1 00:00:02,042 --> 00:00:02,875 - [Narrator] Before some of the world's 2 00:00:02,875 --> 00:00:04,792 most famous fast foods were born, 3 00:00:04,792 --> 00:00:05,875 [cup rattling] 4 00:00:05,875 --> 00:00:07,292 there was an aging salesman 5 00:00:07,292 --> 00:00:08,792 at the end of his rope. 6 00:00:08,792 --> 00:00:10,625 [dramatic music] 7 00:00:10,625 --> 00:00:12,083 - He's making $35 a week 8 00:00:12,083 --> 00:00:14,167 and is a $100,000 in debt. 9 00:00:15,042 --> 00:00:17,375 - He just needs an opportunity. 10 00:00:17,375 --> 00:00:20,292 - [Narrator] But a fortuitous sales call will be the spark. 11 00:00:20,292 --> 00:00:22,958 - We need something that can do about 40 milkshakes at once. 12 00:00:22,958 --> 00:00:24,625 - Forty? 13 00:00:24,625 --> 00:00:25,833 [dramatic music] 14 00:00:25,833 --> 00:00:27,750 - [Narrator] That turns a roadside burger joint... 15 00:00:27,750 --> 00:00:30,333 - Let me help you go nationwide. 16 00:00:30,333 --> 00:00:31,667 [chuckles] 17 00:00:31,667 --> 00:00:34,667 - [Narrator] Into a 200 billion dollar American empire. 18 00:00:34,667 --> 00:00:36,042 [dramatic music] 19 00:00:36,042 --> 00:00:37,708 - This is it. 20 00:00:37,708 --> 00:00:39,250 [suspenseful music] 21 00:00:39,250 --> 00:00:41,042 - [Narrator] But to create the world's largest chain... 22 00:00:41,042 --> 00:00:43,083 - Ray Kroc wants to make McDonald's 23 00:00:43,083 --> 00:00:45,375 the biggest name in fast food. 24 00:00:45,375 --> 00:00:46,583 - [Narrator] He'll have to transform 25 00:00:46,583 --> 00:00:49,458 the fast food industry from the ground up. 26 00:00:49,458 --> 00:00:51,958 - So Ray Kroc pours everything he has 27 00:00:51,958 --> 00:00:54,375 into this new real estate acquisition model. 28 00:00:54,375 --> 00:00:59,000 He is spending half a million dollars every month. 29 00:00:59,000 --> 00:01:00,833 [suspenseful music] 30 00:01:00,833 --> 00:01:02,625 - [Narrator] Outmaneuver the competition. 31 00:01:02,625 --> 00:01:05,083 - We got to find a way to stop the bleeding. 32 00:01:05,083 --> 00:01:07,875 - To see someone actually eclipse McDonald's, 33 00:01:07,875 --> 00:01:09,792 that's a really big deal. 34 00:01:09,792 --> 00:01:11,208 - [Narrator] Learn from failure. 35 00:01:11,208 --> 00:01:12,917 - The Hula Burger... 36 00:01:12,917 --> 00:01:14,417 What's the word? Disgusting. 37 00:01:14,417 --> 00:01:15,458 Disgusting. 38 00:01:15,458 --> 00:01:16,667 - [Narrator] To create one of the most 39 00:01:16,667 --> 00:01:20,250 recognizable brands the world has ever seen. 40 00:01:20,250 --> 00:01:23,667 - The American people will never forget the name McDonald's. 41 00:01:23,667 --> 00:01:27,667 - [Narrator] And become the founding father of fast food. 42 00:01:28,667 --> 00:01:29,583 - Now we're talking. 43 00:01:30,625 --> 00:01:35,167 [sensational theatrical theme music] 44 00:01:50,958 --> 00:01:52,333 [bell chiming] [dramatic music] 45 00:01:52,333 --> 00:01:53,833 - [Narrator] In the years immediately following 46 00:01:53,833 --> 00:01:58,667 World War II, America enters a new era of highway expansion. 47 00:01:59,625 --> 00:02:00,583 - After World War II, 48 00:02:00,583 --> 00:02:02,750 you had these Interstate Highway Acts 49 00:02:02,750 --> 00:02:05,417 that create highways on a level 50 00:02:05,417 --> 00:02:08,208 completely unprecedented in American history. 51 00:02:08,208 --> 00:02:11,917 Big high-speed roads that enabled people 52 00:02:11,917 --> 00:02:14,042 to travel much farther distances. 53 00:02:14,042 --> 00:02:15,375 [bright fast-paced music] 54 00:02:15,542 --> 00:02:17,500 - [Narrator] The new highway system pushes car sales 55 00:02:17,500 --> 00:02:21,083 to 7.9 million putting more Americans on the road 56 00:02:21,083 --> 00:02:22,250 than ever before. 57 00:02:23,125 --> 00:02:24,917 - Every family wants a car, 58 00:02:24,917 --> 00:02:25,917 and they want to take vacations 59 00:02:25,917 --> 00:02:27,208 and travel around the country. 60 00:02:27,208 --> 00:02:31,542 So the world of highway, food, and lodging 61 00:02:31,542 --> 00:02:34,292 becomes incredibly important to American commerce. 62 00:02:34,292 --> 00:02:35,458 [dramatic music] 63 00:02:35,458 --> 00:02:36,875 - [Narrator] Howard Johnson emerges 64 00:02:36,875 --> 00:02:40,208 as the industry leader in roadside restaurants, 65 00:02:40,208 --> 00:02:43,542 and their success launches a franchising explosion. 66 00:02:43,542 --> 00:02:46,750 - Franchising is when the parent company gives someone else, 67 00:02:46,750 --> 00:02:49,750 the licensee, the right to operate a business 68 00:02:49,750 --> 00:02:52,417 in the parent's name, using the parent's menu, 69 00:02:52,417 --> 00:02:54,417 using the parent's business practices, 70 00:02:54,417 --> 00:02:56,042 their suppliers, et cetera. 71 00:02:56,042 --> 00:02:57,458 [dramatic music] 72 00:02:57,458 --> 00:02:58,583 - [Narrator] As Howard Johnson's 73 00:02:58,583 --> 00:03:02,125 expands to 230 nationwide locations, 74 00:03:02,125 --> 00:03:04,708 it's not long before other chains follow suit, 75 00:03:04,708 --> 00:03:08,833 including Dairy Queen, Carvel, and Dunkin' Donuts. 76 00:03:08,833 --> 00:03:10,417 [upbeat music] 77 00:03:10,417 --> 00:03:12,208 - For ordinary people who want to start a business, 78 00:03:12,208 --> 00:03:13,792 franchising is a great way for them 79 00:03:13,792 --> 00:03:15,125 to venture out on their own. 80 00:03:15,125 --> 00:03:17,042 It didn't have a lot of startup costs, 81 00:03:17,042 --> 00:03:19,083 and that's why these things started 82 00:03:19,083 --> 00:03:21,708 springing up all over the country so fast. 83 00:03:21,708 --> 00:03:24,958 - Someone who is a savvy entrepreneur could look around, 84 00:03:24,958 --> 00:03:28,083 and say, "I think I can get rich." 85 00:03:28,083 --> 00:03:29,417 [striking dramatic music] 86 00:03:29,417 --> 00:03:30,917 - [Narrator] And one traveling salesman 87 00:03:30,917 --> 00:03:34,375 is witnessing the franchising boom firsthand. 88 00:03:34,375 --> 00:03:36,917 His name is Ray Kroc. 89 00:03:39,375 --> 00:03:43,125 - Ray Kroc was born in Oak Park, Illinois. 90 00:03:43,125 --> 00:03:45,625 By his own admission, wasn't very book smart, 91 00:03:45,625 --> 00:03:47,292 but was always really driven. 92 00:03:47,292 --> 00:03:50,708 He was also extremely good at sales 93 00:03:50,708 --> 00:03:53,667 and extremely goal focused when it comes 94 00:03:53,667 --> 00:03:56,458 to creating something that he can run. 95 00:03:56,458 --> 00:04:00,083 - Ray Kroc sees what Howard Johnson's is doing. 96 00:04:00,083 --> 00:04:02,333 They're making money hand over fist. 97 00:04:02,333 --> 00:04:04,250 He wants to follow in their footsteps. 98 00:04:04,250 --> 00:04:06,083 He just needs an opportunity, 99 00:04:06,083 --> 00:04:08,083 and all of a sudden, 100 00:04:08,083 --> 00:04:10,250 he sees it right there. 101 00:04:10,250 --> 00:04:12,208 It's the Multimixer. 102 00:04:12,208 --> 00:04:13,792 [dramatic music] 103 00:04:13,792 --> 00:04:16,333 - [Narrator] Dubbed, "The milkshake maker of the future," 104 00:04:16,333 --> 00:04:19,417 the Multimixer can produce five milkshakes at once. 105 00:04:19,417 --> 00:04:20,958 [dramatic action music] 106 00:04:20,958 --> 00:04:22,875 And 52-year-old Ray Kroc 107 00:04:22,875 --> 00:04:25,750 is selling them out of the trunk of his car. 108 00:04:26,917 --> 00:04:30,542 - His job is a relentless, grueling, endless job 109 00:04:30,542 --> 00:04:33,375 where he has to drive around the country all the time 110 00:04:33,375 --> 00:04:36,500 trying to convince diner owners to buy one of these 111 00:04:36,500 --> 00:04:39,000 large, complicated, expensive devices, 112 00:04:39,000 --> 00:04:41,292 and it's not easy at all. 113 00:04:41,292 --> 00:04:43,542 - It's usually not this finicky. 114 00:04:43,542 --> 00:04:46,250 - Ray Kroc thinks he's found the ideal job. 115 00:04:46,250 --> 00:04:47,583 The only catch is, 116 00:04:47,583 --> 00:04:50,625 it requires him to purchase his own supplies. 117 00:04:50,625 --> 00:04:53,333 - It's my demo model, so it gets a lot of use. 118 00:04:53,333 --> 00:04:56,375 - And by 1954, he's making $35 a week 119 00:04:56,375 --> 00:04:58,292 and is a $100,000 a debt. 120 00:04:58,292 --> 00:05:00,458 [light dramatic music] 121 00:05:00,458 --> 00:05:03,042 - [Narrator] Going from one cold call to the next, 122 00:05:03,042 --> 00:05:05,708 Kroc is struggling to find his way. 123 00:05:05,708 --> 00:05:08,500 - Where he ended up spending the most time 124 00:05:08,500 --> 00:05:10,625 was in Southern California where roadside 125 00:05:10,625 --> 00:05:13,583 stands were popping up more than anywhere else. 126 00:05:13,583 --> 00:05:15,208 - He was already a pretty old guy. 127 00:05:15,208 --> 00:05:16,542 He wasn't exactly a spring chicken 128 00:05:16,542 --> 00:05:18,875 when he happened upon a hamburger stand. 