The History and Evolution of McDonald’s
The restaurant that became fast food giant McDonald’s was started by entrepreneur Patrick J. McDonald in 1937 and was originally called “The Airdrome.” Located on Huntington Drive (Route 66) near the Monrovia Airport in the Los Angeles County city of Monrovia, California, The Airdrome was a small food stand type building and specialized in hot dogs and orange juice. Hamburgers were added to the menu shortly after opening and were sold at ten cents each, along with all-you-can-drink orange juice for five cents!
Three years later, in 1940, Patrick’s two sons Maurice (Mac) and Richard (Dick) took over the restaurant and moved it building and all to San Bernadino, California reopening as a carhop style restaurant. They also renamed it “McDonald’s Famous Barbeque” and changed the menu to add 25 mostly barbeque related products to the mix.
By 1948, the McDonald brothers began to realize that their most profitable product was the hamburger. So, they made the decision to drop barbeque from the menu entirely and on December 12, 1948, they converted from the successful carhop style restaurant to a complete self-service restaurant with a new, streamlined menu consisting of only hamburgers, cheeseburgers, potato chips, coffee, soft drinks, and apple pie. As a part of the reopening, they changed the name to just “McDonald’s” (but often called “McDonald’s Famous Hamburgers” on signage or marketing materials). After about a year, potato chips and pie were swapped out for McDonald’s now famous french fries and milkshakes.
A Time for Change
In 1952, the McDonald brothers came to the conclusion that they needed a new look and a new building to continue growing. So, they began interviewing architects and chose Stanley Meston from nearby Fontana, California to help them come up with designs for a new, improved building.
The new design of the restaurant featured sparkling surfaces of red and white ceramic tile combined with stainless steel and brightly colored sheet metal. The new look was topped off with red, white, yellow and green neon with two 25-foot yellow sheet-metal arches, also trimmed in neon lighting. These arches were dubbed the “golden arches” from the very beginning and there was also a smaller arched sign at the roadway entrance incorporated into the new design. To complete the transition to a more fast food restaurant, McDonald’s introduced the use of a new mascot named “Speedee,” who was a pudgy character in a chef’s hat.
The following year, in 1953, the McDonald brothers set out with the new designs in hand to look for franchisees. They soon found a franchisee in Neil Fox, who opened the first McDonald’s using Meston’s golden arches design. Opening in May 1953, the new McDonald’s restaurant was located at Central Avenue and Indian School Road in Phoenix, Arizona. Soon after the first franchise was opened, Fox convinced his brother-in-aw and another man named Burdette “Bud” Landon to open a second franchise store. This new location was opened on August 18, 1953 at 10207 Lakewood Boulevard in Downey, California and is still standing today in its original look.
In 1954, a salesman for Prince Castle brand Multimixer milkshake machines – Ray Kroc – discovered that eight of his machines were being used in a single McDonald’s restaurant in San Bernadino. Curious, he scheduled a trip to California with his good friend Charles Lewis.
After seeing the restaurant in person and meeting with the McDonald brothers, Kroc and Lewis saw an opportunity and suggested they work with the brothers to take their franchise nationwide. The brothers were hesitant to expand across the country at first, but Kroc convinced them to give it a go and soon he was headed back to his home outside Chicago, Illinois with rights to establish new restaurants throughout the United States – with the exception of a few locations in California and Arizona already licensed by the McDonald brothers.
The deal that Kroc negotiated would pay the McDonald brothers one-half of one percent of gross sales for all new McDonald’s franchises. And, on April 15, 1955, Kroc opened his first McDonald’s restaurant at 400 North Lee Street in Des Plaines, Illinois, just outside the city of Chicago.
Once he had the Des Plaines restaurant up and running, Kroc set his sights on finding franchisees and things were looking bright. However, he soon hit a setback as in 1956 Kroc discovered that the McDonald brothers had previously licensed the franchise rights to Cook County, Illinois to someone else, the Frejlach Ice Cream Company. Rightly so, Mr. Kroc was furious that the brothers had not informed him of this prior agreement. But, he was able to purchase the franchise rights back and move forward with his franchising plan. Although he had to pay the Frejlach company five times what they paid to McDonald’s, the move was well worth it and by 1958, Kroc had opened 34 new franchises. 1959 saw a huge spike with 68 new restaurants opened, bringing Kroc’s total to 102 locations.
