There are three reasons to read Grinding It Out
by Ray Kroc, who developed the world’s best fast food franchise, McDonald’s.
The first is to understand how great salesmen
work. The second is to understand how to lead and develop a great business. The
third, and the one which this review will dwell on, is to understand how a good
franchise should work.
While there is a difference between a franchise
and a symbol group, there are a great many independent retailers in the UK
considering some sort of tie up with a wholesaler or buying group to propel
their business forward. Kroc’s thoughts provide a useful benchmark to compare
what is on offer.
“There is a basic conflict in trying to treat a
man as a partner on the one hand while selling him something at a profit on the
other,” says Kroc.
When setting up the McDonald’s franchise system,
he decided that it would not supply its operators. This was because he believed
that once in the supply business, he would become more concerned on the sales
he was making to his franchisee rather than with “how his sales are doing”.
A second key idea was that McDonalds would be a
restaurant system that would be known for food of consistently high quality and
uniform methods of preparation. “Our aim, of course was to insure repeat
business based on the system’s reputation rather than on the quality of a
single store or operator.”
The basics of good service had to be “stressed
over and over.” Kroc was always reminding everyone of QSC and V: quality,
service, cleanliness and value.
In the 1970s when Kroc wrote the book, a
prospective franchisee had to pass an interview and work evenings or weekends
in a local McDonald’s store. Only then would he be able to put down a $4,000
deposit to join the two year waiting list for a site. And once the site was
agreed, Kroc would ask them to work another 500 hours in a restaurant before
attending an advanced training course.
In exchange for 11.5% of their gross sales, the
franchisee would get product development, marketing advice, training, national
advertising and continued supervision. “I think it’s a hell of a bargain,” Kroc
remarks.
When McDonald’s opened up in downtown Chicago,
Kroc was delighted as he knew every worthwhile location in the city from his
work as a salesman before he took on fast food.
“If you’re sincere about serving your customer
better, you learn the layout of his basement, what kind of alley access he has,
and so forth. You might be able to suggest a better way for him to handle his
stock or deliveries. That’s what I always did and now it’s paying off for me in
detailed knowledge that helps McDonald’s.”
While property deals initially propelled the
corporation forward, Kroc stressed that he was in the hamburger business. His
book shows his focus on creating great value for others. It has more meat in it
than a Big Mac and is even better value. Some of his values may have dated but
this book is packed full of energy and ideas. Enjoy.
For more, see www.betterretailing.com.
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