don't trust the begs to stay open.
[SPEAKER_00]: Seven years, they hold on.
[SPEAKER_00]: Seven years of double features at news wheels and a snack bar that does okay, but never enough.
[SPEAKER_00]: But, during those lean years, they notice something.
[SPEAKER_00]: There's a food stand in town, just a little place, burgers and soda, and it's always busy.
[SPEAKER_00]: Depression or no, kids have pocket change, and they spend it on hamburgers.
[SPEAKER_00]: In 1937, the brothers self-letheter, they're done with Hollywood.
[SPEAKER_00]: They build a small, open-air hotdog stand near an airfield in Monrovia.
[SPEAKER_00]: They call it the Air Genome.
[SPEAKER_00]: They buy fallen oranges from Sunkist at a discount, 20 dozen for a quarter.
[SPEAKER_00]: They squeeze juice by hand and sell hot ducks to people who have come to watch the planes.
[SPEAKER_00]: It's not glamorous, but it works.
[SPEAKER_00]: San Bernardino
[SPEAKER_00]: In 1940, the brothers make their big move.
[SPEAKER_00]: They take a $5,000 bank loan and open a real restaurant.
[SPEAKER_00]: 60 miles east of LA in a growing, working-class city called San Bernardino.
[SPEAKER_00]: Population, $100,000.
[SPEAKER_00]: They call it McDonald's Barbecue.
[SPEAKER_00]: It's a drive-in.
[SPEAKER_00]: 25 items on the menu.
[SPEAKER_00]: barbecue ribs smoked with hickory chips from Arkansas, 20 car hops in a uniform, 125 parking spaces.
[SPEAKER_00]: It's exactly like a hundred other drive-ins across California, except it's making serious money.
[SPEAKER_00]: By the mid-40s McDonald's barbecue is the number one hangout in San Bernardino.
[SPEAKER_00]: annual sales taught $200,000, the brothers split 50 grand a year in profit.
[SPEAKER_00]: They buy Cadillacs, they buy a house on a hill, they're not millionaires yet, but they're getting there.
[SPEAKER_00]: And then they start to notice problems.
[SPEAKER_00]: Barbeque, expensive to make, slow to prepare, and nobody orders it.
[SPEAKER_00]: hamburgers, that's what sells.
[SPEAKER_00]: The cheapest item on the menu.
[SPEAKER_00]: The car hops, slow, unreliable, more interested in flirting for tips than taking orders.
[SPEAKER_00]: The China and the Silverware, getting smashed or stolen constantly.
[SPEAKER_00]: The customers, increasingly rowdy teenagers, not
[SPEAKER_00]: and now their imitator drive-ins opening all over town, margins are getting squeezed, high costs, low prices, and the wrong clientele that brothers stare at the numbers, and they arrive at a conclusion, the drive-in model is broken.
[SPEAKER_01]: Act 2.
[SPEAKER_00]: The Invention late 1948.
[SPEAKER_00]: The brothers close the restaurant.
[SPEAKER_00]: They send the car hops home.
[SPEAKER_00]: They've locked the doors.
[SPEAKER_00]: For three months, McDonald's goes dark.
[SPEAKER_00]: What happens
[SPEAKER_00]: Before they rebuild the kitchen, the brothers need to redesign it, and they don't do it on paper.
[SPEAKER_00]: They rent a tennis court.
[SPEAKER_00]: With sticks of chalk, they draw the kitchen at full scale on the court's surface.
[SPEAKER_00]: Every grill, every counter, every station.
[SPEAKER_00]: Then they bring in their workers.
[SPEAKER_00]: And for six hours, grown men
[SPEAKER_00]: they move imaginary equipment, they shuffle stations, they run drills, over and over, testing every arrangement, every sequence of movement, until they find the most efficient layout possible.
[SPEAKER_00]: It's Henry Ford's assembly line, applied to a kitchen.
[SPEAKER_00]: Nobody has ever done this before.
[SPEAKER_00]: When the brothers reopen in December 1948, the restaurant is unrecognizable.
