Think of him as the father of fast food.
Thirty-six years ago, Dick McDonald and his brother opened a revolutionary kind of drive-in in San Bernardino, Calif. It had no carhops, a short menu, and pre-cooked food. It was the first McDonald's.
Today, there are more than 8,000 McDonald's, and they've sold more than 50 billion hamburgers worldwide. In 1961, the McDonald brothers sold out for $2.7 million to entrepreneur Ray Kroc, who is credited with building the company into a food-business giant, but Dick McDonald remains a historical figure, the man whose tiny California restaurant gave birth to a whole new way of eating -- not to mention those ubiquitous Golden Arches, which he designed.
Earlier this week, shortly before ceremonies in which he got to eat No. 50 billion, McDonald reminisced about the early days of the chain that bears his name. Here are some excerpts from that conversation.
Q. Would you have believed, when you opened your first hamburger stand, that you'd wind up selling 50 billion hamburgers?
A. As I've told so many people, if anybody had told me that, said, "Dick, in 1984, McDonald's will have sold 50 billion hamburgers," I would have said, "Man, you've been in the California sun too long. You better get under a tree somewhere, because you're in bad shape."
In fact, business was terrible when we switched to what is now fast food. We didn't know what it was. We were just stumbling around, trying one thing, trying another. We never knew that they were eventually going to call this fast food. We were just trying to speed up the old carhop system that we had.
We had a little movie theater in this town called Glendora, about 20 miles from Pasadena, and this was during the Depression years. Things were terrible. Every merchant was starving, including the McDonald brothers. The only thing that kept us going was the public service company -- we were months behind in our utility bills.
Every merchant was starving except one, and this was a young fella who had a root beer and hot dog stand. That sonuvagun was doing nothing but making money. So my brother says, "You know, I think you and I are in the wrong business."
We opened a very small little drive-in near the Santa Anita racetrack . . . in 1937. We ran that from 1937 until 1940. But we wanted to go to San Bernardino, Calif., a much larger city. We would do well during the racing season, but after that, it would die.
But we didn't have any money. We had a customer who was a manager of a bank. He said one day, "Dick, do you and your brother have any ideas to expand?" His name was Mr. Bole. I said, "Mr. Bole, we have a new idea every 10 minutes. All we need is money. We don't have any money." He said, "Come up to the bank, I'll see if I can help you."
Being old New Englanders, we hated to borrow money. So we said to Mr. Bole, "If you will invest $7,500 in McDonald brothers, we will give you a one-third interest in our net profit from now on. You don't have to do a thing." He said, "Well, let me talk it over with my wife. See you in the morning."
The next morning, he says, "Boys, I've got some bad news for you. The wife says it's too much of a gamble. I've got to turn you down." Years later, I said to our accountant, figure out what Mr. Bole would have made off his $7,500. It was something like $2 million. You know, he never came in the drive-in after that. So we never got any money and we lost a customer, too. Something tells me he's thought about McDonald's along the way, and if he hasn't killed his wife, I'll bet he's thought about it."
Q. That eventually evolved into the McDonald's drive-in. What happened next?
A. The thing that happened, was, when the business really began to pick up, we began to have tremendous lines of customers. Sometimes, we had three serving windows, and we had 200 customers out there. Trade magazine reporters were picking it up. They'd come out and couldn't believe that people were standing in line just for hamburgers.
All hell broke loose, all over the country. We had drive-in operators, restaurant operators calling us , because they were having the same problems we had had with high overhead. With our new system, our overhead was really low.
Q. What was the menu?
A. We had a hamburger, we had a cheeseburger. We only had one size -- we had a 15-cent hamburger, we had a 19-cent cheeseburger. We had a milkshake for 20 cents; french fries a dime; Coke, orange and root beer a dime. Just one price. There was no double anything, because we didn't want people to think that we were getting them in on 15-cent hamburgers and then trying to sell them a 30-cent hamburger. One price, one size. That was the whole menu.
Q. You mentioned your system. What was the system that set you apart from the other drive-ins?
A. I would say it was the speed. We started to get mechanics, we started to get sales girls, and secretaries, and then we began to get the youngsters. And boy, when we got the youngsters, we had mama and papa, too.
The other secret was the price. We had been selling hamburgers for 35 cents, and we 'd throw in a few french fries. Boy, when that 15-cent price hit, wow.
We had this billboard, and we just put "15" up there. Nothing else, just a big "15." And a local disc jockey would say, "Gee, I see some billboards around town with this '15.' Anybody know anything about that?" About 10 days later, we put the "cents" sign. Bingo. Everybody said, "That's McDonald's. Fifteen-cent hamburgers." That's all it took. We didn't even have to say hamburgers. The minute we said 15 cents, they knew it was McDonalds.
Q. You started counting burgers?
A. We had a sign painter paint a thermometer on one of the windows. We started at, I don't know, 25 million, something like that. Each time we'd go up, he'd paint the little mercury line a little higher. Then, when it hit 100 million, he came up and blew the top off the thermometer. More people would stand out there with their cameras and shoot that, watch how it kept climbing.