129 00:05:18,875 --> 00:05:20,250 - Come on, we need these burgers up. 130 00:05:20,250 --> 00:05:22,083 Let's go. 131 00:05:22,083 --> 00:05:23,667 [sighs] So this thing's supposed 132 00:05:23,667 --> 00:05:25,625 to be the best machine, right? 133 00:05:25,625 --> 00:05:26,875 - Yeah. - Because I need something 134 00:05:26,875 --> 00:05:28,750 that can do about 40 milkshakes at once. 135 00:05:29,708 --> 00:05:30,417 - Forty? 136 00:05:30,417 --> 00:05:31,958 [striking dramatic music] 137 00:05:31,958 --> 00:05:33,333 - [Narrator] In 1954, 138 00:05:33,333 --> 00:05:34,958 one thriving eatery 139 00:05:34,958 --> 00:05:38,583 forges an indelible impression on Kroc. 140 00:05:38,583 --> 00:05:41,208 - Most of his clients want one or two 141 00:05:41,208 --> 00:05:43,375 milkshakes to be made at one time. 142 00:05:43,375 --> 00:05:46,292 It's a real eyeopener to Ray Kroc. 143 00:05:46,292 --> 00:05:48,042 - What he sees is 144 00:05:48,042 --> 00:05:49,208 it's like a factory floor. 145 00:05:49,208 --> 00:05:51,125 It's like food automation. 146 00:05:51,125 --> 00:05:53,042 Okay, a crazy amount of volume. 147 00:05:53,042 --> 00:05:54,208 They figured out the speed 148 00:05:54,208 --> 00:05:55,542 by which you have to make everything. 149 00:05:55,542 --> 00:05:57,750 How the meat gets to the grill, to the bun, 150 00:05:57,750 --> 00:05:59,375 everything has been thought out. 151 00:05:59,375 --> 00:06:00,875 [striking dramatic music] 152 00:06:00,875 --> 00:06:03,417 - [Narrator] The stand sells hamburgers for 15 cents, 153 00:06:03,417 --> 00:06:06,208 along with a streamlined menu of french fries, 154 00:06:06,208 --> 00:06:08,000 milkshakes, and drinks. 155 00:06:09,000 --> 00:06:10,375 - They're not encouraging people 156 00:06:10,375 --> 00:06:11,542 to sit down and stay a while. 157 00:06:11,542 --> 00:06:13,500 They're not using car hops either. 158 00:06:13,500 --> 00:06:18,417 It's truly a new type of fast food experience in America 159 00:06:18,417 --> 00:06:22,208 that has not really been exploited to its potential, 160 00:06:22,208 --> 00:06:23,958 in Ray Kroc's opinion. 161 00:06:23,958 --> 00:06:26,333 - [Narrator] Kroc is fascinated by the concept, 162 00:06:26,333 --> 00:06:27,958 and it could be the opportunity 163 00:06:27,958 --> 00:06:29,667 he's been looking for. 164 00:06:29,667 --> 00:06:31,375 - This is his dream come true. 165 00:06:31,375 --> 00:06:33,292 It's mass production. 166 00:06:33,292 --> 00:06:35,000 He realizes what it means about 167 00:06:35,000 --> 00:06:37,167 the capacity for growth in this company. 168 00:06:37,167 --> 00:06:38,708 He wants a part of it. 169 00:06:38,708 --> 00:06:41,208 - [Narrator] Out of this single burger joint, 170 00:06:41,208 --> 00:06:43,667 a colossal empire will one day rise 171 00:06:43,667 --> 00:06:47,125 encompassing over 40,000 locations around the globe 172 00:06:47,125 --> 00:06:51,583 and generate more money than the GDP of 93 countries. 173 00:06:52,958 --> 00:06:55,125 But at the time, it's only a restaurant 174 00:06:55,125 --> 00:06:57,375 controlled by two brothers, 175 00:06:57,375 --> 00:06:59,875 Dick and Mac McDonald. 176 00:06:59,875 --> 00:07:02,583 [dramatic music] 177 00:07:03,708 --> 00:07:05,833 - Fellas, I've been on the road for years, 178 00:07:05,833 --> 00:07:09,292 and I've never seen anything like this anywhere. 179 00:07:09,292 --> 00:07:12,917 - [Narrator] The brothers are making $350,000 a year, 180 00:07:12,917 --> 00:07:15,125 nearly $4 million today. 181 00:07:15,125 --> 00:07:17,917 Yet, it's not the restaurant they are franchising. 182 00:07:19,042 --> 00:07:21,583 - Anyone who wants can buy the basic idea 183 00:07:21,583 --> 00:07:24,000 of the Speedee System for 900 bucks. 184 00:07:24,000 --> 00:07:25,042 [tense music] 185 00:07:25,042 --> 00:07:25,792 - They mapped out this thing 186 00:07:25,792 --> 00:07:27,583 in the most efficient fashion. 187 00:07:27,583 --> 00:07:29,083 Get the hamburgers, the fries, 188 00:07:29,083 --> 00:07:32,042 and the milkshakes out the door as quickly as possible. 189 00:07:32,042 --> 00:07:33,208 When they perfected this, 190 00:07:33,208 --> 00:07:34,625 they called it the Speedee System. 191 00:07:34,625 --> 00:07:36,500 - Not the system. 192 00:07:37,417 --> 00:07:38,500 McDonald's. 193 00:07:38,500 --> 00:07:40,083 [tense music] 194 00:07:40,083 --> 00:07:42,750 Let me help you go nationwide. 195 00:07:42,750 --> 00:07:44,042 We'll have one in every city. 196 00:07:44,042 --> 00:07:45,250 [Mac chuckles] 197 00:07:45,250 --> 00:07:47,750 - Ray Kroc was inspired, and he said, 198 00:07:47,750 --> 00:07:50,250 "We need these all around the country, 199 00:07:50,250 --> 00:07:51,500 "and the way that I'm going to make 200 00:07:51,500 --> 00:07:54,167 "that happen is the idea of a franchise." 201 00:07:55,875 --> 00:07:59,042 - Ray Kroc has been a salesman for over three decades, 202 00:07:59,042 --> 00:08:00,833 and he brings that experience to the table 203 00:08:00,833 --> 00:08:03,083 when he pitches the McDonald brothers. 204 00:08:03,083 --> 00:08:04,208 He has an enthusiasm 205 00:08:04,208 --> 00:08:05,417 for spreading this concept 206 00:08:05,417 --> 00:08:07,625 that peaks their interest. 207 00:08:07,625 --> 00:08:10,667 - I will oversee every new restaurant personally. 208 00:08:10,667 --> 00:08:14,375 You can be as hands-on or hands-off as you want. 209 00:08:14,375 --> 00:08:16,500 [tense pensive music] 210 00:08:16,500 --> 00:08:18,958 - The McDonald's brothers are open to the idea, 211 00:08:18,958 --> 00:08:21,458 but it's not something that they want to invest 212 00:08:21,458 --> 00:08:24,000 a ton of time and energy and money into. 213 00:08:24,000 --> 00:08:25,375 So Kroc responds like, 214 00:08:25,375 --> 00:08:27,625 "How about I run franchising for you? 215 00:08:27,625 --> 00:08:28,833 "You can get a cut. 216 00:08:28,833 --> 00:08:32,292 "I can get a cut, and everyone wins." 217 00:08:32,292 --> 00:08:35,708 - [Narrator] In 1955, they strike a deal that allows Kroc 218 00:08:35,708 --> 00:08:38,917 to begin to facilitate franchising the McDonald's name 219 00:08:38,917 --> 00:08:41,625 and replicating the restaurant's concept. 220 00:08:44,292 --> 00:08:45,917 [light dramatic music] 221 00:08:45,917 --> 00:08:48,875 Kroc rapidly establishes eight new locations 222 00:08:48,875 --> 00:08:53,958 across California, Arizona, and Illinois in 1956. 223 00:08:53,958 --> 00:08:56,708 Yet, he's barely making enough to get by. 224 00:08:57,917 --> 00:09:00,708 - The contract that Ray Kroc signed 225 00:09:00,708 --> 00:09:04,125 with the McDonald brothers was not ideal, 226 00:09:04,125 --> 00:09:05,875 but he signed it anyway. 227 00:09:05,875 --> 00:09:08,875 He was really desperate to get involved no matter what. 228 00:09:08,875 --> 00:09:10,708 - Soon as these get clear, 229 00:09:10,708 --> 00:09:13,875 I want to do setups for another 12, all right? 230 00:09:13,875 --> 00:09:18,375 - They split 1.9% of the sale of each hamburger. 231 00:09:18,375 --> 00:09:19,667 [switch clicking] 232 00:09:19,667 --> 00:09:21,042 - That's a pretty small amount of sales, 233 00:09:21,042 --> 00:09:24,583 especially when you're selling a burger for 15 cents. 234 00:09:24,583 --> 00:09:26,667 Less than two cents are going to Ray Kroc, 235 00:09:26,667 --> 00:09:30,042 so he is making literally cents on the burger. 236 00:09:31,292 --> 00:09:32,625 - [Narrator] To boost sales, 237 00:09:32,625 --> 00:09:34,042 Kroc plans to introduce 238 00:09:34,042 --> 00:09:36,583 a new product to their nine item menu. 239 00:09:36,583 --> 00:09:39,417 [light dramatic music] 240 00:09:39,417 --> 00:09:41,667 - Kroc is going back and forth to the McDonald's brothers. 241 00:09:41,667 --> 00:09:43,542 He's like, "I need to make this tweak," 242 00:09:43,542 --> 00:09:45,917 but they aren't signing off on these changes, 243 00:09:45,917 --> 00:09:49,333 which is really making Kroc worried. 244 00:09:49,333 --> 00:09:51,625 - The McDonald's brothers have a really strict idea 245 00:09:51,625 --> 00:09:53,625 of their business and how they want to run it. 246 00:09:53,625 --> 00:09:57,042 So they make Ray Kroc agree that any changes 247 00:09:57,042 --> 00:09:59,708 have to be written and approved by the brothers 248 00:09:59,708 --> 00:10:01,750 before anything else can happen. 249 00:10:01,750 --> 00:10:02,750 - [Narrator] Without the approval of 250 00:10:02,750 --> 00:10:03,958 the McDonald brothers, 251 00:10:03,958 --> 00:10:05,875 Kroc introduces what he believes 252 00:10:05,875 --> 00:10:08,125 will be their new hit item: 253 00:10:08,125 --> 00:10:10,625 a 15 cent pound cake. 254 00:10:10,625 --> 00:10:12,250 [dramatic music] 255 00:10:12,250 --> 00:10:13,583 - It's the 1950s, 256 00:10:13,583 --> 00:10:14,875 and you've got Betty Crocker. 