[SPEAKER_00]: The menu slashed from 25 items to nine.
[SPEAKER_00]: Hamburger's, cheeseburgers, three drinks, milk, coffee, chips, and pie.
[SPEAKER_00]: That's it.
[SPEAKER_00]: The car hops, God, all 20 of them, fired.
[SPEAKER_00]: the silverware, gone.
[SPEAKER_00]: Paper wrappers at paper cups now.
[SPEAKER_00]: The barbecue pit.
[SPEAKER_00]: Also gone.
[SPEAKER_00]: In their place, a system.
[SPEAKER_00]: One man grills burgers.
[SPEAKER_00]: Another man adds condiments.
[SPEAKER_00]: At one man makes shakes.
[SPEAKER_00]: Every burger is identical.
[SPEAKER_00]: Mustard catch up onions.
[SPEAKER_00]: Two pickles.
[SPEAKER_00]: No substitutions.
[SPEAKER_00]: Dick McDonnell explained it simply.
[SPEAKER_00]: If we gave people a choice, there'd be chaos.
[SPEAKER_00]: Burgers are cooked in advance, wrapped and held under heat lapse, a customer orders, 30 seconds later, they're eating.
[SPEAKER_00]: The old-driving model, 20 minutes per order.
[SPEAKER_00]: The new system, half a minute.
[SPEAKER_00]: and the price, 15 sets for a hamburger, half of what competitors are charging, because when you eliminate waitresses, dishwashers, but 25 item menu, and real silverware, near costs, cut laps.
[SPEAKER_00]: What's left is volume, pure, fast, cheap volume.
[SPEAKER_00]: Dick called it the speedy
[SPEAKER_01]: the strungle, then the flood.
[SPEAKER_00]: At first, it's a disaster.
[SPEAKER_00]: Customers drive up and wait.
[SPEAKER_00]: Nobody comes to their car, so they leave.
[SPEAKER_00]: The fired car hops show up to HECKLE.
[SPEAKER_00]: When we get our uniforms back, regulars ask when the old system is coming back.
[SPEAKER_00]: The brother is whole.
[SPEAKER_00]: and then a new crowd appears, not teenagers, families, working class mums and dads who can feed the whole family for pocket change.
[SPEAKER_00]: Kids who walk up to the counter with a quarter and feel grown up ordering their own food.
[SPEAKER_00]: One of the first employees, Art Bender, remembered it clearly.
[SPEAKER_00]: Kids would come in with coins clutched in their fists.
[SPEAKER_00]: They could still see their mother in the car.
[SPEAKER_00]: But, they felt independent.
[SPEAKER_00]: By 1952, the brothers are making more money than ever.
[SPEAKER_00]: They're ready to grow.
[SPEAKER_00]: So, they hire an architect.
[SPEAKER_00]: The Golden Arches.
[SPEAKER_00]: The architect's name is Stanley Clark Mesta.
[SPEAKER_00]: He designs them a franchise where he building, red and white tile, stainless steel, neon, everywhere.
[SPEAKER_00]: It's sharp, it's modern, it's clean.
[SPEAKER_00]: But Dick McDonald wants something more.
[SPEAKER_00]: He wants two giant arches, 25 feet tall,
[SPEAKER_00]: Mestre hates them.
[SPEAKER_00]: His exact words were, I'll put the damn things in, but don't tell anyone I was involved."
[SPEAKER_00]: A signmaker adds yellow neon to the arches, and, just like that, the most recognizable commercial symbol on the planet is bored.
[SPEAKER_00]: Mestre's offered a choice, a flat fee, or royalty
[SPEAKER_00]: That might be the second worst financial decision in this entire story.
[SPEAKER_00]: The brothers self-14 franchises.
[SPEAKER_00]: Ten become operating restaurants.
[SPEAKER_00]: The first opens in Phoenix, Arizona.
[SPEAKER_00]: It works.
[SPEAKER_00]: The system is replicable.
[SPEAKER_00]: The brand travels.
[SPEAKER_00]: But Mac and Dick don't want an empire.
[SPEAKER_00]: They like their lives.
