The Real Way McDonald's Makes Their Money Might Surprise You

[MULTIZ321]

The Real Way McDonald's Makes Their Money Might Surprise You
By Melissa Locker/ News/ Southern Living/ southernliving.com

"When you go to McDonald’s you know you’re going to get great fries and milkshakes, Happy Meals with a prize inside to keep the kids smiling, and enough food to hold you over to your next home-cooked meal—all for just a few bucks. While every hangry person, hurried office worker, and harried parent appreciates the low prices on the McValue Menu, how does McDonald’s afford to keep their prices so low? They are a business, after all, and a very successful one, but how do they turn a profit on $1 cheeseburgers? Turns out that the secret to their success isn’t on the menu at all. McDonald’s main profit making tool isn’t cheeseburgers or chicken nuggets, but real estate.

McDonald’s sell plenty of burgers to make its bottom line. “McDonald’s will make money selling burgers for a buck if it can make the burger for less than $1 and sell lots and lots of burgers,” Patricia Smith, a professor at the University of Michigan, told the BBC, especially if they can convince customers buying those dollar burgers to also buy fries, drinks, and Shamrock shakes. However, McDonald’s really turns a profit thanks to its franchise structure. The company makes a lot more from its real estate assets each year than it does from its Dollar Menu. As Quartz put it, “McDonald’s isn’t just a fast-food chain—it’s a brilliant $30 billion real-estate company.”...."

Richard

 

[bogey21]

The information in this article has been around for years. In fact it was one of the central points in a one hour CNN Special on the life of Ray Kroc a year or so ago. Another point the Special emphasized is what an a-hole Ray Kroc was...

George

 

[DaveNV]

Another point the Special emphasized is what an a-hole Ray Kroc was...

George

I met him once. I was working the counter at the McD’s in Ala Moana Center in Honolulu the year I graduated high school. The Corporation bigwigs were having a convention in Hawaii, and they dropped in unannounced. During the time it took the person at the next window to assemble his order, I did about four, all the while adhering to the “7 Steps to Being a Proper Window Person.” (McD corporate training manual stuff.) After he got his order, he leaned over and congratulated me on being the best “window person” he’d ever seen at McD’s. I thanked him and asked if he was connected to the company in some way. He smiled and said, “I’m Ray Kroc. I own the joint.” He laughed as he went into the back to talk to the store manager. I was later singled out to the rest of the crew, and the manager made much of what I’d done. It was embarrassing.

Footnote: A week later I was fired, because the manager said I’d made him look bad to corporate. He said he was in hot water because McD’s is a team effort, and I stood out instead of blending in as part of the team. Seriously.

It was right after that I joined the Navy. I have rarely set foot in a McD’s since. But when I do, I look for employees who stand out. There haven’t been many. So I guess the team training works.

Dave

 

[am1]

I met him once. I was working the counter at the McD’s in Ala Moana Center in Honolulu the year I graduated high school. The Corporation bigwigs were having a convention in Hawaii, and they dropped in unannounced. During the time it took the person at the next window to assemble his order, I did about four, all the while adhering to the “7 Steps to Being a Proper Window Person.” (McD corporate training manual stuff.) After he got his order, he leaned over and congratulated me on being the best “window person” he’d ever seen at McD’s. I thanked him and asked if he was connected to the company in some way. He smiled and said, “I’m Ray Kroc. I own the joint.” He laughed as he went into the back to talk to the store manager. I was later singled out to the rest of the crew, and the manager made much of what I’d done. It was embarrassing.

Footnote: A week later I was fired, because the manager said I’d made him look bad to corporate. He said he was in hot water because McD’s is a team effort, and I stood out instead of blending in as part of the team. Seriously.

It was right after that I joined the Navy. I have rarely set foot in a McD’s since. But when I do, I look for employees who stand out. There haven’t been many. So I guess the team training works.

Dave

Minimum wage keeps employees from standing out or the ones that do to stick around.

If that happened to you now you could reach out by social media. Or start a gofundme.

 

[PigsDad]

If you haven't seen the movie "The Founder", I highly recommend it. Michael Keaton did a good job portraying Ray Kroc and it follows the story of how he basically stole McDonalds from the original McDonald brothers.

"You're not in the burger business, you're the the real estate business."

Kurt

 

[Panina]

I met him once. I was working the counter at the McD’s in Ala Moana Center in Honolulu the year I graduated high school. The Corporation bigwigs were having a convention in Hawaii, and they dropped in unannounced. During the time it took the person at the next window to assemble his order, I did about four, all the while adhering to the “7 Steps to Being a Proper Window Person.” (McD corporate training manual stuff.) After he got his order, he leaned over and congratulated me on being the best “window person” he’d ever seen at McD’s. I thanked him and asked if he was connected to the company in some way. He smiled and said, “I’m Ray Kroc. I own the joint.” He laughed as he went into the back to talk to the store manager. I was later singled out to the rest of the crew, and the manager made much of what I’d done. It was embarrassing.