257 00:10:14,875 --> 00:10:16,208 You've got Entenmann's, 258 00:10:16,208 --> 00:10:18,833 and pound cake is really popular at the time. 259 00:10:18,833 --> 00:10:20,542 And Ray Kroc thought it would be 260 00:10:20,542 --> 00:10:23,083 the perfect product to add to McDonald's menu. 261 00:10:24,208 --> 00:10:25,625 - [Narrator] But his snack-sized pound cakes 262 00:10:25,625 --> 00:10:26,917 are barely selling, 263 00:10:26,917 --> 00:10:28,667 and Kroc's rouge maneuver 264 00:10:28,667 --> 00:10:31,542 has infuriated the McDonald brothers. 265 00:10:31,542 --> 00:10:32,750 - Ray Kroc is an innovator. 266 00:10:32,750 --> 00:10:33,708 Sometimes it worked. 267 00:10:33,708 --> 00:10:35,250 Sometimes it didn't. 268 00:10:35,250 --> 00:10:38,042 But he goes immediately against the McDonald brothers. 269 00:10:38,042 --> 00:10:40,625 Now with this first massive misstep, 270 00:10:40,625 --> 00:10:42,667 trust is pretty much broken, 271 00:10:42,667 --> 00:10:45,375 and it is really hot in McDonald's land. 272 00:10:45,375 --> 00:10:46,750 [tense foreboding music] 273 00:10:46,750 --> 00:10:48,417 - [Narrator] To check Kroc, 274 00:10:48,417 --> 00:10:51,083 the McDonald brothers exercise their contractual rights, 275 00:10:51,083 --> 00:10:54,333 forcing him to immediately stop selling the pound cake. 276 00:10:55,792 --> 00:10:57,458 [tense explosive music] 277 00:10:57,458 --> 00:11:01,000 - It's pretty fair to say that the McDonald brothers 278 00:11:01,000 --> 00:11:04,542 and Ray Kroc were not exactly a match made in heaven. 279 00:11:04,542 --> 00:11:06,542 [suspenseful music] 280 00:11:06,542 --> 00:11:10,250 So, it didn't take long before Ray 281 00:11:10,250 --> 00:11:15,333 saw the McDonald brothers as not partners, but an obstacle. 282 00:11:15,708 --> 00:11:19,042 - [Narrator] Kroc's maverick moves has opened a rift. 283 00:11:19,042 --> 00:11:22,208 - Because of profound ideological differences 284 00:11:22,208 --> 00:11:25,458 between the way Ray Kroc wants to run the business 285 00:11:25,458 --> 00:11:27,208 and the way the McDonald's brothers 286 00:11:27,208 --> 00:11:28,833 want to run the business, 287 00:11:28,833 --> 00:11:31,917 he decides that he wants to steer the ship. 288 00:11:31,917 --> 00:11:33,000 [striking dramatic music] 289 00:11:33,000 --> 00:11:34,583 - Hold on. 290 00:11:34,583 --> 00:11:35,958 - [Narrator] Control of what will one day be 291 00:11:35,958 --> 00:11:39,875 a multi-billion dollar empire hangs in balance, 292 00:11:39,875 --> 00:11:41,833 and only one side will win. 293 00:11:41,833 --> 00:11:43,042 [striking dramatic music] 294 00:11:48,542 --> 00:11:50,333 [tense music] 295 00:11:50,333 --> 00:11:51,875 [switch clicks] 296 00:11:51,875 --> 00:11:54,208 - [Narrator] Former salesman Ray Kroc has been working 297 00:11:54,208 --> 00:11:57,208 to expand the McDonald brothers business, 298 00:11:57,208 --> 00:12:01,167 but in 1959 their relationship is fraught with tension. 299 00:12:01,167 --> 00:12:04,000 [tense uneasy music] 300 00:12:04,000 --> 00:12:06,042 - It's driving Ray Kroc crazy that every decision 301 00:12:06,042 --> 00:12:08,042 has to be run by the McDonald's brothers, 302 00:12:08,042 --> 00:12:10,417 because they don't agree with him about a lot of stuff. 303 00:12:10,417 --> 00:12:11,667 They were in his way. 304 00:12:11,667 --> 00:12:15,458 [telephone ringing] 305 00:12:15,458 --> 00:12:16,833 - It is Mac. 306 00:12:16,833 --> 00:12:19,083 - Mac, hi, it's Ray. 307 00:12:19,083 --> 00:12:20,542 - It's Ray. 308 00:12:20,542 --> 00:12:21,958 Yeah, how are you? 309 00:12:21,958 --> 00:12:23,875 - [Narrator] Believing that only with complete control 310 00:12:23,875 --> 00:12:26,583 can McDonald's achieve its full potential, 311 00:12:26,583 --> 00:12:28,958 Kroc executes a daring maneuver. 312 00:12:30,333 --> 00:12:31,458 - I'd like to buy you out. 313 00:12:31,458 --> 00:12:32,583 [suspenseful music] 314 00:12:32,583 --> 00:12:34,833 - He's asking to buy us out. 315 00:12:34,833 --> 00:12:35,917 - Give me the phone. - Yeah. 316 00:12:35,917 --> 00:12:37,625 [tense dramatic music] 317 00:12:37,625 --> 00:12:39,583 - [Dick] 2.7 million cash up front. 318 00:12:39,583 --> 00:12:41,667 [tense dramatic music] 319 00:12:41,667 --> 00:12:43,208 - What? 320 00:12:43,208 --> 00:12:44,750 I can't put that kind of money together. 321 00:12:44,750 --> 00:12:46,542 - Ray wakes up and realizes, 322 00:12:46,542 --> 00:12:48,125 "Uh-oh, I'm not going to ever be able 323 00:12:48,125 --> 00:12:50,958 to deliver on what the brothers want." 324 00:12:50,958 --> 00:12:53,458 But he doesn't have the $2.7 million, 325 00:12:53,458 --> 00:12:56,625 and you can imagine this is a huge dilemma for him. 326 00:12:56,625 --> 00:12:58,167 - [Dick] We won't take a penny less. 327 00:12:58,167 --> 00:13:00,042 [tense music] 328 00:13:00,042 --> 00:13:03,375 [dramatic explosive music] 329 00:13:03,375 --> 00:13:05,875 [dramatic music] 330 00:13:05,875 --> 00:13:07,875 - [Narrator] Kroc approaches numerous banks, 331 00:13:07,875 --> 00:13:09,708 but none are willing to offer him a loan 332 00:13:09,708 --> 00:13:11,542 for the necessary funds. 333 00:13:11,542 --> 00:13:12,708 - There's a reason for that. 334 00:13:12,708 --> 00:13:14,292 Profit margins. 335 00:13:14,292 --> 00:13:16,917 Ray Kroc is getting 1.9% 336 00:13:16,917 --> 00:13:19,083 of a 15 cent hamburger. 337 00:13:19,083 --> 00:13:21,292 Banks are not excited about that. 338 00:13:21,292 --> 00:13:22,208 [dramatic music] 339 00:13:22,208 --> 00:13:23,917 - They have a hundred restaurants, 340 00:13:23,917 --> 00:13:25,958 but the thing is Ray Kroc's income 341 00:13:25,958 --> 00:13:29,375 from all that is only $20,000 a year. 342 00:13:29,375 --> 00:13:31,167 [tense dramatic music] 343 00:13:31,167 --> 00:13:33,750 - Things didn't make financial sense as they were set up, 344 00:13:33,750 --> 00:13:36,333 and something had to give. 345 00:13:36,333 --> 00:13:38,542 He had to get creative. 346 00:13:38,542 --> 00:13:40,083 - While Kroc struggles 347 00:13:40,083 --> 00:13:41,792 with the financial challenges, 348 00:13:41,792 --> 00:13:43,750 one entrepreneur sees the brand 349 00:13:43,750 --> 00:13:46,542 as an untapped gold mine. 350 00:13:46,542 --> 00:13:48,708 - So Harry Sonneborn is the 351 00:13:48,708 --> 00:13:51,875 39-year-old VP of Tastee-Freez. 352 00:13:51,875 --> 00:13:54,708 They have about 1800 stores. 353 00:13:54,708 --> 00:13:58,542 He's an expert in roadside food. 354 00:13:58,542 --> 00:14:00,167 [light pensive music] 355 00:14:00,167 --> 00:14:02,250 - [Narrator] Sonneborn recently cashed out of Tastee-Freez 356 00:14:02,250 --> 00:14:05,292 and is now looking for his next opportunity. 357 00:14:05,292 --> 00:14:08,458 - You are creating quite the buzz around here. 358 00:14:09,833 --> 00:14:11,375 - You should tell that to my partners. 359 00:14:11,375 --> 00:14:14,458 - Yeah, well, maybe you need new partners. 360 00:14:15,792 --> 00:14:18,417 - Kroc has been charging at this windmill alone. 361 00:14:18,542 --> 00:14:21,417 He now realizes that he could use a partner. 362 00:14:21,417 --> 00:14:22,833 - Let's talk in my office. 363 00:14:24,042 --> 00:14:25,250 - [Narrator] Hoping they can finally 364 00:14:25,250 --> 00:14:27,708 unlock a profitable franchise model, 365 00:14:27,708 --> 00:14:29,958 Kroc brings Sonneborn on board. 366 00:14:29,958 --> 00:14:32,333 - Harry Sonneborn thinks of the lowest possible salary 367 00:14:32,333 --> 00:14:34,375 that he can make because he's so desperate 368 00:14:34,375 --> 00:14:35,375 to work with McDonald's. 369 00:14:35,375 --> 00:14:38,042 He comes up with a hundred dollars a week. 370 00:14:38,042 --> 00:14:42,792 - His mega task is to figure out how do we get a loan 371 00:14:42,792 --> 00:14:45,083 to buy out the McDonald brothers 372 00:14:45,083 --> 00:14:48,125 and take over this chain? 373 00:14:48,125 --> 00:14:49,625 - [Narrator] Together they map out 374 00:14:49,625 --> 00:14:51,500 a unique direction forward. 375 00:14:51,500 --> 00:14:52,875 - He says, "Listen, you think 376 00:14:52,875 --> 00:14:55,042 you're in the hamburger business, right?" 377 00:14:55,042 --> 00:14:56,542 And Ray Kroc's like, "Yeah, of course, I'm in the hamburger. 378 00:14:56,542 --> 00:14:59,042 "I'm in the hamburger, fries, and milkshake business." 379 00:14:59,042 --> 00:15:00,583 This guy's, "No, no, no, no. 380 00:15:00,583 --> 00:15:02,917 "You got to be in the real estate business." 381 00:15:02,917 --> 00:15:04,500 [striking dramatic music] 382 00:15:04,500 --> 00:15:06,792 - [Narrator] Sonneborn's idea for a new franchise model 383 00:15:06,792 --> 00:15:10,875 could provide a steady stream of revenue no longer dependent 384 00:15:10,875 --> 00:15:13,417 on a percentage of hamburger sales. 385 00:15:13,417 --> 00:15:16,042 - Sonneborn comes up with this concept: 386 00:15:16,042 --> 00:15:20,042 to buy the land under which a franchise will be built, 387 00:15:20,042 --> 00:15:24,167 and then lease the land back to the franchisee forever. 