[SPEAKER_00]: They like their catalogs and their small elegant operation.
[SPEAKER_00]: Their restaurant met, not corporate executives.
[SPEAKER_00]: This is the cap of the armor.
[SPEAKER_00]: This is where someone gets in.
[SPEAKER_00]: Act 3.
[SPEAKER_00]: This salesman.
[SPEAKER_00]: Now, we need to talk about the man in the parking lot.
[SPEAKER_00]: Raymond Albert Crock.
[SPEAKER_00]: Born October 5, 1902.
[SPEAKER_00]: The same year is Mac McDonald.
[SPEAKER_00]: Oak Park Illinois.
[SPEAKER_00]: A summer of Chicago.
[SPEAKER_00]: His parents are Czech immigrants.
[SPEAKER_00]: His father-alloy's came from a village near Rocketsanti in Bohemia.
[SPEAKER_00]: crock is not an inventor, and he's not an engineer.
[SPEAKER_00]: He's not even a particularly original thinker.
[SPEAKER_00]: What he is from the very start is a salesman, a relentless, compulsive, never stop talking salesman.
[SPEAKER_00]: As a kid, he runs a lemonade stand.
[SPEAKER_00]: He works in a grocery store.
[SPEAKER_00]: He sells
[SPEAKER_00]: At 15, he lies about his age to join the Red Cross Ambulance Corps during World War 1.
[SPEAKER_00]: Get sent to Connecticut for training.
[SPEAKER_00]: His bunkmate, a kid, named Walt Disney.
[SPEAKER_00]: The war ends before either of them ships out.
[SPEAKER_00]: After the war, crock bounces.
[SPEAKER_00]: paper cup salesman.
[SPEAKER_00]: That last one sticks.
[SPEAKER_00]: He joins the Lily Toulip Cup Company and stays for 16 years.
[SPEAKER_00]: He's methodical.
[SPEAKER_00]: He's persuasive.
[SPEAKER_00]: He becomes their top salesman in the country.
[SPEAKER_00]: And somewhere in there, he meets a man named Earl Prince.
[SPEAKER_00]: Prince has invented a machine,
[SPEAKER_00]: five shakes at once.
[SPEAKER_00]: He calls it the multi-mixer.
[SPEAKER_00]: Crocs sees it and something clicks.
[SPEAKER_00]: He quits Lily Tulip.
[SPEAKER_00]: He buys the exclusive distribution rights.
[SPEAKER_00]: He finds his own company, Prince Castle Sales.
[SPEAKER_00]: For 17 years, Ray Crocs drives across America, selling multi-mixers to diners and soda
[SPEAKER_00]: But by the early 1950s, the business is dying.
[SPEAKER_00]: Americans are leaving the cities for the suburbs.
[SPEAKER_00]: The downtown soda fountains are closing.
[SPEAKER_00]: Croc is losing customers by the dozen.
[SPEAKER_00]: He's 52 years old.
[SPEAKER_00]: His hair is thinning.
[SPEAKER_00]: His marriage is strained.
[SPEAKER_00]: His big bet on the multi-mixer looks like a losing one.
[SPEAKER_00]: and then he sees it in his order book, a single restaurant in San Bernardino, California, ordered eight multimixers, eight.
[SPEAKER_00]: That's 40 milkshakes at once.
[SPEAKER_00]: Who needs 40 milkshakes at once?
[SPEAKER_00]: The parking lot.
[SPEAKER_00]: so now we're back where we started.
[SPEAKER_00]: It's the summer of 1954.
[SPEAKER_00]: Croc standing at that parking line, watching the lunch rush at a place called McDonald's.
[SPEAKER_00]: He watches for hours, a hundred customers, then more.
[SPEAKER_00]: The line never stops.
[SPEAKER_00]: White-clad workers moving like a machine.
[SPEAKER_00]: The food appearing in seconds.
[SPEAKER_00]: Families eating a full meal for less than $1.
[SPEAKER_00]: He's seen restaurants his whole life.
[SPEAKER_00]: He's sold equipment to hundreds of them.
