The Birth of McDonald’s

On April 15, 1955, Ray Kroc opened a burger joint in Des Plaines, Illinois, that would later become one of the world’s largest corporations: McDonald’s. But the restaurant chain that has expanded its operation to 119 countries and served over 100 billion hamburgers over the past half-century did not originate with a former milkshake machine man in Illinois. Instead, Kroc was inspired by the radical new idea of fast food that the McDonald brothers had established in San Bernardino county years earlier. Below, in McDonald’s: Behind The Arches, John F. Love maps out the McDonald brothers’ restaurant ventures across Southern California that resulted in the invention of fast food.

The McDonald brothers were not restaurant men by training or background, and in the tradition-bound food service business, that may have been something of a prerequisite to igniting a revolution in the trade. Restaurants are typically family businesses, and industry traditions are passed down through families established in the business.

The brothers were not bound by such traditions. There were not long out of high school when they left their native New Hampshire and moved to California in 1930 in search of a new opportunity – anything that promised a better fate than had befallen their father. A foreman in a shoe factory, the Depression had taken away the only job he ever had. The shoe factories and cotton mills of New Hampshire were closing, and California offered a fresh start in new trades.

Not surprisingly, the McDonalds looked for the obvious opportunity first – in Hollywood. They landed jobs pushing sets around for Hollywood movies, primarily one-reelers of slapstick comedian Ben Turpin. Intrigued with the potential of a brand-new industry, the brothers opened a movie theater in Glendale. But in four years of operation, they never made enough money to pay the $100 monthly rent on the theater, and only regular concessions from the landlord kept them in business. But the brothers never ceased looking for better entry-level business opportunities, and they found it in the form of a new service that was taking California by storm – the drive-in restaurant.

The year was 1937, and already Californians were beginning to develop their extraordinary dependence on the automobile. Some independent operators in southern California were just beginning to capitalize on the trend by building restaurants that catered to the drive-in customer. Thus, when the McDonald brothers opened their tiny drive-in just east of Pasadena, they stumbled onto the cutting edge of the food service business and into the company of operators who were fascinated with speed of service and carryout service and who were only a few years away from franchising. Though clearly in the carhop drive-in family, the first McDonald’s was a modest effort, even by drive-in standards. While Dick and Mac cooked the hot dogs (not hamburgers), mixed the shakes, and waited on customers seated on a dozen canopy-covered stools, three carhops served patrons parked in the lot.

This led to the much grander drive-in that the McDonalds opened in 1940 at Fourteenth and E streets in San Bernardino, about fifty miles east of Los Angeles. An erstwhile orange grove capital and onetime center of Seventh Day Adventism, San Bernardino in the 1940s was becoming a working-class boomtown, and one of the chief beneficiaries was the McDonald’s drive-in.

No one would have suspected from looking at it that this would be the birthplace of a new generation of restaurants. With just six hundred square feet of space, it was a fraction of the size of the more fashionable drive-ins in Los Angeles. It had a strange shape for a restaurant – octagonal – and the slightly slanted, roof-to-counter windows that ran around the front half of the building violated a basic rule of restaurant design by exposing the entire kitchen to the public. There was no inside seating, but several stools were placed on the outside along the side counter. The exterior walls below the counter were made of stainless steel.

But it was nothing if not an attention-getter, and by the mid-1940s it was the town’s number one teenage hangout. A staff of twenty carhops served the 125 cars crowded into the lot on weekend evenings. The brothers’ twenty-five-item menu featured beef and pork sandwiches and ribs that were cooked in a barbecue pit stocked with hickory chips that the McDonalds had delivered from Arkansas. If the drive-in looked strange by food service standards, its cash register spoke a language that all restaurateurs understood: annual sales regularly topped $200,000.

Their tiny drive-in had catapulted the McDonalds into the ranks of the San Bernardino’s newly rich. Each year the brothers split $50,000 in profits, and they suddenly found themselves on a social par with the local establishment – the Guthrie family, which published the Daily Sun; the Stater brothers, who ran the largest supermarket chain; and the Harrises, who owned the big department store. They even moved into one of the city’s largest houses, a $90,000, twenty-five-room mansion atop a hill just northeast of town.

By 1948, the McDonalds had achieved greater wealth than they had dreamed was possible a decade earlier when they built a tiny hamburger stand with borrowed lumber. But the McDonald brothers were beginning to feel some competitive pressure. When they had opened at Fourteenth and E streets, their was the only drive-in in town, but by 1948 there were imitators. More important, Dick and Mac discovered that the drive-in concept they had helped to pioneer had serious economic flaws. Drive-ins had become identified as a source of low-priced food and yet were burdened by an increasingly high-cost, labor-intensive format.

Bothered by such trends, the brothers nearly decided to sell their drive-in and open a different hamburger restaurant in one of the new strip shopping centers that would soon spread throughout America’s burgeoning suburbs. But just before they were about to execute their plan, the brothers reacted to the risks inherent in a venture that took them beyond their relatively limited expertise. By studying their sales receipts for the previous three years, they found that fully 80% of their business was generated by hamburgers. They could no longer justify the attention they lavished on their barbeque pit. “The more we hammered away at the barbeque business, the more hamburgers we sold,” Dick recalls.

The discovery led to a complete overhaul of the McDonald’s drive-in – and the beginning of a revolution food service. Like other drive-in operators, the McDonalds had been grappling with ways to increase volume by improving speed. Now they decided to make speed the essence of their business. “Our whole concept was based on speed, lower prices, and volume,” says McDonald. We were going after big, big volumes by lowering prices and by having the customer serve himself. My God, the carhops were slow. We’d say to ourselves that there had to be a faster way. The cars were jamming up the lot. Customers weren’t demanding it, but our intuition told us that they would like speed. Everything was moving faster. The supermarkets and dime stores had already converted to self-service, and it was obvious the future of drive-ins was self-service.”

Excerpted by Jodie C. Liu

*Photo courtesy ChicagoGeek.


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