388 00:15:24,167 --> 00:15:26,542 - "Each of these McDonald's franchises 389 00:15:26,542 --> 00:15:31,333 "will be leasing from us and paying us rent," 390 00:15:31,333 --> 00:15:35,208 and they'll be using the profits to purchase cheap land 391 00:15:35,208 --> 00:15:38,208 and basically attract franchisees. 392 00:15:38,208 --> 00:15:42,208 That is going to allow him to expand very quickly. 393 00:15:42,208 --> 00:15:43,458 - [Narrator] The pair establish 394 00:15:43,458 --> 00:15:45,875 the Franchise Realty Corporation, 395 00:15:45,875 --> 00:15:48,250 a separate entity outside of McDonald's, 396 00:15:48,250 --> 00:15:50,125 investing all their resources 397 00:15:50,125 --> 00:15:53,292 to acquire prime real estate for franchises. 398 00:15:53,292 --> 00:15:55,167 - What they did was effectively 399 00:15:55,167 --> 00:15:58,208 became landlords to their franchisees, 400 00:15:58,208 --> 00:16:00,792 and it was the franchisee that took on the risk 401 00:16:00,792 --> 00:16:02,542 of all operations. 402 00:16:02,542 --> 00:16:03,708 [dramatic music] 403 00:16:03,708 --> 00:16:05,417 - So Ray Kroc pours everything he is 404 00:16:05,417 --> 00:16:07,375 and everything he has into this new 405 00:16:07,375 --> 00:16:09,125 real estate acquisition model. 406 00:16:09,125 --> 00:16:15,125 In fact, he is spending half a million dollars every month 407 00:16:15,125 --> 00:16:18,375 to acquire new land that the franchises are on. 408 00:16:18,375 --> 00:16:21,292 - [Narrator] The new franchising model propels McDonald's 409 00:16:21,292 --> 00:16:24,875 to open hundreds of locations by 1961. 410 00:16:24,875 --> 00:16:29,042 - The real estate model truly made franchising 411 00:16:29,042 --> 00:16:33,917 a lucrative and viable long-term business. 412 00:16:33,917 --> 00:16:35,667 - [Narrator] More crucially for Kroc, 413 00:16:35,667 --> 00:16:37,208 he now possesses what he needs 414 00:16:37,208 --> 00:16:40,042 to seize control of McDonald's. 415 00:16:40,042 --> 00:16:43,458 [tense dramatic music] 416 00:16:45,083 --> 00:16:47,083 - How does it feel to be millionaires? 417 00:16:48,375 --> 00:16:50,375 - It definitely doesn't feel terrible, that's for sure. 418 00:16:50,375 --> 00:16:53,125 - So with this plan, everybody gets what they want. 419 00:16:53,125 --> 00:16:55,292 The McDonald brothers each get a million dollars 420 00:16:55,292 --> 00:16:56,875 and basically have a nice nest egg 421 00:16:56,875 --> 00:16:58,208 for the rest of their lives. 422 00:16:58,208 --> 00:17:01,250 Meanwhile, Ray Kroc gets to start his journey. 423 00:17:01,250 --> 00:17:02,292 He's not a young man. 424 00:17:02,292 --> 00:17:03,708 He's middle-aged at this point, 425 00:17:03,708 --> 00:17:05,042 but he's just beginning. [striking dramatic music] 426 00:17:05,042 --> 00:17:06,750 - [Narrator] In 1961, 427 00:17:06,750 --> 00:17:08,167 Kroc purchases the name 428 00:17:08,167 --> 00:17:12,875 and exclusive rights to McDonald's paying $2.7 million, 429 00:17:12,875 --> 00:17:16,750 for a company whose value will one day exceed 200 billion. 430 00:17:18,375 --> 00:17:21,208 - One has to say that the deal 431 00:17:21,208 --> 00:17:24,208 that the McDonald brothers took to part ways 432 00:17:24,208 --> 00:17:26,708 pretty much could be argued as one of the worst 433 00:17:26,708 --> 00:17:28,167 business deals in history. 434 00:17:28,167 --> 00:17:30,083 They took a cash buyout, 435 00:17:30,083 --> 00:17:33,417 but Kroc walks away with the name on the books 436 00:17:33,417 --> 00:17:37,042 and gets to say that he is the founder. 437 00:17:37,042 --> 00:17:39,042 [dramatic music] 438 00:17:39,042 --> 00:17:40,292 - I promise you one thing. 439 00:17:41,542 --> 00:17:43,542 The American people will not forget your name. 440 00:17:48,042 --> 00:17:50,417 [suspenseful music] 441 00:17:50,417 --> 00:17:53,208 - Unfettered by the McDonald brothers, 442 00:17:53,208 --> 00:17:55,625 Ray Kroc is going to basically take this 443 00:17:55,625 --> 00:17:59,375 opportunity to expand McDonald's across America. 444 00:17:59,375 --> 00:18:02,167 This is what he wants: to set up fast food empire. 445 00:18:03,500 --> 00:18:05,542 - [Narrator] With a profitable franchise model, 446 00:18:05,542 --> 00:18:07,167 Kroc expands at a 447 00:18:07,167 --> 00:18:08,333 breakneck pace, 448 00:18:08,333 --> 00:18:10,375 and McDonald's balloons to over 449 00:18:10,375 --> 00:18:15,458 500 locations between 1961 and 1963. 450 00:18:16,542 --> 00:18:18,333 - Frankly, the growth McDonald's had 451 00:18:18,333 --> 00:18:20,042 is kind of unheard of. 452 00:18:20,042 --> 00:18:22,542 They grew 5,400%, 453 00:18:22,542 --> 00:18:26,083 and that really inspired other entrepreneurs 454 00:18:26,083 --> 00:18:27,792 to try something on their own. 455 00:18:27,792 --> 00:18:29,042 [thrilling suspenseful music] 456 00:18:29,042 --> 00:18:30,250 - [Narrator] McDonald's real estate revenue 457 00:18:30,250 --> 00:18:32,667 soon surpasses its food sales, 458 00:18:32,667 --> 00:18:36,875 and Kroc's blueprint ignites a franchise gold rush. 459 00:18:36,875 --> 00:18:38,875 - As other people see his success, 460 00:18:38,875 --> 00:18:40,083 everyone wants to get in on this. 461 00:18:40,083 --> 00:18:41,458 [exciting suspenseful music] 462 00:18:41,458 --> 00:18:42,958 - [Narrator] He's opened the floodgates 463 00:18:42,958 --> 00:18:45,333 to a new wave of competition 464 00:18:45,333 --> 00:18:47,542 that will force Kroc to innovate 465 00:18:47,542 --> 00:18:50,333 or be crushed by his own creation. 466 00:18:55,625 --> 00:18:56,333 [dramatic music] 467 00:18:56,875 --> 00:19:00,792 By 1963, Ray Kroc's revolutionary franchising model 468 00:19:00,792 --> 00:19:05,042 has generated 500 McDonald's restaurants across the country. 469 00:19:05,042 --> 00:19:06,125 [tense music] 470 00:19:06,125 --> 00:19:08,000 - Franchises become a major part 471 00:19:08,000 --> 00:19:10,042 of the American business landscape, 472 00:19:10,042 --> 00:19:12,708 and really they're a way for diversifying 473 00:19:12,708 --> 00:19:16,500 American populace to become entrepreneurs 474 00:19:16,500 --> 00:19:20,125 without just having to start something from nothing. 475 00:19:20,125 --> 00:19:21,875 - [Narrator] Among a slew of copycats, 476 00:19:21,875 --> 00:19:23,750 one Florida brand, in particular, 477 00:19:23,750 --> 00:19:27,375 emerges as a clear competitor to McDonald's. 478 00:19:27,375 --> 00:19:28,625 [explosive dramatic music] 479 00:19:28,625 --> 00:19:30,458 - Burger King was founded in Miami. 480 00:19:30,458 --> 00:19:32,250 And the brand is defined, in essence, 481 00:19:32,250 --> 00:19:34,167 by the flame-broiled burgers. 482 00:19:34,167 --> 00:19:34,958 [exciting dramatic music] 483 00:19:34,958 --> 00:19:36,000 It tastes different. 484 00:19:36,000 --> 00:19:37,375 McDonald's burgers are fried. 485 00:19:37,375 --> 00:19:38,875 They're put on a skillet, 486 00:19:38,875 --> 00:19:40,208 and they don't taste like 487 00:19:40,208 --> 00:19:42,750 something that has flame behind it. 488 00:19:42,750 --> 00:19:45,208 - [Narrator] And now with a massive ad campaign, 489 00:19:45,208 --> 00:19:47,667 they launch something McDonald's is missing: 490 00:19:47,667 --> 00:19:49,042 a signature sandwich. 491 00:19:49,042 --> 00:19:50,292 - [Announcer On TV] Well, Burger King is out 492 00:19:50,292 --> 00:19:52,292 to save the hamburger. 493 00:19:53,042 --> 00:19:54,917 Home of the Whopper. 494 00:19:54,917 --> 00:19:56,583 [tense suspenseful music] 495 00:19:56,583 --> 00:19:57,833 - [Narrator] The Burger King Whopper 496 00:19:57,833 --> 00:20:00,375 is a quarter pound of flame-broiled beef 497 00:20:00,375 --> 00:20:02,833 with all the trimmings of a backyard hamburger. 498 00:20:04,042 --> 00:20:06,500 - The thing is like five times the size. 499 00:20:06,500 --> 00:20:08,458 It's not the McDonald's burger. 500 00:20:08,458 --> 00:20:13,458 It's a quarter pound of beef on this bun and flame-broiled. 501 00:20:13,458 --> 00:20:19,708 So it has a taste very much akin to the backyard barbecue. 502 00:20:19,708 --> 00:20:21,208 People love the size. 503 00:20:21,208 --> 00:20:22,542 They love the flavor. 504 00:20:22,542 --> 00:20:26,750 I remember thinking like it was juicy 505 00:20:26,750 --> 00:20:28,708 in a way a McDonald's burger wasn't. 506 00:20:28,708 --> 00:20:32,208 McDonald's burgers were kind of this thin beef cookie. 507 00:20:32,208 --> 00:20:34,042 [tense dramatic music] 508 00:20:34,042 --> 00:20:36,833 - The Whopper as a signature sandwich 509 00:20:36,833 --> 00:20:40,500 captivates consumers in a way that nobody else had. 510 00:20:40,500 --> 00:20:42,542 Because you can get a hamburger anywhere, right? 511 00:20:42,542 --> 00:20:44,417 But you could only get a Whopper at Burger King. 512 00:20:44,417 --> 00:20:46,875 [tense dramatic music] 513 00:20:46,875 --> 00:20:49,167 - [Narrator] The Whopper boosts Burger King sales 514 00:20:49,167 --> 00:20:51,333 by an incredible 40%, 515 00:20:51,333 --> 00:20:54,375 and they soon have nearly 50 locations. 