In a defining moment of the 2016 movie The Founder, that I saw last night, Ray Kroc’s character (Michael Keaton) explains to one of the McDonald brothers that he had to buy the McDonalds franchise from them because of the name (instead of copying the concept and starting his own franchise). Kroc is Slavic (Czech),and sounds like ‘broken’ as in ‘it is a crock’, and would never have worked, he explained.
This was in 1961. The McDonald brothers wanted 1% royalties from sales, but Kroc left it out of the written contract and offered that they make that part of the sale agreement a ‘handshake deal’. So they shook hands on it, but the brothers never did get royalties after the sale. Mac McDonald would die ten years later in 1971 of heart failure. Dick McDonald passed away in 1998, age 89, with his estate worth some $1.8 million.
Those royalties would have been worth at least $100 million per year today .. and one could argue that a McDonalds hamburger is as part of Americana as baseball, Coca-Cola, Levi’s 501 blue jeans, a Ford and Chev truck, and a white picket fence. The other fascinating ending to the story of the original characters, was that Ray Kroc’s second wife Joan – who was very supportive and worked hard at helping Ray build out his empire – gave away the entire McDonalds fortune to charities over her lifetime, and after her death. It came to a staggering $3 billion in total.
Anyway, I thought the movie was very interesting, but I see it has only grossed $22 million as of April this year (and cost $25 million to make).
