McDonald’s isn’t about burgers, it’s a real estate business.

If you haven’t seen the movie Founder, starring Michael Keaton as Ray Kroc, the supposed founder of McDonald’s, treat yourself to a solid movie based on a true story.  Especially if you aspire to be an entrepreneur, this is a movie that shows you that entrepreneurs see what others don’t see.  Or in this case, it takes several entrepreneurs to make McDonald’s what it is today.  A global dominant fast-food chain that signifies an American spirit and its waistline, ha!

The biggest takeaway is the line that Harry J. Sonneborn, played by B.J. Novak from the Office says to Ray Kroc while he’s digging through his books that are in the red.  He says your problem is that you’re treating this like a hamburger business making a few percentage points off of 15 cent burgers.  You’re not in the burger business, you’re in the real estate business.  Instead of allowing your franchisees to find their property and lease the property from someone else, they should be leasing the property you find, that you own, putting you in full control of the business.  And if they do anything to mess with the brand or the business, you terminate their lease.  

Ray Kroc took the system that the McDonald’s brothers created and turned a burger business into a real estate empire.  The system to get food in 30 seconds rather than 30 minutes was essential to keep residuals coming in to pay the business owners enough to make a franchise worth owning, and those owners pay the lease and a percentage of their residuals to the owner of the land… the McDonald’s corporation.  So McDonald’s is in the real estate business… not the burger business.

Brilliant!  How can you see what others don’t see and bring value to the world as well as your own pocketbook?  I don’t think you necessarily have to be the backstabber Ray was portrayed in the movie, but the true brilliance was the Sonneborn character that saw Mcdonald’s as a real estate business rather than a burger business. 

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