Thefilm closes in 1970 with Ray preparing for a speech in which he praises himselffor his success in his mansion with his new wife, Joan.
The epilogue revealsthat the brothers were never paid their royalties which could have beenapproximately $100 million a year. 1. Detailedreview and opinion on the film:1.1.The entrepreneurial successes and shortfalls of the McDonaldBrothers and ray Kroc:Curiosity: Curiosity is an important characteristic toget new ideas.
Due to Ray Kroc’s curiosity to investigate the business thatordered 6 multi-milkshake mixers from him, he was able to hear the McDonald’sstory. Therefore Ray Kroc’s curiosity is an entrepreneurial success.To besuccessful, an entrepreneur must be able to deconstruct and reinvent hisor her business to ensure that the business is satisfying the needs ofcustomers efficiently to make a profit. The McDonald brothers where able torecreate their diner so that it would enable them to deliver food faster, witha high-quality efficiently. The brothers were able to deconstruct thetraditional diner, they did this when they drew the layout of the kitchen onthe tennis court multiple times. Once the model was perfected, the layout wasdesigned to fit the kitchen with custom utensils which ensured high-qualityfood. This is a success for the McDonald bothers on their entrepreneurialdiscovery.In order foran entrepreneur to be successful he must be competitive.
The McDonaldbrothers where a competitor in the fast food industry of the 1950’s becausethey had an idea that no one else had. Due to the uniqueness of their idea,they were able to hold a competitive advantage over drive-in diners of thetime. The brothers wanted to maintain their competitive edge by not droppingthe standard of food they were producing by franchising the business. This madethe McDonald brothers successful because of how they conducted the business andtheir morals of what they wanted the McDonald’s name to be.
Negotiatecontracts carefully: a wellnegotiated contract can create a defence and add to a business’s competitiveadvantage. Initially, Ray Kroc had agreed to a complex contract that stipulatedthat all decisions had to go through the McDonald brothers. However, instead ofputting this down on paper that the deal was 1% royalty to the McDonaldbrothers. Ray Kroc offered the brothers a handshake deal on this term. TheMcDonald brothers failed to see that the handshake deal would put them at adisadvantage because they would lose that part of the deal. Due to how badlythis deal was conducted, this is seen as a shortfall on the McDonald brother’sside because of their negligence in not understanding what was required for thedeal to be successful.To besuccessful, an entrepreneur must select the right business partners. Thepartners should provide some form of value to the business.
To expand McDonald’s,Ray Kroc wanted to have multiple franchise owners who would follow his guidelinesof discipline, automation and standards. The first set of franchisees heselected were rich and had their own way of thinking which made it difficultfor Ray Kroc to make them implement things in their branches that he wanted.Eventually, he realised that if he selected the right individuals, they wouldfollow what he wanted; he successfully learnt that if he selected hard-workingcouples from the middle-class he would have franchises that followed hisguidelines.
1.2.The Professionalisms, ethics and effective business practice scenariosin the film: It was wrongof Ray Kroc to want to change the milkshake formula and make the milkshakesfrom powder but he was trying to cut the cost of refrigeration to stop thebusiness from going into debt. What Ray Kroc did was try to undermine theMcDonald Brothers by making the franchises stop using ice cream to makemilkshakes because it was very expensive to pay for the storage of the icecream, so he asked the franchises to change over to the powder formula. However,Ray was trying to prevent debt that he couldn’t afford due to the percent ofwhat he earned through every franchise. This is questions whether or not theMcDonald Brothers were fair in what they paid Ray Kroc, thus questioningwhether Ray Kroc was ethical when he tried to implement powdered milkshakes.
Thehandshake deal. The handshake deal is a scenario that questions the ethicalintentions of Ray Kroc and whether what he did was just towards the McDonaldBrothers. Long term, Ray Kroc robbed the McDonald brothers of their royaltywhich could have amounted to possible millions today. However, it is debateablethat if Ray Kroc had not made that handshake deal, McDonald’s would not bewhere it is today. The nextpoint questions professionalism and ethics.
Ray Kroc tells Joan Smith that hefounded McDonalds, which he didn’t. It was unethical because ray Kroc is lyingand misleading the Smiths’ into what the will get when they become a franchiseof the McDonalds brand. The lie also questions Ray Kroc’s whether or not RayKroc has integrity and is trustworthy. In the film,one of the franchises Ray establishes loses its way and starts selling friedchicken. This is not an effective business practice because it could havechanged the way customers thought of the brand and what the brand had to offer.The franchisee was trying to cater to its customers by offering them what theywanted, fried chicken.
Perhaps the franchisee thought that he would make ahigher profit by offering customer what they wanted.When RayKroc opens his new business, franchise realty. He makes a suspicious movebecause he threatens the contract that he has with McDonald brothers. The movegives Ray the courage to defy the brothers’ authority. This is an example ofand unethical business practice because Ray put his contract with the brothersat risk when he did this as he would be cutting them out of some money. It canbe debated that Ray was looking out for himself and his franchisees by owningthe land instead of renting it.
1.3.The skills used to manage conflict in the film:The accommodatingapproach: The McDonald brothers used this approach at conflict management withRay Kroc when they let him have his way.
The brothers should not have let RayKroc have his way at the time because it led to him taking advantage of them.Instead, they should have applied a more cooperating approach to satisfy thedemands of both parties and this would have showed Ray that they were willingto listen to what he had to say.The competingmethod of conflict management is seen when Ray Kroc confronts one thechains that starts selling fried chicken instead of hamburgers. This ispossibly the best way that the situation could have been handled because hadRay taken any other approach, other franchisees would have made their ownchanges to their stores and Ray would be overrun by his franchisees.When RayKroc asked the McDonald brothers to review his contact and he was denied, theMcDonald Brothers took an approach that avoided conflict. This was not the mosteffective way to handle the situation as it resulted in defiance from Ray. TheMcDonald brothers should have taken a more compromising approach as itwould have ensured that both parties would have been satisfied with the resultsthrough a common middle ground.
The conflictof the blank cheque. When Ray Kroc gives the McDonald brothers a blank cheque,he challenges them. The McDonald brothers should have adopted a competingmethod of conflict management as it could have helped them earn their 1%royalty if they had. Instead the McDonald brothers chose to avoid conflict andthis gave Ray the upper hand and he did a gentleman’s agreement.Nearing theend of the film, the McDonald brothers are forced to remove their name from theSan Bernardino store while Ray Kroc opens a McDonalds opposite the brothers’store. The McDonald brothers were unable to compete with the store oppositethem and so they avoided conflict. This could have been the best approach atthe time because the brothers would have been tired of seeing Ray Kroc and sothey gave up. They should have reinvented themselves and taken a competing approachtowards the store on the other side of the road.