Page 38 - Everything I Know About Business I Learned

Everything I Know About Business I Learned at McDonald’s

And it inspired first-rate results, for both McDonald’s and the
suppliers, who in the spirit of growth collaborated as partners.
“I remember a meat supplier in Columbus, Ohio—Larry
Frank—who started out in a little meat market, a little one-cylin-
der automatic, who really grew big and who had that relation-
ship with McDonald’s, and his quality was just so great,” Tom
Dentice, a retired executive vice president, told me.
Harold Kestenbaum, a well-known franchise attorney and
author on the subject, who is of counsel to Ruskin Moscou
Faltischek in New York, believes that McDonald’s honesty and
integrity lay the foundation for a solid partnership between cor-
porate and vendors—a quality that franchisees have always
appreciated. This partnership translates to better economies of
scale and, ultimately, pricing. “I’m not sure other franchisors
haven’t copied the McDonald’s system,” he said. “McDonald’s
doesn’t have to put out an ad for franchisees. People want them.
8
A McDonald’s franchise—it’s like gold.”
The suppliers’ growth spoke volumes about McDonald’s
integrity. Later, as the company moved from individual bakers to
dedicated regional McDonald’s suppliers, it “immediately started
to establish that same solid relationship with the new suppliers,”
Tom said. “In Ohio, where I was at the time, when we went to
a single-purpose bakery, these folks spent millions of dollars to
put up that bakery on a handshake. Think about that.”

Lesson Learned
Conduct your operation with honesty and integrity, and vendors
will put their faith in you—perhaps even take risks with you
because you have won them over. These partnerships can
generate the kinds of results where the organization, and all the
stakeholders involved, stand to benefit. It’s a win-win situation.