Footnote: A week later I was fired, because the manager said I’d made him look bad to corporate. He said he was in hot water because McD’s is a team effort, and I stood out instead of blending in as part of the team. Seriously.

It was right after that I joined the Navy. I have rarely set foot in a McD’s since. But when I do, I look for employees who stand out. There haven’t been many. So I guess the team training works.

Dave

You were a threat to him. Stuff like this still happens they just dont tell you why.

 

[T_R_Oglodyte]

When I worked in McDonald's in high school our managers regularly rewarded those who stood out.

At the time we sold regular burgers for $0.15 and cheeseburgers for $0.25 (that gives you some idea of how old I am!). The main manager told me one time that they didn't make money on the hamburger; those were just about break-even. Where the store made money was on the cheeseburgers. He said that if cost them $0.15 to make the burger, it didn't cost 2/3 again as much to put a slice of cheese on the burger after it came off the grill.

 

[T_R_Oglodyte]

You were a threat to him. Stuff like this still happens they just dont tell you why.

Good managers make a difference. The store that I worked at (Nicollett Ave. So. and 82nd Street in Bloomington, MN) was reportedly one of the five most profitable franchises in the company.

 

[Panina]

Good managers make a difference. The store that I worked at (Nicollett Ave. So. and 82nd Street in Bloomington, MN) was reportedly one of the five most profitable franchises in the company.

I worked for mcdonalds for a year and a half when I was 18. Unlike others I loved it. The owner was the manager. Management from corporate would come in to order and rate service and how food was prepared. I was their fastest counter person, could serve 4-5 while others served one. I moved because each lunch hour the boss gave a $20 incentive for those with the highest total. That was allot of money then. I won about 8 out of 10 times.

They decided to train me to cook as a backup. Soon after being trained someone called out sick. I had to cook and one of the highest corporate people same in to order. When I put the order on the work station, the cashier said I hope you have a job after this. This corporate head came to the back and asked who cooked the egg mcmuffin. I said me, he shook his head, I though oh no......he told me it was the best egg mcmuffin he ever ate, prepared perfectly. My boss gave me a nickel an hour raise.

Fast forward I became an assistant manager and was given a dime an hour raise. I asked for a dollar. He told me he would get back to me. When he did he gave me a quarter. All I could think was I would lose all those $20 bonuses, I was cheap asking for $1, that was $8 a day.

I was pissed and within two weeks found a job as a bank teller, in the days they paid good, for two dollars an hour more. The boss was so upset I was leaving he offered to match it. I went to the new job. Right choice I ultimate passed an aptitude test with the bank and was trained as a programmer and worked my way up.

 

[Panina]

You were a threat to him. Stuff like this still happens they just dont tell you why.

I actually did the profit report for a store. Good profits were on beverages and side. Some sandwiches were loss leaders and many had very small profit margins. That was 40 years ago. The store just broke even. The owner was putting his time in to get a more profitable store.

 

[DaveNV]

Good managers make a difference. The store that I worked at (Nicollett Ave. So. and 82nd Street in Bloomington, MN) was reportedly one of the five most profitable franchises in the company.

At the time, the Ala Moana store was the second-highest grossing McD's in Hawaii. The Waikiki location was first, and Hawaii Kai was third. All of them were franchises owned by the same family that owned the Foodland franchises in the state, and I think the Dunkin' Donuts franchises. They weren't hurting for money, that's for sure.

When I was there, McD's was making a big deal in advertising about "Change back from your dollar." A plain hamburger, small fry, and small soft drink, with sales tax, came to 97 cents. In those days the orders were tallied on tablet paper, and the window person had to do the math by hand. Before they'd let me work the window I had to prove I could do math (fast!) in my head, and that I could count change back to the customer. It was a major deal. Now everything is pictures, or you order it yourself from a lobby kiosk, and the register tells the cashier how much change to give. It's probably faster, but it sure takes a lot of thinking out of the job.

@Panina, you are probably right about the Manager being threatened. He was only a few years older than me, and had likely worked his way up the "food chain" (my joke) at McD's. I worked at three different locations over about a two-year period. It was never a career path for me, so I would have eventually left any way. He just gave me the nudge I needed to join the Navy. That worked out better in the end, I think.

Years later, I held open a door for his widow in San Diego. I was going into a Mall store, and she was coming out with an armload of several bags in her hands. I held open the door for her, and she thanked me. Nice lady. She owned the San Diego Padres at the time.

