You don’t have to be a fast food fanatic to know what McDonald’s is, most people recognize what that yellow “M” stands for. Such is the brand presence of the world’s largest fast-food chain today.
The very first McDonald’s was opened on 15th April 1955, in San Bernardino, California, by the siblings Richard and Maurice McDonald. At the time, it used to serve slow-cooked barbecue and had no indoor seating. Which is nothing like the McDonald’s of today. Despite the limitations, their business grew quickly, and sales numbers were impressive.
Soon the competition increased, and the brothers needed a plan to keep up with it. They realized that the majority of their sales were from hamburgers (over 80%). They decided to adopt a new strategy based on three factors: speed, lower prices, and volume. It also included a system called the “Speedee Service System” developed by the brothers, which helped their growth significantly.
To boost the operation speed further, they revamped their business into a self-service restaurant. It was the new McDonald’s where people ordered at the window and silverware and plates were replaced with paper wraps and cups. The Menu was cut short with just nine items that included: Hamburgers, cheeseburgers, three soft drinks, milk, coffee, pie, and potato chips.
Their new strategy worked. The brothers doubled McDonald’s profits and had numerous franchises in Arizona and California. Impressed by their growth and speedy operations, an entrepreneur named Ray Kroc approached them and became its franchise agent in 1954. He opened his first McDonald’s in Des Plaines, Illinois, in 1955.
How Ray Croc Became the Face of McDonald’s?
Ray Croc was a visionary man with a firm belief in innovation. In 1961, he bought the company from the McDonald’s brothers for $2.7 million. He then quickly became a major figure that represented the brand, overshadowing the siblings. After selling the business to Ray, the brothers started calling the original San Bernardino outlet—Big M. Annoyed by this, and to one-up the brothers, Croc opened the McDonald’s on the same block, eventually forcing the siblings out of business.
Croc predicted that the franchise business had huge potential, especially because of its easily replicable menu. Staying true to his vision, Croc founded the Franchise Realty Corporation which took care of the company’s real estate deals and also boosted the franchise numbers.
Many couldn’t connect the dots of QSR with Real estate. Turned out, it was the first CEO of McDonald’s Corporation who had educated Croc about how valuable real estate can be, and how it could benefit the brand. The same Corporation was also responsible for its popular items such as The Filet-O-Fish, Big Mac, and Egg McMuffin.
What Made McDonald’s Famous?
Ray Croc envisioned that there will be 1000 McDonald’s in the United States. If you look at the numbers today, there are over 38,700 restaurants in more than 100 countries. Many factors contributed to the popularity of McDonald’s, let’s have a look at them:
Historically, the McD Menu has undergone multiple revamps. The brothers wanted to simplify the menu and in doing so, they often went for dishes that were easier to make. In doing so, the menu became easy to replicate and appealed to potential franchise owners, and helped them expand their business through franchisees.
The Speedee system
You rarely have to wait in line at their restaurant to get your order. This is because of The Speedee system. The system was unlike anything other restaurants were using at the time. Instead of one expert cook, many unskilled people were employed that were capable of doing specific tasks. It allowed them to assemble the dishes and execute tasks quickly. Today, many restaurants have successfully adopted this system.
The Fast-Food Approach
Originally, the whole idea of the restaurant was built around fast food, where people would buy the meals and leave. Many methods were used to stop customers from lingering at the restaurant to make space for new ones. This unique approach also helped them increase their business.
The presence and the brand presence of McDonald’s is one of the best globally. The red and yellow colors of the brand are engraved in the minds of millions of people globally. Branding played a major role in this. Instead of directly positioning them as better than their competitors, the brand chose to highlight how it provides more value than everyone. The experience at the restaurant, and their advertisement all are made in such a way that leaves a lasting impression on you.
McDonald’s wasn’t an overnight success. The brand faced many blockades along the way to its success. To tackle some of the challenges, the restaurant curated and started to serve a menu based on what country and its culture. This helped them appeal to a wider audience and is one of the major reasons for their global success.