516 00:20:54,375 --> 00:20:57,042 - McDonald's really has to compete hard 517 00:20:57,042 --> 00:20:58,417 to stay ahead of the competition. 518 00:20:58,417 --> 00:20:59,875 They're not like inherently special. 519 00:20:59,875 --> 00:21:02,083 Other people can come out with cheap burgers. 520 00:21:02,083 --> 00:21:03,417 They can't get complacent. 521 00:21:03,417 --> 00:21:07,250 [tense suspenseful music] 522 00:21:07,250 --> 00:21:09,042 - [Narrator] Desperate to strike back, 523 00:21:09,042 --> 00:21:11,500 Kroc and top executive Fred Turner 524 00:21:11,500 --> 00:21:15,250 look to his franchisees for an inspirational new product 525 00:21:15,250 --> 00:21:16,792 that can challenge the Whopper. 526 00:21:16,792 --> 00:21:18,667 - Here's what I've been tinkering with. 527 00:21:18,667 --> 00:21:20,542 - [Narrator] Visiting an Ohio franchise, 528 00:21:20,542 --> 00:21:22,792 Kroc wonders if the secret weapon 529 00:21:22,792 --> 00:21:24,667 isn't a burger at all. 530 00:21:24,667 --> 00:21:27,292 - Lou Groen was a longtime McDonald's franchisee 531 00:21:27,292 --> 00:21:29,167 in the Cincinnati area. 532 00:21:29,167 --> 00:21:30,708 Every Lent he was seeing 533 00:21:30,708 --> 00:21:32,875 his McDonald's sales drop on Fridays, 534 00:21:32,875 --> 00:21:36,417 because Catholics could not get burgers. 535 00:21:36,417 --> 00:21:38,667 - And so, he pitches this to Ray Kroc. 536 00:21:38,667 --> 00:21:40,333 He's like, "Listen, I've got this idea," 537 00:21:40,333 --> 00:21:42,583 and so he comes up with a sandwich. 538 00:21:42,583 --> 00:21:45,292 - Filet of cod, breaded and fried, 539 00:21:45,292 --> 00:21:47,042 with the dollop of homemade tartar sauce. 540 00:21:47,042 --> 00:21:50,417 [suspenseful music] 541 00:21:50,417 --> 00:21:51,708 - [Narrator] It's a sandwich that will 542 00:21:51,708 --> 00:21:54,417 one day sell more than 300 million each year. 543 00:21:55,917 --> 00:21:58,875 Yet, even with its potential to become a signature item, 544 00:21:58,875 --> 00:22:00,292 Kroc is skeptical. 545 00:22:00,292 --> 00:22:01,333 [suspenseful music] 546 00:22:01,333 --> 00:22:03,375 - And Kroc says, "No." 547 00:22:03,375 --> 00:22:05,958 [tense music] 548 00:22:06,958 --> 00:22:08,042 - [Ray] That's not it. 549 00:22:08,042 --> 00:22:09,375 [dramatic music] 550 00:22:09,375 --> 00:22:10,958 - Can you imagine? 551 00:22:10,958 --> 00:22:12,375 One of the greatest sandwiches 552 00:22:12,375 --> 00:22:13,708 at a fast food chain, 553 00:22:13,708 --> 00:22:16,000 and he's like, "Not gonna work." 554 00:22:16,000 --> 00:22:18,250 - Ray Kroc hates the idea, 555 00:22:18,250 --> 00:22:21,042 because he doesn't want his restaurants to smell like fish, 556 00:22:21,042 --> 00:22:22,625 which is a valid concern. 557 00:22:22,625 --> 00:22:24,375 - [Narrator] Believing a fish sandwich 558 00:22:24,375 --> 00:22:26,375 won't be enough to stop Burger King, 559 00:22:26,375 --> 00:22:28,958 Kroc comes up with an interesting alternative. 560 00:22:32,750 --> 00:22:35,958 - This my friends is a game changer. 561 00:22:35,958 --> 00:22:37,333 [tense uneasy music] 562 00:22:37,333 --> 00:22:40,000 A revolutionary product like no other. 563 00:22:40,000 --> 00:22:42,292 - Ray Kroc had actually already had an idea 564 00:22:42,292 --> 00:22:44,333 for a beef-less, meatless burger: 565 00:22:44,333 --> 00:22:46,167 sliced pineapple cooked up 566 00:22:46,167 --> 00:22:47,833 with some other sandwich ingredients 567 00:22:47,833 --> 00:22:49,292 on a hamburger bun. 568 00:22:49,292 --> 00:22:51,542 - It seems like a desperation move, 569 00:22:51,542 --> 00:22:52,667 but there weren't that many things 570 00:22:52,667 --> 00:22:54,625 that you could put on a bun that weren't meat. 571 00:22:54,625 --> 00:22:57,458 So it was a fish versus a fruit. 572 00:22:59,375 --> 00:23:00,667 - [Narrator] Kroc believes the burger 573 00:23:00,667 --> 00:23:02,583 will be the perfect way to capitalize 574 00:23:02,583 --> 00:23:06,125 on a trend sweeping the nation: Tiki culture. 575 00:23:06,125 --> 00:23:07,292 [light upbeat music] 576 00:23:07,292 --> 00:23:08,250 - So after World War II, 577 00:23:08,250 --> 00:23:09,958 a lot of American soldiers 578 00:23:09,958 --> 00:23:13,500 stationed in Asia and Japan come back home, 579 00:23:13,500 --> 00:23:16,000 and the Polynesian Asian inspired flavors 580 00:23:16,000 --> 00:23:17,250 are really top-of-mind. 581 00:23:17,250 --> 00:23:19,792 And they're bringing that appetite back home, 582 00:23:19,792 --> 00:23:23,583 which allows the pineapple infusion into American cuisine. 583 00:23:23,583 --> 00:23:24,750 [light upbeat music] 584 00:23:24,750 --> 00:23:26,875 - And so that whole tropical aesthetic 585 00:23:26,875 --> 00:23:31,042 really filters into the American popular culture. 586 00:23:31,042 --> 00:23:34,417 You've got the show "South Pacific", "Gilligan's Island", 587 00:23:34,417 --> 00:23:37,542 and consumer culture reflects that as well. 588 00:23:37,542 --> 00:23:38,583 - [Narrator] Now Kroc wants to bring 589 00:23:38,583 --> 00:23:40,792 the same flavors to McDonald's. 590 00:23:41,917 --> 00:23:44,458 - The intersection of burger culture 591 00:23:44,458 --> 00:23:47,042 and Tiki culture doesn't make sense. 592 00:23:47,042 --> 00:23:48,000 But kind of makes sense. 593 00:23:48,000 --> 00:23:51,625 [striking dramatic music] 594 00:23:55,833 --> 00:23:56,917 - This is going to be the greatest thing 595 00:23:56,917 --> 00:23:58,875 McDonald's ever sold. 596 00:23:58,875 --> 00:24:00,708 - [Narrator] Dubbed the Hula Burger, 597 00:24:00,708 --> 00:24:03,417 Kroc is hoping its unexpected ingredients 598 00:24:03,417 --> 00:24:05,208 will make it a surefire hit. 599 00:24:05,208 --> 00:24:08,708 - The Hula Burger was a piece of grilled pineapple 600 00:24:08,708 --> 00:24:13,250 with cheese on a cold bun, which is, um... 601 00:24:13,250 --> 00:24:14,417 What's the word? Disgusting. 602 00:24:14,417 --> 00:24:15,250 Disgusting. 603 00:24:15,250 --> 00:24:19,583 [tense suspenseful music] 604 00:24:19,583 --> 00:24:21,583 - [Narrator] Kroc has passed on the Filet-O-Fish 605 00:24:21,583 --> 00:24:23,750 for the unorthodox sandwich, 606 00:24:23,750 --> 00:24:26,167 and it's about to go down in history 607 00:24:26,167 --> 00:24:27,958 as McDonald's biggest failure. 608 00:24:33,583 --> 00:24:36,750 - [Narrator] In 1963, McDonald's releases its answer 609 00:24:36,750 --> 00:24:40,208 to the Burger King Whopper: the Hula Burger. 610 00:24:40,208 --> 00:24:41,708 [dramatic music] 611 00:24:41,708 --> 00:24:44,208 - The Hula Burger sold six 612 00:24:44,208 --> 00:24:47,833 period on its first day, six. 613 00:24:47,833 --> 00:24:51,250 - The Hula Burger just failed miserably. 614 00:24:51,250 --> 00:24:53,208 [explosive dramatic music] 615 00:24:53,208 --> 00:24:55,000 [fast-paced midtempo music] 616 00:24:55,000 --> 00:24:57,917 - [Narrator] The disastrous Hula Burger forces Ray Kroc 617 00:24:57,917 --> 00:25:01,042 to cede yet, more ground to Burger King. 618 00:25:01,042 --> 00:25:03,667 Growing at a pace twice as fast as McDonald's, 619 00:25:03,667 --> 00:25:08,292 in 1964 Burger King's number of stores nearly doubles. 620 00:25:08,292 --> 00:25:11,958 - Ray Kroc viewed Burger King as the ultimate challenge, 621 00:25:11,958 --> 00:25:13,958 because they were coming up from under him 622 00:25:13,958 --> 00:25:16,458 and trying to steal everything that he had built. 623 00:25:18,250 --> 00:25:19,542 - [Narrator] Ray Kroc is now 624 00:25:19,542 --> 00:25:21,792 forced back to the drawing board. 625 00:25:21,792 --> 00:25:25,000 [tense pensive music] 626 00:25:26,250 --> 00:25:29,542 - Ray Kroc's prior experience sort of molds him. 627 00:25:29,542 --> 00:25:32,458 He experienced a lot of failure in his life, 628 00:25:32,458 --> 00:25:34,167 but he was definitely not afraid to say, 629 00:25:34,167 --> 00:25:35,583 "Okay, we made a mistake." 630 00:25:36,542 --> 00:25:37,708 - [Narrator] Turning his failures 631 00:25:37,708 --> 00:25:39,833 into a stepping stone for innovation, 632 00:25:39,833 --> 00:25:43,167 Kroc reexamines the Filet-O-Fish. 633 00:25:43,167 --> 00:25:45,625 [tense pensive music] 634 00:25:45,625 --> 00:25:47,250 - Cheese on fish? 635 00:25:51,000 --> 00:25:54,083 [suspenseful music] 636 00:25:54,083 --> 00:25:55,042 - Now we're talking. 637 00:25:56,375 --> 00:26:00,542 - [Narrator] In 1965, Kroc unveils the Filet-O-Fish. 638 00:26:00,542 --> 00:26:02,167 Selling for 29 cents, 639 00:26:02,167 --> 00:26:05,708 it becomes the first non-burger sandwich on their menu. 640 00:26:05,708 --> 00:26:07,708 [suspenseful music] 641 00:26:07,708 --> 00:26:09,708 - Filet-O-Fish was so successful, 642 00:26:09,708 --> 00:26:12,125 that it got added to the menu permanently. 643 00:26:12,125 --> 00:26:14,250 When your menu is all about simplicity, 644 00:26:14,250 --> 00:26:18,042 that is something that requires a lot of demand. 