Dave

 

[mentalbreak]

Good managers make a difference. The store that I worked at (Nicollett Ave. So. and 82nd Street in Bloomington, MN) was reportedly one of the five most profitable franchises in the company.

Woah. Small world! My aunt and cousins lived in the apartments across the street from this location for decades. I grew up playing ball in the apartment yard (or the park just north of the apt on 1st ave), and walking to the grocery store or McDs. I think both cousins worked there at one point or another.

 

[T_R_Oglodyte]

Woah. Small world! My aunt and cousins lived in the apartments across the street from this location for decades. I grew up playing ball in the apartment yard (or the park just north of the apt on 1st ave), and walking to the grocery store or McDs. I think both cousins worked there at one point or another.

What a memory lane you opened up!!! I distinctly remember when those apartments were built.

My Mom did most of her shopping at that grocery store. She didn't drive, so when I got my drivers license one of my chores was to take her there for grocery shopping.

I grew on Grand Ave So, (between Nicollett and Lyndale), just off 76th. When I walked to work at McDs, I crossed I-494 on the RR bridge. (I think it's still there). If you know where Candlewood Suites is on 77th, that was a lumber yard at the end of the block.

***********

When I worked at McDs, our store still made French fries from raw potatoes. The store was staffed with a full-time crew and a part-time crew. The part-time crew was all high school boys. (The store didn't hire any females.)

The full time crew showed up about 10 am and got the store ready to open for lunch at 11 am. They took care of the lunch crowd. During the afternoon lull, they peeled, sliced, and blanched raw potatoes for French fries. About 4 pm, the high school work force came in to help during dinner. The full time crew left about 7 pm, and the high school crew worked staggered hours until closing.

******

The full-time crew was an interesting collection of people. Looking back, I wish now I had spent more time getting to know some of them. Most of them were high school dropouts. At least a third had done time for various lesser offenses. Typical wage for them was about $1.50/hour. (As a high school kid, I started at $1/hour at McDs, and was making $1.20/hr when I left for a union job in a grocery store where I made $1.675/hour.) For the full-time crew, working McDs was a chance to show they had rehabilitated themselves. Their goal was to work at McDs for a couple of years and get a letter of recommendation that said they had showed up for work everyday, had worked diligently and followed instructions, were neat and clean, etc. They could parlay that into a job that had a better opportunities, such as working a forklift in a warehouse, being a mechanic, or doing assembly. Some of them even went to Hamburger U in Illinois, and got positions as assistant managers at McDs. (That was they story for on my assistant store managers.) McDs was an entry level job, not a career.

******

When I worked at McDs, McDs had French fries as good (or better) than you could get anywhere else. In my high school crowds, people went to McDs primarily because of the fries. About six months after I quit they switched to frozen fries. The decline in quality was immediate, and McDs was no longer THE place to go for fries. For most of the people I knew, Country Kitchen and A&W became the preferred teen-age hangouts. Country Kitchen was sit-down. A&W French fries were the same quality as McDs now frozen, but we could get much better root beer. The A&W burgers weren't as good, so it was McDs only entered the picture when we wanted something fast and burgers were more important than beverage.

******

When I started working at the McDs on Nicollet and 82nd (actually it was 80th, now that I think about it), the store was walkup only, with the Golden Arches by the street and some tables outside. Pretty similar to what Dairy Queen stores looked like at the time.

It was a challenge during subzero temps. It was impractical for us to wear gloves at the window because we handling food and filling bags, and the cold air would blast through the service window when you were giving out the goods and handling money.

Of course the outside tables were useless in the winter, so while I was there they enclosed the walk-up windows, with some indoor tables and seating. I think our store was one of the first where they enclosed the walk-up windows. The whole enclosed area was done in tile, almost all of which was white, including the tables and the seating areas. All which needed constant cleaning, since white showed dirt easily.

 

[vacationhopeful]

I worked for 8 months (partime for 6 school time months & fulltime for 2 summer months) before college in a hamburger/KFC chain called "Gino's". The assistant manager LIKED unhooking the girls' bras ... he was maybe 5 years older than us. His also like sending the 'new' girls up the open metal steps for a 'view'. The other "Linda" and I got him FIRED just before I left for colllege. The store manager had a manager trainee 'placed' as a NEW counter gal. I was heading off to college 1000 miles away and did not want to be involved in any legal actions.

He did get his job back ... was transferred to another store and within a few months, got fired for the same behavior.

He was married with 2 kids under 3 when he started workin at my store.

 

[joestein]

I worked for 8 months (partime for 6 school time months & fulltime for 2 summer months) before college in a hamburger/KFC chain called "Gino's". The assistant manager LIKED unhooking the girls' bras ... he was maybe 5 years older than us. His also like sending the 'new' girls up the open metal steps for a 'view'. The other "Linda" and I got him FIRED just before I left for colllege. The store manager had a manager trainee 'placed' as a NEW counter gal. I was heading off to college 1000 miles away and did not want to be involved in any legal actions.

