"We are such stuff as dreams are made on." Shakespeare, The Tempest

Saturday, February 11, 2017

The Founder

Tension between the founder of a business and the managers that eventually assume control is perhaps unavoidable. Such tension can be cut with a knife in the film, The Founder (2016), which tells the story of how McDonalds went from Dick and Mac McDonald’s restaurant in San Bernardino, California to a nationwide corporation headed by Ray Kroc. From an ethical standpoint, I submit that both the McDonald brothers and Kroc come out as less than salubrious.
With regard to Dick McDonald, his incessant “no-saying” to Kroc’s suggestions for improvements and expansion left Kroc in a strangle-hold of sorts. This is most evident when Dick held to the 1.5% going to Kroc in spite of the fact that Ray could not cover his costs. Excessive inflexibility in a contract puts it under severe stress, and few people would blame Kroc for turning to the real estate under the franchised stores for not only needed funds, but also some control. In short, the McDonalds brothers should have renegotiated the contract at Kroc’s request.
By implication, a political leader who clutches at control at the expense of permitting even adjustment in public policy or the governmental system itself to take account of a changing society unknowingly risks losing the control so ardently desired. Even continued refusals to work with other political parties in a legislature can spell defeat at the next election for the party in power. Like gel being squeezed in a hand, the stuff will slip through the fingers if the pressure is too much.
With regard to Ray Kroc, his refusal to act on his oral promise that the McDonalds corporation would pay the brothers a royalty of 1% in perpetuity is unethical. So too is his insistence that the McDonalds name be removed from the brothers’ original McDonalds restaurant. The brothers wanted to retain that particular restaurant so they could give it to their employees. The McDonalds corporation would have had control of that location, so I suspect Kroc’s motive was to be rid of the brothers, given the tension in the relationship when Kroc was under their control. Again we see that the brothers’ tight grip on control, against virtually any changes in the restaurants, worked against even the brothers’ own interests, which included being able to retain their own name in the restaurant they managed in San Bernardino. In short, it pays to work with people in such a way that there is some give and take, even and I would say especially if a contract gives someone the right to rigidly maintain total control.  Smallness has a way of losing, eventually.