Unformatted text preview: s revenues, instead of
selling it to Ray Kroc, the income from it would have reached more than $180 million a year.
Kroc’s relationship with the McDonalds had been stormy from the outset. He deeply resented the pair, claiming that while he was doing
the hard work — “grinding it out, grunting and sweating like a galley slave” — they were at home, reaping the rewards. His original
agreement with the McDonalds gave them a legal right to block any changes in the chain’s operating system. Until 1961 the brothers retained
ultimate authority over the restaurants which bore their name, a fact that galled Kroc. He had to borrow $2.7 million to buy out the
McDonalds; Sonneborn secured financing for the deal from a small group of institutional investors headed by Princeton University. As part of
the buyout, the McDonald brothers insisted upon keeping their San Bernardino restaurant, birthplace of the chain. “Eventually I opened a
McDonald’s across the street from that store, which they had renamed The Big M,” Kroc proudly note...
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This note was uploaded on 02/25/2014 for the course MGMT 120 taught by Professor Litt during the Spring '08 term at UCLA.
- Spring '08