[SPEAKER_00]: But he's never seen anything like this.
[SPEAKER_00]: He sees something the brothers don't, or won't.
[SPEAKER_00]: He doesn't see a restaurant.
[SPEAKER_00]: a system that can be copied 1,000 times, 10,000 times.
[SPEAKER_00]: He approaches the brothers with an idea.
[SPEAKER_00]: He wants to be their franchise agent, he'll sell McDonald's franchises across the country.
[SPEAKER_00]: They're hesitant, Dick McDonald points to his house on the hill.
[SPEAKER_00]: See that house up there?
[SPEAKER_00]: That's our home, and I love it.
[SPEAKER_00]: by Croc is nothing if not persisted.
[SPEAKER_01]: He talks them into it.
[SPEAKER_00]: The deal?
[SPEAKER_00]: Croc gets 1.4% of gross sales from each franchise he sells.
[SPEAKER_00]: The brothers get half a percent.
[SPEAKER_00]: And here's the critical cause.
[SPEAKER_00]: Croc cannot change anything about the McDonald
[SPEAKER_00]: This contract is supposed to protect them.
[SPEAKER_00]: It won't.
[SPEAKER_00]: Act 4, Empire and Friction.
[SPEAKER_00]: April 15, 1955, Des Plains, Illinois.
[SPEAKER_00]: Cock opens the first franchise of McDonald's system incorporating.
[SPEAKER_00]: He calls it McDonald's number one.
[SPEAKER_00]: Never mind that the brothers already have eight restaurants.
[SPEAKER_00]: In Crook's mind, the story starts here.
[SPEAKER_00]: He sells 18 franchises the first year, mostly to golf buddies at his country club, then to friends of friends, then to strangers.
[SPEAKER_00]: And almost immediately, he hits a wall.
[SPEAKER_00]: The money problem.
[SPEAKER_00]: Croc is expanding, but he's not making money.
[SPEAKER_00]: His 1.4% of gross sales sounds decent.
[SPEAKER_00]: But out of that, he has to pay for training, field consultants, quality control, administration, after expenses.
[SPEAKER_00]: He's left with almost nothing.
[SPEAKER_00]: Meanwhile, back in San Bernardino, the brothers cash their 0.5% royalty checks.
[SPEAKER_00]: Every month, no effort required.
[SPEAKER_00]: Croc realizes he's built himself a trap.
[SPEAKER_00]: The harder he works, the more it costs him.
[SPEAKER_00]: The more restaurants he opens, the more he bleeds.
[SPEAKER_00]: He realizes he needs a different model.
[SPEAKER_00]: He needs someone who can see what he can't.
[SPEAKER_00]: Harry sun and boar.
[SPEAKER_00]: His name is Harry sun and boar.
[SPEAKER_00]: Born in 1916 in Evansville, Indiana, orphaned at five when both parents died of tuberculosis, raised by his aunt in New York.
[SPEAKER_00]: He's been a fine at executive at tasty freeze.
[SPEAKER_00]: He understands franchise economics.
[SPEAKER_00]: And he walks into Crocs life with one idea that changes everything.
[SPEAKER_00]: Sun and Born tells Crocs something that no one else is thought to say.
[SPEAKER_00]: You're not in the hamburger business.
[SPEAKER_00]: You're in the real estate business.
[SPEAKER_00]: The concept is elegant.
[SPEAKER_00]: McDonald's stops just collecting a small royalty on food sales.
[SPEAKER_00]: Instead, McDonald's buys the land, or leases it long term.
[SPEAKER_00]: Then, it builds the restaurant on that land.
[SPEAKER_00]: Then, it sublases the whole package to the franchisee at a 40% markup.
[SPEAKER_00]: If sales go above a certain level, McDonald's takes 5% of revenue on top.
[SPEAKER_00]: And if the franchisee doesn't follow the rules, McDonald's can pull the lease.
[SPEAKER_00]: K-Mover.
[SPEAKER_00]: It's brilliant.
[SPEAKER_00]: Rent is more reliable than food sales.
