Michael Keaton stars in a new movie about Ray Kroc, the businessman who founded McDonald’s. The movie, appropriately called “The Founder,” will be released on August 5. “The Founder” explores a little known detail about the McDonald’s fast food empire, namely, that Ray Kroc essentially stole the business from the original owners, the McDonald brothers. Kroc was a milkshake machine salesmen when he discovered the McDonald’s restaurants doing well in Minnesota. When Kroc finally wrested control from the McDonald’s brothers by buying the rights to their franchise, he built a restaurant next door to their last remaining fast food emporium with the intent of driving them out of business for good.
The controversial movie is aiming to be the “The Social Network” of fast food. “The Social Network is Aaron Sorkin movie about Facebook creator Mark Zuckerberg, which claimed Zuckerberg cheated the Winklevoss Twins out of millions by cutting them out of the business. The untold Ray Kroc story comes at a complicated time for the world’s most successful fast food chain, as the company introduces new menu items and more customization in an attempt to be all things to all people.
But does McDonald’s really need to dramatically change in order to stay relevant to consumers? Back in 2015, the company announced that it was taking dramatic action in order to reverse a big drop in American sales. The company replaced its CEO with Steve Easterbrook, who was then the CEO of branding for the company. His ascension is no coincidence, since McDonald’s execs believe the company is having difficulty connecting with younger customers who have no personal history with McDonald’s.
However, so far the new approach has lurched from concept to concept. Whereas Ray Kroc saw that providing burgers and fries in “30 seconds rather than 30 minutes” was a concept that would dominate the marketplace, Easterbrook’s team isn’t as certain about the brand’s identity. In late 2015 it ran ads proclaiming that the Bic Mac “will never be kale.” However, just weeks later the company was touting its new kale-based breakfast burritos as a healthy breakfast alternative.
It believes adding more menu items will appeal to consumers who say they want to eat more healthy. Although people say they want healthier options, it is not clear that they will choose to eat at fast food restaurants in order to get healthy.
Fast food restaurants are also facing a stiff challenge from fast casual, which is trying to disrupt the restaurant industry in the same way McDonald’s did in the 1950s, by creating its own format. The charge has been led by companies like Chipotle and Panera Bread, which positioned themselves between fast food and casual dining. These restaurants promise to offer fresh food that is better quality than the food offered by McDonald’s, but without full table service associated with casual dining.
In a bid to take on fast causal eateries like Five Guys Burgers and Fries, McDonald’s is now installing “create your taste” kiosks in thousands of its franchises. The kiosks let consumers custom order their burgers, adding any toppings they want to Big Macs and Quarter Pounders, even allowing them to add additional patties. The burgers take ten minutes to create and cost $10.90, a big markup over its normal Big Mac cost of $3.95. The kiosks offer premium burgers that are made to order in a way that is more akin to fast casual dining. The idea of expensive burgers that take longer to cook flies directly in the face of what made the company so popular during Kroc’s era: providing fast burgers on the cheap.
Now comes word that McDonald’s is testing garlic fries in San Francisco, “clean” chicken nuggets in Oregon, mini and super-sized versions of the Big Mac (Mac Junior and Grand Mac) in the Midwest and breakfast bowls in Southern California. Easterbrook says these efforts are designed to hew closer to Kroc’s original vision by having local franchisees exert more control over their menu, catering to local tastes.
“We are running McDonald’s differently, and building on our unique advantages as we strive to become a modern and progressive burger company,” said Easterbrook back on a conference call back in January. Although the end result is unknown, early indications show McDonald’s sales up by just over 5 percent. This may be an early indication that the company is starting to solve the branding puzzle.