Early on in my post-university education, a manager and mentor of mine recommended I read this book called The E-Myth. The full title is actually The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It.
It’s a fairly quick read that explains the biggest entrepreneurial myth of all time, people who are technically talented don’t necessarily know how to operate a business. If you can create a business which doesn’t need you to function, then you have a turnkey solution and you will have success.
Ray Kroc understood this principle, and that’s why he also invented the corporate takeover. At the very least, he’s one of the best examples of this second idea anyway.
The Founder (2016)
Cast: Michael Keaton, Nick Offerman, John Carroll Lynch, Linda Cardellini, B. J. Novak, Laura Dern, Justin Randell Brooke, Patrick Wilson
Director: John Lee Hancock
released on blu-ray April 18, 2017
Rotten Tomatoes: 84%, Audience Score 82%
The Guardian: ****/*****
John Lee Hancock, Jr. is an American director and producer known for his biographical turns at filmmaking. Some of his most critically acclaimed works include The Rookie, The Blindside, Saving Mr. Banks, and now, The Founder. He doesn’t have a perfect track record though, The Alamo is boring and too self-contained to enjoy.
That said, The Founder is quite a delight to sit through, and it does an excellent job putting its lead front and centre. Don’t believe me? Take a gander at the Wikipedia synopsis.
Ray Kroc (Michael Keaton) is a traveling salesman selling Prince Castle brand milkshake makers in 1954. While he has a supportive wife, Ethel (Laura Dern), and has saved enough to live a simple comfortable life in Arlington Heights, Illinois, he craves more. After learning that a drive-in in San Bernardino is ordering an unusually large number of milkshake makers, Ray drives to California to see it. What he finds is McDonald’s—a highly popular walk-up restaurant with fast service, high-quality food, disposable packaging, and a family-friendly atmosphere.
Ray meets with the two McDonald brothers, Maurice “Mac” McDonald (John Carroll Lynch) and Richard “Dick” McDonald (Nick Offerman). Ray tours the kitchens and notes the employees’ strong work ethic. Dick explains the high-quality food and lightning-fast service are the backbones of their diner. Ray takes the brothers to dinner and is told the origin story of McDonald’s. The next day, Ray suggests that the brothers franchise the restaurant and discovers that they had previously attempted to do so only to encounter absentee owners and inconsistent standards which ultimately led to the failure of the endeavor. Ray persists and eventually convinces the brothers to allow him to lead their franchising efforts on the condition that he agree to a contract which requires all changes to receive the McDonald brothers’ approval in writing.
Initially, Ray begins building a McDonald’s restaurant in Des Plaines, Illinois while attempting to entice wealthy investors (specifically fellow members at the country club he and Ethyl were members of) to open franchises, but encounters the same poor management ethic which doomed the original franchise efforts. Ray hits on the idea of franchising to middle-class investors, who are more likely to be hands-on and willing to follow the McDonald’s formula. This proves successful, and new franchises begin opening across the Midwest, with Ray representing himself as the creator of McDonald’s. During this time, Ray meets Rollie Smith (Patrick Wilson), an upscale restaurant owner in Minnesota who wishes to invest, and his wife Joan (Linda Cardellini), to whom Ray is immediately attracted.
Despite his success, Ray begins to encounter financial difficulties as his share of franchise profits is limited due to his contract. Owners are encountering higher than expected costs, particularly for refrigeration of large quantities of ice cream for milkshakes. Joan suggests a powdered milkshake to Ray as a way to avoid these costs, but the brothers refuse to compromise the quality of their food. With his debts mounting, Ray goes to his bank to attempt to renegotiate his loan, but it refuses. Fortunately, he is overheard by Harry Sonneborn (B. J. Novak), a financial consultant for Tastee-Freez, who agrees to review Ray’s books. He realizes that the real profit opportunity is in providing real estate to the franchisees, which will not only provide a revenue stream, but give Ray leverage over his franchisees and over the McDonald brothers. Ray incorporates a new company, Franchise Realty Corporation, and attracts new investors.
Emboldened, Ray begins to increasingly defy the McDonald brothers and circumvent their authority, including by providing powdered milkshakes to all franchisees. Ray renames his company to The McDonald’s Corporation and demands to be released from his contract and buy the brothers out, the news of which sends Mac into diabetic shock. Ray visits him in the hospital and offers a blank check to settle their business. The brothers agree to a $2.7 million lump sum payment, ownership of their original restaurant in San Bernardino, and a 1% annual royalty, but when the time comes to finalize the agreement, Ray refuses to include the royalty in the settlement and instead offers it as a handshake agreement. Afterwards, Dick asks Ray why he had to take over their business, when he could have easily stolen their idea and recreated it. Ray reveals that the true value of McDonald’s is the name itself, which expresses all the attributes of Americana.
The McDonald brothers are forced to take their name off the original restaurant and Ray opens a new McDonald’s franchise directly across the street from the original restaurant to finally put the McDonald brothers out of business. The film closes in 1970 with him preparing a speech where he praises himself for his success in his elaborate mansion with his new wife, Joan. An epilogue reveals that the McDonald brothers were never paid their royalties, which could have been in the area of $100 million a year.
Keaton does an excellent if not nuanced job showcasing the megalomania of businessman Ray Kroc. At once accessible, distant, decisive, insecure, ornery, family-friendly, and ruthless, Keaton does a good job making you like someone who could easily have been the villain of this story.
Pros: Much like business in real life, things happen quickly, and without much explanation, men who were equals quickly move into roles of master and subservient. And the narrative never takes a side one way or another.
Cons: You have to wonder what the story would’ve looked like had it been centred on the McDonald brothers instead of their usurper.
Runtime: 1 hour 55 minutes
Points of Interest: Before taking over McDonalds, Ray Kroc worked for Prince Castle. Prince Castle is still in business today and supplies McDonalds with a lot of it’s equipment.
After all is said and done, Ray Kroc is never set up as the villain of this story, and that in itself is unsettling in a time of Donald Trump presidency. We watch slowly as he convinces person after person to buy into the idea of the McDonalds franchise, and to his credit it works. Just as his credibility takes an uptick, so too do the McDonalds restaurants.
Everybody loves a good morality tale, and even better, they love a true story of triumph over adversity. The Founder is an accomplishment on both fronts, but like fairy tales of old, it contains a hidden subtle message of the risks associated in chasing gold. As Ray knows, a name like Kroc cannot mean anything good, and his theory seemed to pan out.