[SPEAKER_00]: Land appreciates, and the company has total leverage over every franchisee.
[SPEAKER_00]: In 1956, they set up the franchise-reel-to-corporation to execute the strategy.
[SPEAKER_00]: Sun and Born runs it.
[SPEAKER_00]: By 1960, there are 228 McDonald's restaurants, sales hit 37 million dollars.
[SPEAKER_00]: Sun and Board becomes McDonald's first president and CEO, and the brothers, the brothers are still in San Bernardino, still collecting their half percent, still in their house on the hill, but the power has shifted, and they may not fully understand just how
[SPEAKER_00]: The Friction The fights start small.
[SPEAKER_00]: The clock wants to modify the building design.
[SPEAKER_00]: The brothers say no.
[SPEAKER_00]: The clock wants to change the menu.
[SPEAKER_00]: The brothers say no.
[SPEAKER_00]: The contract requires their written approval for any deviation.
[SPEAKER_00]: Crock discovers that some of the franchises that brother sold before him are a mess, selling pizza, selling burritos, undermining the brand he's trying to standardize.
[SPEAKER_00]: He can't touch them, those are the brother's deals.
[SPEAKER_00]: their restaurant tours.
[SPEAKER_00]: He's a franchise empire builder.
[SPEAKER_00]: The gap between those two things is now a canyon.
[SPEAKER_00]: And Croc, Croc, has the franchise reality corporation.
[SPEAKER_00]: He owns the land under most of the new restaurants.
[SPEAKER_00]: That means he has the real leverage, not the contractual kind, the financial kind.
[SPEAKER_00]: The kind that really matters.
[SPEAKER_00]: At five, let's take over.
[SPEAKER_00]: It's 1961, six years since Quack opened his place.
[SPEAKER_00]: The chain has 228 restaurants, millions in revenue, and Quack has decided the brothers need to go.
[SPEAKER_00]: He needs them gone for practical reasons.
[SPEAKER_00]: He can't raise capital for an IPO with their contract hanging over the company.
[SPEAKER_00]: every decision requires their sign-off, every innovation needs their blessing, and they keep saying no.
[SPEAKER_00]: So Quack goes to San Bernardino and he asks a simple question, what will it take for you to walk away?
[SPEAKER_01]: The number, the brothers think about it, not for long,
[SPEAKER_00]: Dick does the math.
[SPEAKER_00]: He wants a million dollars.
[SPEAKER_00]: Mac wants a million dollars.
[SPEAKER_00]: Then there's the tax bill.
[SPEAKER_00]: Another seven hundred thousand.
[SPEAKER_00]: Total 2.7 million dollars.
[SPEAKER_00]: Crook reportedly loses his mind.
[SPEAKER_00]: He doesn't have that money, not even close.
[SPEAKER_00]: He asks if he can pay over time and
[SPEAKER_00]: Dick McDonnell's answer is blunt.
[SPEAKER_00]: If it's not cash, we might as well continue with the royalty.
[SPEAKER_00]: The brothers know what they're doing.
[SPEAKER_00]: They've structured a price that either makes them millionaires overnight, or keeps them in the royalty stream forever.
[SPEAKER_00]: It's the most clear-headed business thinking they'll ever do.
[SPEAKER_01]: And also, the last.
[SPEAKER_00]: Croc turns to his financial architect, son-in-born works the phones, works the banks, works the insurance companies.
[SPEAKER_00]: The details vary depending on the source.
[SPEAKER_00]: Some say it was a consortium of New England insurance firms.
[SPEAKER_00]: Others say it was a single investor.
[SPEAKER_00]: But what is known is that the money gets raised, but it costs McDonald's over 20% of
[SPEAKER_00]: the deal is done.
[SPEAKER_00]: The brothers get their cash, 2.7 million.
[SPEAKER_00]: Each takes home a million after taxes.
[SPEAKER_00]: In 1961, that's serious wealth, roughly 29 million into days money.
[SPEAKER_00]: The brothers are satisfied.
[SPEAKER_00]: Dick will later say he had no regrets.
