Page 34 - Everything I Know About Business I Learned

Everything I Know About Business I Learned at McDonald’s

revenue stream that enabled the company finally to begin to
operate profitably.
Still, Ray steered clear of conflicts of interest as he purchased
the company from the McDonald brothers, Fred told me. In the
fast-food industries, some suppliers “were also cheapening the
meat,” Fred said, referring to the process of adding more fat to
the meat—a verboten practice in a company that rapidly imple-
mented its 100-percent-pure beef, no-additives, no-filler policy.
Ray’s foundation of honesty and integrity has permeated the
organization ever since. And the evidence exists today with sup-
pliers, in corporate, and on the restaurant floor as the three-
legged stool concept, mentioned in the introduction, whose
number one commitment remains delivering quality, service, and
cleanliness, or QSC, to the customer.
As Bob Marshall, a vice president of McDonald’s U.S. restau-
rant operations, put it: “Do one kickback and that whole prin-
4
ciple is out the window. A kickback—when you are operating
on integrity—would have thrown the whole thing; you are
throwing it all away.”

Business on a Handshake
Perhaps the most striking example of McDonald’s honesty and
integrity is its handshake agreements with vendors. Mostly a
thing of the past in virtually every industry, handshake agree-
ments are alive and well with McDonald’s suppliers, even in
today’s litigious society. Many of these suppliers are now sec-
ond- and third-generation businesses, whose fathers took Ray
Kroc at his word.
“I didn’t and still don’t have a contract,” said Frank
Kuchuris, CEO and chairman of East Balt Bakery, with bakeries
across the United States, Asia, and Europe. Frank’s father, Louis,
struck a deal with Ray in 1955. “So many people would look