645 00:26:18,042 --> 00:26:19,750 - [Narrator] The Filet-O-Fish facilitates 646 00:26:19,750 --> 00:26:22,917 a 30% spike in overall sales. 647 00:26:23,458 --> 00:26:27,417 Yet, despite reaching over 600 locations in 44 states, 648 00:26:27,417 --> 00:26:30,042 McDonald's is forced to contend 649 00:26:30,042 --> 00:26:32,500 with an increasing number of competitors. 650 00:26:32,500 --> 00:26:34,042 - We have Burger King. 651 00:26:34,042 --> 00:26:35,125 We have Big Boy. 652 00:26:35,125 --> 00:26:37,208 We have all of these other burger chains 653 00:26:37,208 --> 00:26:40,208 kind of encroaching on McDonald's territory, 654 00:26:40,208 --> 00:26:43,708 and these other chains had bigger burgers than McDonald's. 655 00:26:47,875 --> 00:26:49,583 - Careful here all right? 656 00:26:49,583 --> 00:26:50,333 - Yes, sir. - I don't want you to 657 00:26:50,333 --> 00:26:51,917 burn these ones. 658 00:26:51,917 --> 00:26:56,083 - Ray Kroc decides to pour tons of money, tons of time, 659 00:26:56,083 --> 00:27:00,708 and tons of research into creating a bigger, meatier, 660 00:27:00,708 --> 00:27:03,917 more badass burger than they've ever created before 661 00:27:03,917 --> 00:27:06,000 to take the Whopper down. 662 00:27:06,000 --> 00:27:08,208 - [Narrator] Under pressure to outdo rivals 663 00:27:08,208 --> 00:27:09,875 with a heftier burger, 664 00:27:09,875 --> 00:27:13,000 Kroc quickly engineers a creative strategy. 665 00:27:14,375 --> 00:27:16,083 - We're going to need some onions. 666 00:27:16,083 --> 00:27:19,542 - He wanted a really great burger in very quick time. 667 00:27:19,542 --> 00:27:20,875 So he comes up with the ingredients 668 00:27:20,875 --> 00:27:22,875 that already exist in the restaurants, 669 00:27:22,875 --> 00:27:24,500 so it can scale easily without 670 00:27:24,500 --> 00:27:26,125 disrupting operations too much. 671 00:27:27,875 --> 00:27:29,667 - [Narrator] Finally, creating a signature sandwich 672 00:27:29,667 --> 00:27:32,208 of their own in 1967, 673 00:27:32,208 --> 00:27:36,333 Kroc wants to make sure consumers remember its name. 674 00:27:36,333 --> 00:27:39,833 - Ray Kroc starts spending advertising dollars, 675 00:27:39,833 --> 00:27:42,000 which would've never been spent on fast food. 676 00:27:42,000 --> 00:27:44,042 He's spending like $3 million a year, 677 00:27:44,042 --> 00:27:46,708 which was 10 times their advertising budget 678 00:27:46,708 --> 00:27:48,500 previous to this, right? 679 00:27:48,500 --> 00:27:49,708 - "Two all beef patties." 680 00:27:49,708 --> 00:27:51,167 - "Special sauce, lettuce, cheese." 681 00:27:51,167 --> 00:27:53,167 - "Pickles, onions." ♪ On a sesame seed bun ♪ 682 00:27:53,167 --> 00:27:56,542 - We know that because of that massive ad blitz. 683 00:27:56,542 --> 00:27:58,208 [dramatic music] 684 00:27:58,208 --> 00:28:01,292 - [Narrator] The Big Mac almost instantly becomes iconic 685 00:28:01,292 --> 00:28:03,042 as the sandwich quickly accounts 686 00:28:03,042 --> 00:28:06,125 for 19% of the company's sales. 687 00:28:07,125 --> 00:28:09,625 - Whereas, the Whopper has one patty, 688 00:28:09,625 --> 00:28:11,458 the Big Mac has two. 689 00:28:11,458 --> 00:28:13,667 And this notion of special sauce 690 00:28:13,667 --> 00:28:16,125 is also brought forth onto the world. 691 00:28:16,125 --> 00:28:18,000 - It is very American in this way, 692 00:28:18,000 --> 00:28:19,833 always the pursuit of something that's 693 00:28:19,833 --> 00:28:22,208 bigger and bolder, brasher, enormous. 694 00:28:22,208 --> 00:28:24,583 The Big Mac is, you know, it's a tower, 695 00:28:24,583 --> 00:28:26,292 and you need two hands to eat it. 696 00:28:26,292 --> 00:28:28,917 And you can't do anything with the rest of your day. 697 00:28:30,208 --> 00:28:32,875 - [Narrator] The Big Mac soon dethrones the Whopper, 698 00:28:32,875 --> 00:28:35,083 and McDonald's reclaims its place 699 00:28:35,083 --> 00:28:37,625 as the top fast food brand. 700 00:28:37,625 --> 00:28:39,667 Riding the momentum of success, 701 00:28:39,667 --> 00:28:42,667 McDonald's makes its debut on the stock market. 702 00:28:42,667 --> 00:28:44,292 [dramatic music] [people muttering] 703 00:28:44,292 --> 00:28:45,167 - When they go public, 704 00:28:45,167 --> 00:28:47,708 the shares are first sold for 22.50. 705 00:28:47,708 --> 00:28:50,458 They go up to 30 by the end of the day, 706 00:28:50,458 --> 00:28:52,875 and 50 by the end of the month. 707 00:28:52,875 --> 00:28:56,375 So Ray Kroc goes in a very short time 708 00:28:56,375 --> 00:29:00,750 from struggling burger business owner to multimillionaire. 709 00:29:02,125 --> 00:29:05,417 - But he's always looking for bigger and bigger and bigger 710 00:29:05,417 --> 00:29:06,875 and more and more and more, 711 00:29:06,875 --> 00:29:10,250 and is not willing to stop at expanding across the U.S. 712 00:29:10,250 --> 00:29:11,542 He wants to go global. 713 00:29:11,542 --> 00:29:12,708 [dramatic music] 714 00:29:12,708 --> 00:29:14,042 - [Narrator] Believing McDonald's 715 00:29:14,042 --> 00:29:16,042 could be more than an American fascination, 716 00:29:16,042 --> 00:29:19,833 Kroc begins to grow the brand outside the U.S., 717 00:29:19,833 --> 00:29:21,917 opening stores in British Columbia 718 00:29:21,917 --> 00:29:25,583 and Puerto Rico in 1967. 719 00:29:25,583 --> 00:29:26,917 [tense dramatic music] 720 00:29:26,917 --> 00:29:29,042 However, it quickly becomes clear 721 00:29:29,042 --> 00:29:31,042 that foreign infrastructure 722 00:29:31,042 --> 00:29:33,875 is ill-equipped to handle McDonald's needs. 723 00:29:33,875 --> 00:29:35,542 [dramatic music] 724 00:29:35,542 --> 00:29:37,875 - Ray Kroc finds the food processing 725 00:29:37,875 --> 00:29:40,875 facilities outside of this country, 726 00:29:40,875 --> 00:29:43,042 they're not accustomed to the high volume, 727 00:29:43,042 --> 00:29:46,958 the automated production, or the raw materials. 728 00:29:46,958 --> 00:29:48,958 - [Narrator] In the U.S., McDonald's is buying 729 00:29:48,958 --> 00:29:52,708 over six million pounds of Russet potatoes a year, 730 00:29:52,708 --> 00:29:55,417 but the variety is only grown in America. 731 00:29:56,750 --> 00:29:58,208 If Kroc is going to expand 732 00:29:58,208 --> 00:30:00,458 into a worldwide restaurant chain, 733 00:30:00,458 --> 00:30:02,375 he'll need to rethink one of McDonald's 734 00:30:02,375 --> 00:30:06,083 most beloved menu items: french fries. 735 00:30:06,083 --> 00:30:08,792 [pensive dramatic music] 736 00:30:08,792 --> 00:30:10,208 - Anything? 737 00:30:10,208 --> 00:30:13,583 - So they start to explore with freezing technology. 738 00:30:13,583 --> 00:30:15,000 - [Narrator] Since its inception, 739 00:30:15,000 --> 00:30:17,208 McDonald's has used fresh potatoes, 740 00:30:17,208 --> 00:30:19,333 because at the time frozen fries 741 00:30:19,333 --> 00:30:22,833 are nowhere near the same quality as fresh. 742 00:30:22,833 --> 00:30:24,458 - They're just not very good. 743 00:30:24,458 --> 00:30:26,208 They burn, they're inconsistent, 744 00:30:26,208 --> 00:30:27,875 and they don't have that crispy, fresh 745 00:30:27,875 --> 00:30:30,542 french fry flavor and snap to them. 746 00:30:30,542 --> 00:30:31,375 They're bad. 747 00:30:32,417 --> 00:30:33,708 - [Narrator] For McDonald's to convert 748 00:30:33,708 --> 00:30:36,208 to frozen french fries, Kroc insists, 749 00:30:36,208 --> 00:30:38,875 they taste as good as fresh ones. 750 00:30:41,000 --> 00:30:44,042 - They discover that the water retained in the potato 751 00:30:44,042 --> 00:30:46,792 before freezing forms ice crystals. 752 00:30:46,792 --> 00:30:48,083 When it's cooked, 753 00:30:48,083 --> 00:30:50,958 these crystals rupture the starches, 754 00:30:50,958 --> 00:30:53,958 compromising the potatoes' structure and flavor. 755 00:30:53,958 --> 00:30:56,667 - McDonald's realizes if we're going to freeze our fries, 756 00:30:56,667 --> 00:31:00,208 we need to find a way to remove the moisture from the fries 757 00:31:00,208 --> 00:31:01,375 or else you're just going to end up with 758 00:31:01,375 --> 00:31:03,083 kind of a soggy mess. 759 00:31:03,083 --> 00:31:05,792 - To do this, they use steam blanching 760 00:31:05,792 --> 00:31:08,750 and hot air to dry them before freezing. 