[SPEAKER_01]: But the deal comes with terms that brothers have it fully
[SPEAKER_01]: one day lost.
[SPEAKER_00]: The seal transfers everything, the name, the trademark, the system, the franchise rights, everything, except the original restaurant in San Bernardino.
[SPEAKER_00]: The brothers keep that.
[SPEAKER_00]: They want to give it to their founding employees.
[SPEAKER_00]: But here's the problem, they sold the name.
[SPEAKER_00]: McDonald's is no longer theirs to use, not on their own restaurant, not on the building they built in 1940, not on anything.
[SPEAKER_00]: They have to rename it.
[SPEAKER_00]: They call it the Big M. Two men named McDonald, who built a restaurant called McDonald's, and now they can't even put their own name on it.
[SPEAKER_01]: The revenge.
[SPEAKER_00]: What Rayquark does next tells you everything you need to know about the man.
[SPEAKER_00]: He opens a brand new McDonald's franchise, one block away from the big app, one block.
[SPEAKER_00]: A gleaming corporate restaurant, bearing the name the brothers created, serving the food the brothers invented, using the system the brothers designed on a tennis court with chalk.
[SPEAKER_00]: right across the street from the two men who made it all possible.
[SPEAKER_00]: The big M bleeds customers.
[SPEAKER_00]: Slowly, at first, then faster.
[SPEAKER_00]: Six years later, it closes.
[SPEAKER_01]: The brothers are out of the restaurant business forever.
[SPEAKER_00]: Now, I'm going to get into some controversy here because this is the part of the story that everyone argues about.
[SPEAKER_00]: Now, according to the McDonald family specifically, but nephew, the brothers asked for something in addition to the 2.7 million, a continuing royalty, half a percent of all future McDonald's revenue, forever.
[SPEAKER_00]: But that royalty was deliberately left out of the written contract.
[SPEAKER_00]: The recent crack allegedly gave, the fine answers backing the deal wouldn't sign off with an open-ended obligation on the books.
[SPEAKER_00]: If that royalty had been honored, it would be worth hundreds of millions of dollars a year today.
[SPEAKER_00]: but it was never paid.
[SPEAKER_00]: Not a cent.
[SPEAKER_00]: Now, before we accept that as gospel, we need to be honest.
[SPEAKER_00]: The evidence for the handshake deal is... Finn.
[SPEAKER_00]: it rests primarily on one family members account.
[SPEAKER_00]: Neither Dick nor Mac ever publicly complained about the money, not even once.
[SPEAKER_00]: Lisa Napoli, who wrote the most thorough independent account of the McDonald story, caused the handshake royalty a fabrication from the film.
[SPEAKER_00]: She says the reality was simpler.
[SPEAKER_00]: The brothers wanted cash where nothing.
[SPEAKER_00]: Sun and Bourne found the
[SPEAKER_00]: Dick McDonald told the Wall Street Journal in 1991 that he'd never calculated what the ongoing royalty would have been worth.
[SPEAKER_00]: He said, I would have wound up in some skyscrapers somewhere with about four ulcers and eight tax attorneys.
[SPEAKER_00]: The movie tells a clean villain story, but the reality is more human than that.
[SPEAKER_00]: The brothers were brilliant at building a system.
[SPEAKER_00]: They were
[SPEAKER_00]: and crock, crock was built for nothing else.
[SPEAKER_00]: That's six, the erasure.
[SPEAKER_00]: Here's the thing about the handshake deal.
[SPEAKER_00]: Whether it happened or not, it's not the real theft.
[SPEAKER_00]: The real theft is the stir.
[SPEAKER_00]: After the buyout, Rayquac rebuilds history, mythodically, and deliberately.
[SPEAKER_00]: He declares the Des Plains' rest-want, his restaurant, the one he opened in 1955, as the first McDonald's.
[SPEAKER_00]: Not San Bernardino, not 1940, Des Plains, 1955.
[SPEAKER_00]: His 1977 autobiography is called grinding it out the making of McDonald's.
[SPEAKER_00]: It positions crock as the founder, full stop.
