Page 57 - Everything I Know About Business I Learned

Relationships

Many of these relationships in the early years went way
beyond a normal customer-client association. Pat Paterno, a sales
manager for a milk company that supplied milk products from
1961 through 1991, told me how his company actually helped a
new operator financially. “Fred called me up one time and asked
if we could help out a new operator in upstate New York,” Pat
said. “The guy needed money to open the store. So we lent him
the money, and he became a client as well. He paid us back, and
everything was fine.” Unusual perhaps, but it fostered a pay-it-
forward element that’s so pervasive in the system. Perhaps that
might explain the rest of the story, as Pat reminisced with me
about a time years later, when the situation was somewhat
reversed. At the time, his employer could not afford to send him
to an operator convention. “I mentioned to one of the operators
that I don’t know what to do. I don’t want to say ‘I will pay for
myself,’ I don’t want the company to look bad, I don’t know how
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to handle it. I don’t think that I am going to go.” Sensing his dis-
appointment, the operator made a few phone calls and within a
week told Pat the operators were paying for the trip. And they
wanted his wife there as well. “I tell ya, tears came to my eyes,”
recalled Pat. Those were how deep the relationships grew out of
mutually working together to help each other.
Vendors put so much faith in McDonald’s and its people that
they even bailed out the company in 1959 when it was about to
lose everything on its first real estate deal gone bad. It seems that
construction money was pocketed, leaving contractors unpaid,
and resulting in uncompleted stores. As creditors put pressure
on McDonald’s, the company was faced with the need to raise
$500,000 cash in a matter of days (money it didn’t have in those
early years) or face bankruptcy. “McDonald’s was actually out
of money and couldn’t make payroll,” recalled Ted Perlman, a
supplier. Ted’s father, Lou Perlman, was one of a handful of ven-
dors who pitched in $100,000—a lot of money in the 1950s—