Q. How long did it take to get to 100 million?
A. I guess it probably took, I don't know, three years, I guess. It took a long time. Because our business started off very slowly, oh -- we came close to throwing in the sponge about three different times. It was tough. And the old carhops, they were heckling the hell out of us, saying, "We told you so, we told you so. . . ."
Oh, God, I think of those lean years, how close we came. I remember one time, my brother and I were talking, and we were looking out at two or three cars there, and he said, "What do you think? You think we'd better throw in the towel?" "Jeez," I said. "I don't know. If you want to." "Well," he says, "let's hang on a bit." We took it one day at a time, because it was not good. . . .
Q. That was the big difference, wasn't it? No carhops?
A. Overnight, we threw out the carhops. People would come in and honk their horns. We had signs around: "No car service." It didn't do anything. . . .
With the carhops, customers could get it any way they wanted. We'd make it any way they wanted: lettuce, tomato. But with the fast food, no way. We had a basic hamburger, for the speed. One guy came up one day and he says, "I want a hamburger with lots of mayonnaise." And the window boy says, "Gee, I'm sorry, we don't have any mayonnaise." "You don't have any mayonnaise?" he says. "If the McDonald brothers are so cheap that they won't buy a jar of mayonnaise, I'll donate a jar." That's what we had to contend with.
Q. How long did it take before somebody figured out you were onto something and copied you?
A. I'd say probably a couple of years. There were two or three who started places around us.
The one that was honest enough to admit to me that he'd copied us was Dave Thomas, of Wendy's. I met with him one day, we had a nice meeting. When he got back to his office in Columbus, Ohio, he wrote me a nice letter thanking me and my brother for coming up with the fast-food idea. Very nice. We have not heard anything from any of the other competitors.
Q. Who came up with the Golden Arches?
A. That was my idea. How that came about was, when we started to franchise, we wanted a new building. We wanted a building that would be different. We had an old hexagon-shaped building.
So we had a couple of architects work on sketches, and oh, they were terrible. They just looked like a Dairy Queen -- a little old squatty building. One night I was in my office, doing some sketches, and I was trying to give the building some height. So I drew one big arch parallel with the front of the building. Well, that didn't work so hot. So then I drew in two arches, and that looked pretty good. It raised the building up and slanted the roof a little bit.
The next morning, I showed it to my brother. He said, "Gee, that looks pretty good." So we took it to our first architect, and he looked at it, and he said, "Dick, whose goofy idea was this with the arches?" "That's mine," I said. "It's terrific." "Forget it," he said. "I'll have nothing to do with the arches." So we took it to the second architect, and he looked at it and he said, "The basic building isn't too bad, but those crazy arches have got to go."
I said, "Crazy arches? That's what makes it." He said, "I'll tell you what. If you insist on the arches, I'll draw them in, but don't ever tell anybody I had anything to do with them." Years later, I met this guy, this architect, and the arches are all over the country. I said, "By the way, what do you think of the arches now?" "I still think they're terrible," he says. He never changed his mind.
Q. You had a lot of trouble convincing people you were doing the right thing.
A. I've got to tell you a story about my mother. She was Irish, and of course, to an Irish mother, a steady job is important . Fireman, policeman, shoe clerk, anything -- a steady paycheck. And my brother and I never had a job. We always worked for ourselves, and this drove my poor mother to distraction. She'd come by listening when we were talking about ideas, and she'd say to my father, "When are they going to come to their senses and get a job?"
Well, years went by, and of course, we were pretty successful then, and a friend of my mother met her downtown, and they talked, and then this lady said, "Say, Mrs. McDonald, I'll bet you're really proud of your sons now. They've got their name on the buildings, and the TV commercials. I'll bet you're really proud." My mother said, "Well, I guess so. But I still wish they had a good steady job."
And she never changed. She kept waiting for the balloon to burst.
Q. Tell me about your first meeting with Ray Kroc and how that relationship evolved.
A. We had been selling a lot of milkshakes, and we'd been buying the milkshake machines, the Multimixers, from Ray. And I think . . . different salesmen had been telling them about this place in San Bernardino that was doing such a volume. I think we were using four machines at the same time, which was tremendous -- most places just had one machine, because it made five milkshakes at a time. . . .
So one day Ray came out, and I'll never forget it. He knocked on the door, stuck his head in the door, and he said, "I'm Ray Kroc." That was the first time we'd ever met him, because we had dealt through one of his salesmen . He said, "You know, I'm looking at it out there, and I can't believe it." We must have had 200 people lined up out to the street. Ray said, "My God. You're franchising?" I said, "Yeah, we're just starting our franchise program," and he says, "Boy, that's going to be great for me and my milkshake machines." He never thought about coming in with us.
He went back to Chicago, and about a week later, we got a call from Ray, and he said, "You know, I've been thinking this thing over, and I'd love to be in on this franchising. To hell with the milkshake machines."