8 Secrets from the McDonald's movie

Everyone has had a McDonald's meal before. Surely. This brand probably represents the greatest franchise the world has ever seen. It grows so fast that planet Earth witnesses a new McD's franchise birthed every 14.5 hours!

As part of my research on franchising, I watched a movie called The Founder and there were quite a few takeaways. They apply not to those who seek to franchise, but also business owners. Let me journal and share my thoughts.

Solve a Problem

If you're going to be successful, you need to be the solution to someone's pain. And to be truly great, the business should deliver a mind-blowing standing ovation of a product that make competitors smack their heads and say, "why didn't I think of that". The Richard & Maurice McDonald brothers revolutionised the typical lousy diner experience by serving food fast. Extremely fast. 30-second fast, when the standard was many, many minutes and often wrong.

Seek the Blue Ocean

Back in 1929, people simply did not eat burgers out of paper bags, nor did they walk to a counter to order their food for takeaway. It took persistence and education to change the culture because it simply made sense and met a need - delicious food, fast. While the brothers worried whether or not it would work, they had a unique selling proposition that was strong enough to overcome the resistance.

Laser Focus

The brothers tore apart the menu and only offered the bestselling items, ignoring the rest of the less popular items. They mandated that franchisees followed their streamlined menu to a T (to the point of ensuring only two pickles are put in every burger) and served food veryyyy fast. In many companies, there is a temptation to sell every product and service under the sun, much to our detriment. We potentially divide our attention and don't do a good job at delivering the most popular requests.

The Right Partners

There are two sets of partners in this story. The McDonald brothers were strategic and smart, but lacked the flair of a showman who could sell franchises to almost anybody. To succeed, they needed someone who was willing to get out on the road and fill the gap of preaching the McDonald's gospel.

Often, we need to identify what we are not good at, then find the right person to take up that role. Moulding a person to become someone they are not will likely see mediocre results. Ray Kroc was everything that Richard & Maurice were not. Their superpowers widely differed, and that allowed the franchise to grow. While there were issues with Ray's integrity, that's another lesson in itself.

The other partners you need to choose wisely are the franchisees. You will be working with them for a long, long time and they need to conform to certain values. Don't be hasty to choose the first person who has cash in their pockets as you may regret it. In the movie, the super slick Ray Kroc sold franchises to country club buddies who didn't care about following standards or operations manuals. They felt that the franchise could be run in any way they liked.

This leads to another discussion on which is better: owner-operator or franchise investors. The former means the owner has a lot of skin in the game - he/she is the person behind the business. The latter could be a person who buys the franchise to generate passive income - staff and managers are all hired. For your business model, you will need to decide if one is more important than the other.

Low Barriers to Entry Fuels Exponential Growth

Don't charge an arm and a leg (and two kidneys) to buy your franchise. Then you will get more people interested, which generates buzz and gets your brand out there in front of the masses. Ray Kroc made it easy to sign up for the McDonald's franchise and was able to bring on board many interested parties in a short span of time. Can you do the same? Perhaps offer instalment plans for the franchise fees?

The Power of a Brand

In one scene, Ray Kroc told the McDonald brothers that even they didn't know the driving force behind their success. It wasn't in the food or processes alone. It was in the name. The brand. It was because of "McDonald's" that the franchise could expand quickly. Ray was very sly and even trademarked the name, which allowed him to force the founders, Dick & Maurice to rename their original McDonald's outlet to The Big M. It's a good lesson to learn as you expand your presence.

The Power of the Network

I believe strongly in the collective power of many brains. Through the network of franchisees, one of them discovered a way to reduce power consumption that was needed for refrigerating milk for milkshakes, which was by using a powdered alternative that tasted the same, minus the need for a cold room. That "small discovery" helped save immense amounts of money for the others and helped everyone succeed even more.

Founders are often lonely and have access to a smaller team. Encourage innovation at all offices, listen to ideas and try them out. You'll never know what could be a hit. Even the world's most famous burger - the Big Mac was developed by a franchisee.

Don't Ignore the Legal Paperwork

Often, we fail to realise how important getting the legal work done until it is too late. It helps set expectations and gives the business a backbone to stand on in the face of uncertainty. In The Founder, the McDonald brothers failed to register their prized possession, "McDonald's" as a trademark.

And they failed to learn from that oversight when they negotiated the sale of the entire business to Ray Kroc. Part of the sale included a handshake agreement to continue the annual 1% royalty of the original agreement to the brothers, but because it was never documented, this was never honoured.