761 00:31:08,750 --> 00:31:09,958 - They're not there yet. 762 00:31:11,333 --> 00:31:12,083 Keep at it. 763 00:31:13,125 --> 00:31:15,042 [dramatic fast-paced music] 764 00:31:15,042 --> 00:31:18,625 - Over time they refine their technique even further 765 00:31:18,625 --> 00:31:21,917 by shortening the amount of time that they're cooking it 766 00:31:21,917 --> 00:31:23,792 before they freeze it. 767 00:31:23,792 --> 00:31:26,208 So that way when it gets to the store, 768 00:31:26,208 --> 00:31:30,208 they're cooking it as close to fresh as they can. 769 00:31:30,208 --> 00:31:31,625 [tense music] 770 00:31:31,625 --> 00:31:32,333 - This is it. 771 00:31:33,375 --> 00:31:34,875 [dramatic music] 772 00:31:34,875 --> 00:31:36,375 - [Narrator] With international expansion on hold, 773 00:31:36,375 --> 00:31:39,417 McDonald's finally develops a frozen fry 774 00:31:39,417 --> 00:31:41,875 that's indistinguishable from a fresh one. 775 00:31:42,750 --> 00:31:45,833 Kroc gamble's $3.5 million, 776 00:31:45,833 --> 00:31:48,708 and puts his new frozen fries into production, 777 00:31:48,708 --> 00:31:52,042 churning out 25,000 pounds an hour. 778 00:31:52,042 --> 00:31:54,833 - That is the biggest innovation that Ray Kroc bought 779 00:31:54,833 --> 00:31:57,542 was this frozen french fry technology 780 00:31:57,542 --> 00:32:00,500 that every other fast food chain also adopted. 781 00:32:00,500 --> 00:32:01,500 [bright upbeat music] 782 00:32:01,667 --> 00:32:04,250 - He's a guy that's just taken these big swings. 783 00:32:04,250 --> 00:32:07,375 He will continually do this over and over in his career. 784 00:32:07,375 --> 00:32:08,542 He does have misses, 785 00:32:08,542 --> 00:32:11,583 but when he hits, he's hitting home runs. 786 00:32:11,583 --> 00:32:13,708 And for anyone who's ever had a McDonald's french fry, 787 00:32:13,708 --> 00:32:15,875 you can attest they are a home run. 788 00:32:17,125 --> 00:32:19,250 - [Narrator] By 1968, they have more 789 00:32:19,250 --> 00:32:22,875 than 1,000 locations around the globe. 790 00:32:22,875 --> 00:32:25,083 But just as Kroc reaches new heights, 791 00:32:25,083 --> 00:32:27,542 a new foe bursts on the scene. 792 00:32:27,542 --> 00:32:28,833 [tense music] 793 00:32:28,833 --> 00:32:30,833 - A very innovated entrepreneur, 794 00:32:30,833 --> 00:32:34,875 Harland Sanders is coming onto the horizon, 795 00:32:34,875 --> 00:32:38,667 but his centerpiece is chicken not hamburgers. 796 00:32:40,375 --> 00:32:43,208 - [Narrator] And soon Colonel Sanders' chicken restaurants 797 00:32:43,208 --> 00:32:46,458 will be the fastest growing chain in the country 798 00:32:46,458 --> 00:32:48,333 overtaking McDonald's. 799 00:32:55,042 --> 00:32:57,375 - [Narrator] Kentucky Fried Chicken has been growing 800 00:32:57,375 --> 00:32:59,333 exponentially since the mid 60s. 801 00:32:59,333 --> 00:33:02,292 By 1970, they achieved the unthinkable 802 00:33:02,292 --> 00:33:05,292 and surpass McDonald's in sales volume, 803 00:33:07,042 --> 00:33:10,292 and Ray Kroc is feeling the heat. 804 00:33:10,292 --> 00:33:12,333 - These are last month's sales figures. 805 00:33:13,625 --> 00:33:17,583 - McDonald's is just this gargantuan machine of success. 806 00:33:17,583 --> 00:33:20,917 So to see anyone come even close to that, 807 00:33:20,917 --> 00:33:22,750 to nip at that, is wild. 808 00:33:22,750 --> 00:33:24,542 To see someone actually eclipse it, 809 00:33:24,542 --> 00:33:26,250 that's a really big deal. 810 00:33:26,250 --> 00:33:28,208 - [Narrator] But it's not just KFC 811 00:33:28,208 --> 00:33:30,667 pushing Americans toward chicken... 812 00:33:30,667 --> 00:33:34,292 - In 1977, new federal dietary guidelines 813 00:33:34,292 --> 00:33:37,250 link beef to increased incidents of heart disease. 814 00:33:37,250 --> 00:33:40,375 So Americans are turning away from beef, 815 00:33:40,375 --> 00:33:43,458 and you see chickens start to get more popular. 816 00:33:43,458 --> 00:33:46,250 - We got to find a way to stop the bleeding. 817 00:33:46,250 --> 00:33:49,208 - [Narrator] Facing his most formidable competitor yet, 818 00:33:49,208 --> 00:33:52,458 Ray Kroc is desperate to restore McDonald's spot 819 00:33:52,458 --> 00:33:55,042 at the top of the fast food pyramid. 820 00:33:55,042 --> 00:33:56,625 - And this is one thing that I think 821 00:33:56,625 --> 00:33:58,917 McDonald's has done very well over its history. 822 00:33:58,917 --> 00:34:00,167 It's not been static. 823 00:34:00,167 --> 00:34:01,542 They're not saying, "Okay, 824 00:34:01,542 --> 00:34:03,208 "the thing that worked for the past five years, 825 00:34:03,208 --> 00:34:04,917 we're gonna keep doing that no matter what, 826 00:34:04,917 --> 00:34:06,375 even if evidence tells us 827 00:34:06,375 --> 00:34:08,250 that stuff is changing around us." 828 00:34:08,250 --> 00:34:09,375 - [Narrator] But chicken is 829 00:34:09,375 --> 00:34:12,042 uncharted territory at McDonald's. 830 00:34:12,042 --> 00:34:13,417 - [Ray] Follow me. 831 00:34:13,417 --> 00:34:15,167 - [Narrator] So to come up with his own chicken item, 832 00:34:15,167 --> 00:34:17,542 Kroc turns to Rene Arend, 833 00:34:17,542 --> 00:34:20,542 a classically trained chef from Luxembourg. 834 00:34:20,542 --> 00:34:22,375 - And this guy has been a chef for royalty. 835 00:34:22,375 --> 00:34:24,417 He cooked for Queen Elizabeth, right? 836 00:34:24,417 --> 00:34:27,375 He's a celebrity chef before there were celebrity chefs. 837 00:34:27,375 --> 00:34:32,333 So Ray Kroc brings a celebrity chef to McDonald's corporate 838 00:34:32,333 --> 00:34:35,042 to help fight back against Colonel Sanders 839 00:34:35,042 --> 00:34:36,792 and his 11 herbs and spices. 840 00:34:37,917 --> 00:34:39,000 - I brought you here to innovate. 841 00:34:39,000 --> 00:34:40,667 You up for that? 842 00:34:40,667 --> 00:34:41,667 - Absolutely. 843 00:34:41,667 --> 00:34:42,875 [suspenseful music] 844 00:34:42,875 --> 00:34:44,042 - [Narrator] Kroc wants a product 845 00:34:44,042 --> 00:34:46,167 ready to release within six months, 846 00:34:46,167 --> 00:34:48,708 but Arend has no fast food experience. 847 00:34:48,708 --> 00:34:53,292 And chicken is proving challenging to mass produce. 848 00:34:53,292 --> 00:34:56,375 - The issue is chickens have bones, quite a few of them. 849 00:34:56,375 --> 00:34:59,542 You have all kinds of pieces and parts. 850 00:34:59,542 --> 00:35:03,167 So he realizes he has to take on this 851 00:35:03,167 --> 00:35:06,917 rather painstaking process of de-boning. 852 00:35:06,917 --> 00:35:10,375 [striking dramatic music] 853 00:35:10,375 --> 00:35:12,125 - [Narrator] To turn de-boned chicken 854 00:35:12,125 --> 00:35:14,000 into a viable menu item, 855 00:35:14,000 --> 00:35:15,875 Arend wants to create a machine 856 00:35:15,875 --> 00:35:17,708 to not just remove the bones, 857 00:35:17,708 --> 00:35:20,833 but also transform the chicken entirely. 858 00:35:20,833 --> 00:35:22,417 [tense explosive music] 859 00:35:22,417 --> 00:35:25,750 - Rene Arend decides he's going to grind all of the meat 860 00:35:25,750 --> 00:35:29,083 and the tissue into a paste and season it, 861 00:35:29,083 --> 00:35:31,708 and he's going to mold them into shapes. 862 00:35:31,708 --> 00:35:35,625 - They form it into a bell, a boot, a ball, 863 00:35:35,625 --> 00:35:37,500 and my personal favorite, the bow tie. 864 00:35:37,500 --> 00:35:40,375 They use a breaded tempura-style coating, 865 00:35:40,375 --> 00:35:42,417 so that it feels like it was fresh fried 866 00:35:42,417 --> 00:35:44,167 instead of previously frozen. 867 00:35:44,167 --> 00:35:46,083 [dramatic music] 868 00:35:46,083 --> 00:35:47,375 - [Narrator] In a mere five months, 869 00:35:47,375 --> 00:35:50,708 McDonald's is now armed with a unique chicken product 870 00:35:50,708 --> 00:35:54,042 and the proprietary technology behind it. 871 00:35:54,042 --> 00:35:58,375 - It's really a triumph of technology, 872 00:35:58,375 --> 00:36:01,083 and even chicken focused fast food restaurants 873 00:36:01,083 --> 00:36:03,042 didn't have that same technology. 874 00:36:03,042 --> 00:36:05,667 [upbeat music] 875 00:36:08,792 --> 00:36:09,792 - I love it. Perfect. 876 00:36:09,792 --> 00:36:11,750 [dramatic music] 877 00:36:11,750 --> 00:36:13,750 - It's kind of McDonald's showing that like, 878 00:36:13,750 --> 00:36:17,333 "With creativity, innovation, and technological know-how, 879 00:36:17,333 --> 00:36:20,667 "we can eat your lunch, KFC." 880 00:36:20,667 --> 00:36:21,875 [dramatic music] 881 00:36:21,875 --> 00:36:24,708 - [Narrator] Ray Kroc names it the Chicken McNugget. 882 00:36:24,708 --> 00:36:25,542 - Mm. 883 00:36:27,500 --> 00:36:29,708 - [Narrator] But just before its nationwide launch, 884 00:36:29,708 --> 00:36:33,042 the rollout is stopped in its tracks. 885 00:36:33,042 --> 00:36:34,625 [eerie music] 886 00:36:34,625 --> 00:36:38,292 The summer of 1980 is the hottest in nearly three decades. 887 00:36:38,292 --> 00:36:40,458 [dramatic music] 888 00:36:40,458 --> 00:36:42,750 - There are huge droughts everywhere. 889 00:36:42,750 --> 00:36:45,708 The agricultural industry is in shambles. 890 00:36:45,708 --> 00:36:46,750 Crops are dying. 891 00:36:46,750 --> 00:36:47,958 Animals are dying. 892 00:36:47,958 --> 00:36:51,208 They had over $20 billion in losses. 893 00:36:51,208 --> 00:36:53,333 - [Narrator] Over eight million chickens perish 894 00:36:53,333 --> 00:36:54,708 as a result of the heat, 895 00:36:54,708 --> 00:36:58,333 and a poultry shortage grips the country. 