Page 239 - Everything I Know About Business I Learned

Epilogue

reward programs and recognition tools: the simple dinners, the
stock options, the promotions, and much, much more.

3. Three-legged stool. This concept, totally without peer in its
early inception, and still unique today, is a symbol of the
integrity and relationships that run deep with all three of the
legs: owner/operator, supplier, and corporate staff. The word
partner came up in numerous conversations, and although it
may be a stretch to use that term literally, the point was evident.
Few, if any, organizations adopt the McDonald’s style of nur-
turing the mutual respect and interdependence that go beyond
the superficial. Ray Kroc, however, saw that these kinds of part-
nerships are the very key to developing a mutually successful
business system that synergizes all parties.

4. Franchise model. The system thrived on the full-time, best
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efforts of all licensees. The model is based on the belief in the
individual store operating independently but dependent on the
strength of the system. Territories were never given away to cor-
porate partners. Instead, the system relied on individual entre-
preneurs. This seemingly innocuous aspect—requiring full-time
operators committed to their restaurants and on premise—was
a clear advantage. The system needed working, hands-on fran-
chisees, and there was no way to dodge that requirement, so
individuals who sought the “quick buck” and easy dollars never
made it to the interview in the first place.
But there was another very important distinction: the finan-
cial model that Harry Sonneborn developed. While Ray had
shunned many of the methods that a franchisor turned to in
order to generate income, he had not thought about what might
replace it. Harry came in with the novel approach of leasing the
real estate back to the franchisee, with a markup, effectively
making McDonald’s the owner of one of the largest portfolios