Kroc was not only good at franchising, he was also good at marketing. In 1960, McDonald’s launched a “Look for the Golden Arches” campaign that helped to skyrocket sales. Two years later, in 1962, the fast food chain launched its now internationally famous Golden Arches logo. And, in 1963, the restaurant chain had sold its millionth hamburger and introduced a child friendly red-haired clown named Ronald McDonald.
At the start of the 1960s, McDonald’s was really becoming one of the most well known brands in the country and Kroc made an offer to buy out the McDonald brothers. Paying $2.7 million to the brothers, Kroc was now on his way to making McDonald’s the number one fast-food chain in America.
In 1965, Kroc took the McDonald’s Corporation public. Common shares opened at $22.50 per share, but by the end of the first trading day, the cost had risen to $30 per share. 100 shares purchased on opening day for $2,250 would have been worth an amazing $5.7 million by the end of 2010 thanks to stock splits.
The 1960s ushered in the introduction of several new products that are still popular today. The Filet-O-Fish sandwich debuted in 1962 and The Big Mac sandwich came to market in 1968. 1969 was a big year for the company, with its billionth hamburger sold and the introduction of a new “mansard roof” building design that featured new indoor seating. Just two years later, in 1971, McDonald’s restaurants had officially opened in all 50 states.
McDonald’s stellar growth continued in the 1970s. In 1972, the company exceeded the $1 billion mark in annual sales. Also n 1972, McDonald’s pioneered fast food breakfast with the introduction of the Egg McMuffin. And, in 1975, McDonald’s began offering a full breakfast menu. By 1976 McDonald’s had sold 20 billion hamburgers and exceeded $3 billion in annual sales.
Introduction of the Drive-Thru
Following competitor Wendy’s, McDonald’s opened is first drive-thru window in 1975. The Sierra Vista, Arizona store gave American’s, for the first time, a fast and convenient way to buy a meal without having to leave the comfort of their cars. With a focus on speed an efficiency, drive-thru sales eventually came to account for more than half of McDonald’s total corporate-wide sales.
1979 saw the launch of another popular to this day product… the Happy Meal. This newly introduced child’s combo meal came complete with a toy! Then, the early 1980s saw an increase in competition known that became known as the “burger wars.” Burger King, Wendy’s and McDonald’s all entered into aggressive marketing campaigns to try to win America’s hearts and wallets.
The 1980s gave way to changing customer tastes. To keep up with the food trends, McDonald’s introduced the McChicken sandwich in 1980. Although popular today, the McChicken sandwich was not a hit right away and was pulled from the menu and replaced by Chicken Nuggets in 1981. Then, in 1985, McDonald’s entered into the health food industry by introducing ready-to-eat salads.
1991 saw the first “McDonald’s Express” location, a smaller-scale restaurant typically placed in busy areas (malls, etc.) that offered fewer menu choices in exchange for delivery speed. Also in the year 1991, 37% of corporate-wide sales were now coming from stores outside the United States. By the early 1990s, McDonald’s had restaurants in 58 foreign countries, with more than 3,600 individual restaurants outside the United States.
In the early 1990s, the company had some disappointing product launches, with failures like the McLean Deluxe and Arch Deluxe healthy sandwiches. And, the the 90s also brought about a change in look with the evolution of several new McDonald’s Golden Arches logo variations on packaging and promo materials.
“I’m Lovin’ It”
2003 witnessed a dramatic update in McDonald’s marketing and restaurant design with the “I’m Lovin’ It” era. The company initiated the campaign to reinvent itself as a more hip and modern restaurant chain. Variations of this new look are still in existence today in one form or another, but the phrase was dropped from the official logo in 2006. The current logo / trademark has evolved into a rendition of the famous Golden Arches look by itself.