896 00:36:58,333 --> 00:37:00,375 - Tell the suppliers we'll pay double for every bird 897 00:37:00,375 --> 00:37:02,042 through the end of next quarter. 898 00:37:02,042 --> 00:37:04,292 - It's not how much we pay. 899 00:37:04,292 --> 00:37:06,000 They don't have any chickens to sell. 900 00:37:06,000 --> 00:37:07,792 [Ray sighing] 901 00:37:07,792 --> 00:37:09,667 - [Narrator] With millions already invested 902 00:37:09,667 --> 00:37:13,458 in their McNugget, Kroc now faces a challenge: 903 00:37:13,458 --> 00:37:16,292 recover the losses or risk his empire. 904 00:37:16,292 --> 00:37:19,333 [dramatic music] 905 00:37:21,542 --> 00:37:23,500 - What else could we nuggetize? 906 00:37:23,500 --> 00:37:25,083 [exciting dramatic music] 907 00:37:25,083 --> 00:37:27,708 - [Narrator] The inability to launch the Chicken McNugget 908 00:37:27,708 --> 00:37:31,000 is about to open the door to one of the most infamous 909 00:37:31,000 --> 00:37:33,375 fast food products in history. 910 00:37:33,375 --> 00:37:35,625 [suspenseful music] 911 00:37:39,958 --> 00:37:41,208 [dramatic music] 912 00:37:41,208 --> 00:37:44,208 In the heatwave of 1980, unlike poultry, 913 00:37:44,208 --> 00:37:48,167 the pork industry emerges largely unscathed. 914 00:37:48,167 --> 00:37:48,208 - By the end of 1980, 915 00:37:48,917 --> 00:37:49,167 - By the end of 1980, 916 00:37:49,625 --> 00:37:50,667 the national pork inventory 917 00:37:50,667 --> 00:37:53,458 is still over 64.5 million hogs. 918 00:37:53,458 --> 00:37:54,708 Plenty to go around, 919 00:37:54,708 --> 00:37:57,333 and actually pork prices end up falling. 920 00:37:57,333 --> 00:37:59,333 [dramatic music] 921 00:37:59,333 --> 00:38:01,208 - [Narrator] And now McDonald's wants to use 922 00:38:01,208 --> 00:38:04,042 their Chicken McNugget de-boning technology 923 00:38:04,042 --> 00:38:06,875 to pioneer a fresh approach to pork. 924 00:38:08,208 --> 00:38:10,542 - Unlike chicken, pork has been served 925 00:38:10,542 --> 00:38:15,292 boneless for centuries in sausage making. 926 00:38:15,292 --> 00:38:17,667 Instead of using intestinal casings, 927 00:38:17,667 --> 00:38:20,208 McDonald's uses salt to extract 928 00:38:20,208 --> 00:38:21,917 the protein from the muscle, 929 00:38:21,917 --> 00:38:23,875 which then serves as a binder 930 00:38:23,875 --> 00:38:25,250 to hold the pork together. 931 00:38:25,250 --> 00:38:26,917 [striking dramatic music] 932 00:38:26,917 --> 00:38:28,792 - [Narrator] Inspired by a recent trip to South Carolina, 933 00:38:28,792 --> 00:38:32,375 Arend uses McDonald's new technique to mold pork 934 00:38:32,375 --> 00:38:35,042 into the shape of a baby back rib. 935 00:38:35,042 --> 00:38:37,417 [striking dramatic music] 936 00:38:37,417 --> 00:38:40,708 - Although it looks like a rib with meat and bones, 937 00:38:40,708 --> 00:38:44,542 it's more of a pork burger, if you will. 938 00:38:45,292 --> 00:38:46,375 - And here we go. 939 00:38:47,125 --> 00:38:48,708 - Hmm. - It's not ribs. 940 00:38:48,708 --> 00:38:51,625 It's pork shoulder, which is not the same as pork ribs. 941 00:38:51,625 --> 00:38:53,333 - There is absolutely no rib meat, 942 00:38:53,333 --> 00:38:56,792 but it is McDonald's take on southern barbecue. 943 00:38:56,792 --> 00:38:59,917 And the funny thing is, even now in the 21st century, 944 00:38:59,917 --> 00:39:01,708 it's really unique. 945 00:39:01,708 --> 00:39:03,708 - I'm sorry, it's just awesome. 946 00:39:05,042 --> 00:39:06,375 - [Narrator] In 1981, 947 00:39:06,375 --> 00:39:08,792 the McRib is released nationwide. 948 00:39:08,792 --> 00:39:11,250 - It's like nothing anyone's ever seen, right? 949 00:39:11,250 --> 00:39:13,208 But it's got a lovely flavor profile. 950 00:39:13,208 --> 00:39:17,083 It has barbecue sauce, pickles, on a nice bun. 951 00:39:17,083 --> 00:39:18,208 - [Narrator] And it's coupled 952 00:39:18,208 --> 00:39:20,583 with an intriguing advertising campaign. 953 00:39:20,583 --> 00:39:22,667 - "For a limited time only," right? 954 00:39:22,667 --> 00:39:26,500 I mean, probably one of the greatest hooks, 955 00:39:26,500 --> 00:39:29,583 lures out there in fast food. 956 00:39:29,583 --> 00:39:30,833 It's almost like saying, 957 00:39:30,833 --> 00:39:33,917 "We only serve 25 of these burgers a night." 958 00:39:33,917 --> 00:39:36,667 I mean, that's always underneath the McRib. 959 00:39:36,667 --> 00:39:38,875 - [Narrator] Though it's not an instant sensation, 960 00:39:38,875 --> 00:39:42,375 the McRib buoys McDonald's through the chicken crisis. 961 00:39:42,375 --> 00:39:43,708 [midtempo fast-paced music] 962 00:39:43,708 --> 00:39:47,250 And as the supply of chicken meat slowly recovers, 963 00:39:47,250 --> 00:39:50,542 in 1983, McDonald's is finally ready 964 00:39:50,542 --> 00:39:53,000 to debut the McNugget nationwide. 965 00:39:54,250 --> 00:39:55,833 - Ray Kroc has been developing 966 00:39:55,833 --> 00:39:58,958 this new chicken product for four long years. 967 00:39:58,958 --> 00:40:01,667 This is his chance to defend McDonald's spot 968 00:40:01,667 --> 00:40:04,208 as the biggest name in the fast food industry, 969 00:40:04,208 --> 00:40:06,667 and once and for all crush KFC. 970 00:40:06,667 --> 00:40:08,208 - [Narrator] Upon its release, 971 00:40:08,208 --> 00:40:10,500 it causes an immediate buzz. 972 00:40:10,500 --> 00:40:12,542 - It is a huge success. 973 00:40:12,542 --> 00:40:14,667 It's the easiest, most delicious way 974 00:40:14,667 --> 00:40:17,542 to eat chicken you've ever experienced. 975 00:40:17,542 --> 00:40:18,542 - [Narrator] Within months, 976 00:40:18,542 --> 00:40:20,292 it's not just the McNugget 977 00:40:20,292 --> 00:40:22,542 that's becoming a global sensation, 978 00:40:22,542 --> 00:40:26,208 but also the four unique dipping sauces alongside of it. 979 00:40:26,208 --> 00:40:29,625 - I think in some ways the McNugget just kind of serves 980 00:40:29,625 --> 00:40:31,500 as a vehicle for the sauce. 981 00:40:31,500 --> 00:40:35,042 Personally, I'm a hot mustard and sweet-and-sour guy. 982 00:40:35,042 --> 00:40:39,000 - I absolutely would reach for sweet-and-sour, ranch, 983 00:40:39,000 --> 00:40:40,625 and barbecue equally. 984 00:40:42,042 --> 00:40:43,333 [light upbeat music] 985 00:40:43,333 --> 00:40:44,875 - [Narrator] Over the next three years, 986 00:40:44,875 --> 00:40:48,417 the McNugget grows to account for 7.5% 987 00:40:48,417 --> 00:40:50,333 of McDonald's domestic volume 988 00:40:50,333 --> 00:40:53,833 generating $700 million in sales. 989 00:40:53,833 --> 00:40:56,333 - All this technology that McDonald's developed, 990 00:40:56,333 --> 00:40:57,625 they were the only people who had it. 991 00:40:57,625 --> 00:40:59,833 So the fastest a competitor could come up 992 00:40:59,833 --> 00:41:01,208 with their own version of the Nugget, 993 00:41:01,208 --> 00:41:03,125 it was like three years later. 994 00:41:03,125 --> 00:41:05,708 - [Narrator] Soon McDonald's reclaims its throne 995 00:41:05,708 --> 00:41:07,708 at the pinnacle of fast food. 996 00:41:07,708 --> 00:41:11,958 With KFC nearing 6,000 locations in 1987, 997 00:41:11,958 --> 00:41:16,375 McDonald's is operating 10,000 stores in 47 countries. 998 00:41:16,375 --> 00:41:18,125 [bright upbeat music] 999 00:41:18,125 --> 00:41:20,917 - Who would've thought that McDonald's, a hamburger place, 1000 00:41:20,917 --> 00:41:24,375 becomes the second largest chicken retailer, 1001 00:41:24,375 --> 00:41:26,208 because of Chicken McNuggets. 1002 00:41:26,208 --> 00:41:29,125 Kind of cool, but kind of insane at the same time. 1003 00:41:29,125 --> 00:41:30,542 [bright upbeat music] 1004 00:41:30,542 --> 00:41:31,625 - [Narrator] As one of the most successful 1005 00:41:31,625 --> 00:41:34,125 menu additions in fast food history, 1006 00:41:34,125 --> 00:41:37,375 Chicken McNuggets revolutionize chicken consumption, 1007 00:41:37,375 --> 00:41:41,875 securing Kroc's legacy as the founding father of fast food. 1008 00:41:45,083 --> 00:41:46,667 [light upbeat music] 1009 00:41:46,667 --> 00:41:48,667 Today, McDonald's is the largest 1010 00:41:48,667 --> 00:41:50,792 restaurant chain in the world. 1011 00:41:50,792 --> 00:41:54,542 With 38,000 locations in 100 countries, 1012 00:41:54,542 --> 00:41:57,125 it's worth $215 billion. 1013 00:41:58,833 --> 00:42:02,542 - Simply drawing these golden arches in your mind, 1014 00:42:02,542 --> 00:42:05,083 you know exactly what it is, where it is, 1015 00:42:05,083 --> 00:42:06,792 what it tastes like. 1016 00:42:06,792 --> 00:42:10,875 And if you order a Filet-O-Fish at a McDonald's today, 1017 00:42:10,875 --> 00:42:13,708 a Big Mac anywhere in the world today, 1018 00:42:13,708 --> 00:42:18,667 if you walk into a McDonald's anywhere in the world today, 1019 00:42:18,750 --> 00:42:21,917 you will feel the influence, the ingenuity, 1020 00:42:21,917 --> 00:42:24,250 and the hard work of Ray Kroc. 1021 00:42:24,250 --> 00:42:27,250 [bright upbeat music]