I saw a movie recently - 'The Founder'

This movie completely changed my perspective of McDonalds - the real estate business that sells burgers.

Yes - you read that right. Here's their story

1/ In 1955, Ray Kroc was a semi-successful salesman and unsuccessful inventor, who was trying to sell his latest inventions to people. He came across a small shop selling burgers in San Bernandino Valley.

He is popularly known as the founder of McD, but that is NOT the case.

2/ This burger shop, run by 2 brothers, Dick and Mac, was unlike anything Ray had ever seen - standard set menu, instant (30 sec) service, disposable packaging and actually standing in a line to place your food order.

We now call this fast food, it was unheard of in 1955.

3/ Inside the shop, everything was standardized and run in the most efficient fashion. Kitchen, dressings, oil temperature, rack positions - all had been measured to the T for the most efficient hamburger factory in the world.

They called it the "Speedee Service System".

4/ Intrigued by their amazing model, Ray cracked up a deal to franchise and set up McDonalds across America, claiming this was the future of food.

He mortgaged his house to get the loan. The first shops failed simply because quality issues. But, Ray was determined to succeed.

5/ With PERSISTENCE, he setup more shops and solved the QC issues with thrift - soon to be operating 15+ stores and raking in good revenue.

But Ray still wasn't making money. In fact, he had missed his loan payments for 3 months now. Something wasn't right.

6/ Ray soon identified the problem - his cut simply wasn't enough. He was getting just 0.5% of all profits from all the franchises, the brothers getting 1%.

He wanted to renegotiate. But, they did not agree with him. In fact, they didn't listen to any of his suggestions.

7/ That is when Ray met Harry Sonneborn, who told him what he was doing wrong. He said McDonalds was not in the food business, but in the real estate business.

In amazement, Ray watched as Harry explained to him how to do business and actually make a profit.

8/ Buy up prime real estate, and make it a clause of your contract to only allow people to build McDonalds on your real estate - with a lease.

If they don't maintain quality, cancel the lease. The lease pays you money, the contract gets you loyalty.

9/ And your actual business becomes the real estate business. It sounded like a neat plan, and Ray made that happen.

Of course, the McDonald brothers resisted the plan - but Ray made it very clear to them that he was going to do it his way.

10/ "Everything inside the restaurant is dictated by your contract, but not what happens above or below it." Ray was playing hardball.

Soon, Ray grew this business fast and filed for trademark on all the McDonalds brand names, including the Double-Arch symbol.

11/ Ray bought out the brothers' equity for a mere 2.7 Million dollars (!!) and then started an aggressive global expansion.

The rest is history. What started as a small hamburger shop, is today the world's 2nd largest private employer (after Walmart)

12/ McDonalds serves 68 million people daily at 37,000+ restaurants across 120 countries!

The funny part? The original founders are nowhere in the picture, and this is, in reality a real estate business, more than a food business.

Inspired by the one and only @palakzat