He did get his job back ... was transferred to another store and within a few months, got fired for the same behavior.

He was married with 2 kids under 3 when he started workin at my store.

Somewhat similar..... worked at a KFC when I was a freshman in college. Manager was a balding 30ish man who thought way too much of himself. He used to tell me and other kids working there how he can have any the girls working there anytime he wants. So I told the girls, maybe called him an as*hole. Someone snitched on me and he fired me. Overall good learning experience.

 

[WVBaker]

Regrowing hair follicles might lie in a chemical used to cook McDonald's fries, a team of Japanese scientists suggests.

https://www.businessinsider.com/dimethylpolysiloxane-in-mcdonalds-fries-could-cure-baldness-2018-2

Can I have a Big Mac and a large order of hair regrowth fries please.

 

[PigsDad]

Can I have a Big Mac and a large order of hair regrowth fries please.

Do you eat them of smear them on your scalp?

Kurt

 

[SandyPGravel]

I met him once. I was working the counter at the McD’s in Ala Moana Center in Honolulu the year I graduated high school. The Corporation bigwigs were having a convention in Hawaii, and they dropped in unannounced. During the time it took the person at the next window to assemble his order, I did about four, all the while adhering to the “7 Steps to Being a Proper Window Person.” (McD corporate training manual stuff.) After he got his order, he leaned over and congratulated me on being the best “window person” he’d ever seen at McD’s. I thanked him and asked if he was connected to the company in some way. He smiled and said, “I’m Ray Kroc. I own the joint.” He laughed as he went into the back to talk to the store manager. I was later singled out to the rest of the crew, and the manager made much of what I’d done. It was embarrassing.

Footnote: A week later I was fired, because the manager said I’d made him look bad to corporate. He said he was in hot water because McD’s is a team effort, and I stood out instead of blending in as part of the team. Seriously.

It was right after that I joined the Navy. I have rarely set foot in a McD’s since. But when I do, I look for employees who stand out. There haven’t been many. So I guess the team training works.

Dave

You should have written a letter to Ray thanking him(sarcastically) for getting you fired! "Thanks for noticing what a good job I was doing, you got me fired. Sincerely @DaveNW " Maybe he would have given you your own franchise.

 

[DaveNV]

You should have written a letter to Ray thanking him(sarcastically) for getting you fired! "Thanks for noticing what a good job I was doing, you got me fired. Sincerely @DaveNW " Maybe he would have given you your own franchise.

HAHA! Maybe I should have. At the time, I was pretty angry.

Dave

 

[AnnaS]

I was also a McDonald's employee/Crew Chief while in high school. Even though I always read how bad it is for you, I always enjoyed it. Now we very rarely eat fast food. I know their highest profit items were french fries and soda.

 

[PigsDad]

Even though I always read how bad it is for you, I always enjoyed it.

Are you referring to the food, or working there? Personally, I think everyone should work fast food at least once in their life. It makes you appreciate other jobs!

Kurt (former Burnsville, MN Wendy's worker)

 

[AnnaS]

Are you referring to the food, or working there? Personally, I think everyone should work fast food at least once in their life. It makes you appreciate other jobs!

Kurt (former Burnsville, MN Wendy's worker)

Both - I enjoyed working there (even the Pastry Shoppe). Even though the food is not good/healthy, I like it. Of course, I don't eat any fast food the way I used to many years ago. DH and I will get it here and there and consider it a "treat".

 

[easyrider]

For a few months in high school I was a burger flipper. This was when the economy tanked in the 70's. Many of the people I worked with had their degree's and couldn't find work so they ended up at the Arctic Circle.

That Arctic Circle location is still a burger restaurant chain with a different name. When I saw how much it was sold for back in the 90's I kind of thought that was a good way for the owner to retire. That retired owner currently lives about a mile away from us.

Bill

 

[MULTIZ321]

For a few months in high school I was a burger flipper. This was when the economy tanked in the 70's. Many of the people I worked with had their degree's and couldn't find work so they ended up at the Arctic Circle.

That Arctic Circle location is still a burger restaurant chain with a different name. When I saw how much it was sold for back in the 90's I kind of thought that was a good way for the owner to retire. That retired owner currently lives about a mile away from us.

Bill

Hi Bill,

Curious as to where the Arctic Circle location is

Thanks

Richard

 

[DaveNV]

they ended up at the Arctic Circle.

Bill

Growing up, I used to eat all the time at the Arctic Circle location in Bellingham, WA. Their secret sauce was (and probably still is) a mystery.

Dave