[SPEAKER_00]: The brothers are a footnote, a minor obstacle he had to buy out.
[SPEAKER_00]: His plaque goes on the wall of every restaurant.
[SPEAKER_00]: His portrait, his story.
[SPEAKER_00]: The McDonald's brother's names appeared nowhere.
[SPEAKER_00]: Dick McDonald pushed for recognition for the rest of his life.
[SPEAKER_00]: He got one moment.
[SPEAKER_00]: November 30, 1984.
[SPEAKER_00]: The Grand Hyde Hotel in New York City.
[SPEAKER_00]: Ed Renzi, President of McDonald's USA, serves the ceremonial 50 billion hamburger to Richard McDonald.
[SPEAKER_00]: The man who was the first cook at the first grill.
[SPEAKER_00]: 50 billion hamburgers.
[SPEAKER_00]: And it took that many before anyone thought to acknowledge
[SPEAKER_00]: Dick's grandson, Jason French, remembered something his grandfather said when Jason was a teenager.
[SPEAKER_00]: Quiet, almost off-hand.
[SPEAKER_01]: That guy really got me.
[SPEAKER_00]: Acts 7, The Epilogue The Brothers
[SPEAKER_00]: He married Dorothy Carter.
[SPEAKER_00]: He never had children.
[SPEAKER_00]: He died of heart failure on December 11, 1971.
[SPEAKER_00]: He was 69.
[SPEAKER_00]: He's buried at Desert Memorial Park in Cathedral City, California.
[SPEAKER_00]: Dick McDonald moved back to New Hampshire, Bedford, a summer of Manchester.
[SPEAKER_00]: He lived in a modest three-bedroom house.
[SPEAKER_00]: He married Dorothy Jones.
[SPEAKER_00]: He became a stepfather and a step grandfather.
[SPEAKER_00]: He never had biological children either.
[SPEAKER_00]: There's a story.
[SPEAKER_00]: Dick wants to kiss step grandson to the McDonald's on South Willow Street in Manchester, the 596th franchise.
[SPEAKER_00]: It opened in 1964.
[SPEAKER_00]: He had to stand in line.
[SPEAKER_00]: He had to pay.
[SPEAKER_00]: He lost a lot of credibility with the kid that day.
[SPEAKER_00]: Dick died of heart failure on July 14, 1998.
[SPEAKER_00]: He was 89.
[SPEAKER_00]: His estate was worth $1.8 million.
[SPEAKER_00]: He's buried at Mount Calvary Cemetery at Manchester, New Hampshire.
[SPEAKER_01]: Ray Croch.
[SPEAKER_00]: Croch's personal life was chaos.
[SPEAKER_00]: Three marriages, a lifelong struggle with alcohol abuse.
[SPEAKER_00]: He divorced Ethel his first wife, the same year he bought out the brothers, 1961.
[SPEAKER_00]: Everything burned at once.
[SPEAKER_00]: He married Jane Dobbins Green, that lasted five years.
[SPEAKER_00]: Then, he married Joan Smith, a musician he'd met in 1957, while selling franchises in St. Paul, Minnesota.
[SPEAKER_00]: She'd been married to one of his franchisees.
[SPEAKER_00]: He'd carried a torch for her for 12 years.
[SPEAKER_00]: Crook was a Republican.
[SPEAKER_00]: He donated a quarter million dollars to Nixon's 1972 campaign.
[SPEAKER_00]: Congress accused him of trying to buy a veto on minimum wage legislation.
[SPEAKER_00]: He bought the San Diego Padres baseball team in 1974 for $12 million dollars.
[SPEAKER_00]: They lost a 102 games that year.
[SPEAKER_00]: He entered rehab in 1980 after a stroke.
[SPEAKER_00]: On January 14, 1984, Ray Crock died of heart failure.
[SPEAKER_00]: He was 81.
[SPEAKER_00]: At the time, 7,500 McDonald's restaurants, 31 countries, $8 billion in company value.
[SPEAKER_00]: His personal fortune, $600 million.
