Fast Food Nation

Until 1961 the brothers retained ultimate authority

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Unformatted text preview: ool dropouts and drive-in owners who lacked “proper” business credentials. Banks were not eager to invest in this new industry; nor was Wall Street. Dunkin’ Donuts and Kentucky Fried Chicken were among the first chains to start selling franchises. But it was McDonald’s that perfected new franchising techniques, increasing the chain’s size while maintaining strict control of its products. Ray Kroc’s willingness to be patient, among other things, contributed to McDonald’s success. Other chains demanded a large fee up front, sold off the rights to entire territories, and earned money by selling supplies directly to their franchises. Kroc wasn’t driven by greed; the initial McDonald’s franchising fee was only $950. He seemed much more interested in making a sale than in working out financial details, more eager to expand McDonald’s than to make a quick buck. Indeed, during the late 1950s, McDonald’s franchisees often earned more money than the company’s founder. After selling many of the first franchises to members...
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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.

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