McDonald’s Brand Stats
The restaurant serves around 40, 275 locations. That includes 118 countries and about 69 million people per day. Since 2012, their number of locations has increased steadily, from 34,480 to 40,031 in 2021. In just a year, from 2020 to 2021, the restaurant opened 833 locations worldwide.
Their Global Annual revenue figure for 2022 is $23.18 billion. This is a slight decline from 2021 when it reached $23.22 billion, the most year-on-year revenue increase for the brand in a decade.
The number of employees working directly for McDonald’s is 200,000. This excludes the two million people employed by the independent franchisees.
In 2012, 440,000 employees were employed, since then, the number of employees directly working for McDonald’s has decreased by more than 50%.
The biggest dip was seen in 2016 when the numbers went to 375,000, compared to 420,000 in 2015.
The restaurant has seen a steady reduction in its number of employees and revenue figures in the last few years.
In the U.S. specifically, they have closed more stores than opened them. On the global front, however, the numbers are going upward.
From 2020 to 2021, the restaurant saw the biggest jump in its revenues, as it increased from $19.21 billion to 23.22 billion.
69 million customers visit McDonald’s daily.
The restaurant sells 75 burgers per second, and French Fries are their best-selling item, with around 9 million pounds of fries sold every day.
Best McDonald’s Ads
Open 24 Hours
McDonald’s cleverly advertised that they are open 24*7.
The billboard showcased what McDonald’s dishes to have every hour, using the Sun. A brilliant idea.
Let the fries guide you
The fries were cut and designed in such a way, you will reach the nearest McDonald’s outlet after following the direction written on the billboard.
With the simple use of their fries, McDonald’s showcased the new feature of free wifi at their outlets. Simple, yet effective ad.
The Best Fries On The Planet
There’s a reason fries are the most sold item at McDonald’s. To showcase its popularity and taste, they used yellow lights in a unique way where it looked like a pack of fries bunched together.
McDonald’s Top Competitors 2023
Burger vs. Burger, Burger King is probably the biggest threat to McDonald’s. The restaurant serves more than 18000 locations and 100 plus countries. Their main product is a Whopper against McD’s Big Mac. However, their menu does not stop there, they also offer similar items such as French Fries, cold beverages, coffee, and desserts.
You’d often see McDonald’s vs. Wendy’s fighting it out on social media. However, that virtual fight also translates to the real world. Both of them have their unique traits when it comes to their menu. One example of that is Wendy’s square patty used in their burgers.
Wendy’s serves in more than 68000 locations globally. While McDonald’s is a much larger and recognizable (probably the most recognizable brand), Wendy’s with their relatively smaller reach still competes well against the fast food giant of McD.
Yum brand handles multiple globally renowned Quick services restaurants. Including Pizza Hut, Taco Bell, and KFC (Kentucky Fried Chicken). A 2020 report stated that there are over 50,000 restaurants under the brand 290 brand-country combinations, with over 98% of their restaurants franchised. Both brands have opted for the franchising strategy to tackle food inflation, as it reduces capital requirements and improves earnings per share growth.
Founded in 1965, Subway is known for its sandwiches paired with fresh buns of bread. It also serves salads, cookies, along with other beverages and snacks. Both McDonald’s and Subway compete fiercely to stay atop the fast food chain industry in the U.S. and globally. Currently, Subway serves more than 37,500 locations in over a hundred countries.
Did you know? McDonald’s was a major investor in Chipotle in its early days in 1998. McDonald’s sold all its shares in 2006 and divested itself.
Chipotle is a fast-casual restaurant chain that serves tacos, burritos, bowls, and salads. It operates over 2800 locations around the globe. Unlike McDonald’s, none of its restaurants are franchised. As of 2021, Chipotle’s market cap was $52.3 billion.
Current Day McDonald’s
McDonald’s has changed drastically since its inception. However, its speedy service and franchising approach remain major factors driving the brand forward globally. From slashing Menus to introducing new items, its calculated moves have successfully helped the brand preserve its stronghold in the industry. Despite so many emerging players, McDonald’s remains one of the major players to beat in the QSR industry.