[SPEAKER_00]: Joan inherited everything.
[SPEAKER_01]: She spent the rest of her life giving it away.
[SPEAKER_00]: After Quack's death, McDonald's kept growing, and growing, and growing.
[SPEAKER_00]: The menu expanded in ways the brothers would barely recognize the big Mac, the quarter pounder, the egg McMuffin, chicken nuggets, the happy meal.
[SPEAKER_00]: Dick in Mac had nine items.
[SPEAKER_00]: the company went global.
[SPEAKER_00]: Canada in 1967, Red Square in Moscow in 1990, China, India, over a hundred countries.
[SPEAKER_00]: They opened a hamburger university.
[SPEAKER_00]: They built Ronald McDonald houses.
[SPEAKER_00]: They became one of the largest private employers on the planet.
[SPEAKER_00]: Today, McDonald's owns 70% of the buildings and 45% of the land under its restaurants worldwide.
[SPEAKER_00]: That real estate portfolio is worth roughly $38 billion.
[SPEAKER_00]: 99% of the company's total assets.
[SPEAKER_00]: Harry Sunnidborn was right, it never was about burgers.
[SPEAKER_00]: As of 2026, McDonald's operates over 43,000 locations in more than 100 countries.
[SPEAKER_00]: 95% are franchiseed, annual revenue runs about $26 billion.
[SPEAKER_00]: System wide sales across all restaurants, over $130 billion.
[SPEAKER_00]: They serve 70 million customers a day.
[SPEAKER_00]: That's roughly the entire population of France, every single day.
[SPEAKER_00]: The CEO is a man named Chris Camchinsky.
[SPEAKER_00]: The company is the second largest fast food chain on Earth by location count.
[SPEAKER_00]: Second, a Chinese bumblety company overtook them in 2024.
[SPEAKER_01]: The brothers would have found that funny.
[SPEAKER_00]: So, was it theft legally now?
[SPEAKER_00]: Croc paid the asking price in the currency demanded on the terms the brothers said.
[SPEAKER_00]: Nobody held a gun to their heads.
[SPEAKER_00]: They chose cash over stock.
[SPEAKER_00]: They chose comfort over empire.
[SPEAKER_00]: Both brothers said publicly that they had no regrets.
[SPEAKER_00]: But.
[SPEAKER_00]: crock took their name and banned them from using it, on their own restaurant.
[SPEAKER_00]: He opened a competing store one block away to destroy them.
[SPEAKER_00]: He wrote them out of the company's history for decades.
[SPEAKER_00]: He put his own face on the walls and his own story in the books and let the world believe he was the founder.
[SPEAKER_00]: two men invented in industry.
[SPEAKER_00]: One man claimed it.
[SPEAKER_00]: The McDonald brothers understood something about food that nobody else did.
[SPEAKER_00]: How to make it fast, how to make it cheap, and how to make it identical every single time.
[SPEAKER_00]: Ray Crock understood something about scale that the brothers never would.
[SPEAKER_00]: That in American capitalism, the idea is worth nothing.
[SPEAKER_00]: The system is also worth nothing.
[SPEAKER_00]: What's worth everything is the ability to replicate, to franchise, to control the land.
[SPEAKER_00]: If Dick and Mac McDonald were Thomas Edison, then Ray Crock was JP Morgan.
[SPEAKER_00]: And we know whose name goes on the building.
[SPEAKER_00]: Dick McDonald died in 1998 in a nursing home in the town where he was born.
[SPEAKER_00]: He left in a state of $1.8 million.
[SPEAKER_00]: The McDonald's corporation is worth over $200 billion.
[SPEAKER_00]: This has been Corporate Wars.
[SPEAKER_00]: I'm Tom, and I'll see you next week.
[SPEAKER_00]: When we look at how Blockbuster Video made a billion dollar mistake when they laughed a swuggling business who rented DVDs by mail out of the room when they came looking for financial backing.
[SPEAKER_00]: Today, Blockbuster Video runs a single museum store while the swuggling DVD-mail rental business, well, they're called Netflix and they run entertainment.