You know, just because I write about the Walt Disney Company, I get some VERY interesting mail.
Sometimes, it’s letters from people who are sharing secrets about various projects that the Mouse currently has in the works (EX: Even more juicy inside info on “Destination Disney” came rolling in yesterday. So I promise that I’ll try to do another story on this most intriguing soon-to-debut-at-WDW program next week, okay?). And sometimes, it’s e-mail from folks who are hoping that I’ll champion their Disney-related cause.
For example: Just yesterday, I found a note in my in-box from this guy (let’s call him Joe) who clearly doesn’t like McDonald’s. Here’s a quote from Joe’s e-mail:
“(McDonald’s) has absolutely no business doing business inside of the Disney theme parks. After all, everyone knows that Walt Disney hated fast food places. Walt would have had a fit if he knew that Eisner was allowing that fast food company to sell French Fries inside his beloved Disneyland.”
Sorry, Joe. But you’re not exactly on the money when it comes to describing how Walt Disney felt about fast food. To be honest, according to this great little book that I just finished reading (D. W. Miller’s What Would Walt Do?: An Insider’s Story about the Design and Construction of Walt Disney World. Look for a review of this thin but fun volume this coming Thursday on JimHillMedia.com), Walt just loved fast food. Particularly the stuff that was served at McDonald’s.
In his book, Miller tells about how — in the early 1960s, as Walt was flying around the country (I.E. Taking part in the land search for Disney World, meeting with executives for the 1964 New York Worlds Fair, etc.) aboard Mickey Mouse One — he’d sometimes start to feel a little hungry. When that happened, Disney would reportedly amble up to the cockpit and ask the pilot: “Where are we?”
The pilot would answer by saying something like “We’re over Tulsa, Walt.” Or Bayonne. Or Boise.
Disney would then follow his first question with a second. “Is there one down there?”
With that, the pilot would consult a booklet that listed the location of every single McDonald’s in the continental United States. If there was one of these restaurants down in the city that the Disney corporate plane was flying over, Walt would then order the pilot to land. Once they were safely on the ground, Disney would call for a cab.
And with that, Walt and his traveling party would head out for the nearest McDonald’s to get a bite to eat.
Not exactly what you wanted to hear, is it, Joe? Wait. It gets worse. Have you ever heard the (perhaps apocryphal) story about how — if restaurant chain founder Ray Kroc had been willing to jack his prices up by just a nickel — the world’s very first McDonald’s might have been built right inside of Disneyland?
Strange but allegedly true, kids. And I promise that I’ll get this flat out bizarre “What If” story in just a moment. But in order to tell this tale properly, I have to give you a little deep background first.
You see, the parallels between Walt Disney and McDonald’s founder Ray Kroc’s lives are beyond spooky. EX: Walt and Ray were both from Illinois (Disney was born in 1901, Kroc born in 1902). And — when they were teenage boys — both men lied about their age so that they could enlist in the Red Cross ambulance service during World War I.
Weird? Wait. It gets weirder. Disney and Kroc end up getting assigned to the very same unit: Ambulance Company A (which actually shipped out for France right after the Armistice was signed in 1918). And while they’re overseas, these two boys from the Midwest strike up … well, not exactly a friendship. But at least an acquaintance-ship.
At the very least, Ray knew young Walt well enough to describe the future movie mogul thusly in his 1977 autobiography, Grinding It Out: The Making of McDonald’s: “(Disney) was regarded as an odd duck, because whenever we had time off and went out on the town to chase girls, (Walt) stayed in camp drawing pictures.”
Eventually, Ray and Walt both returned to the US. They both quickly abandon the Midwest, heading out to Southern California to seek fame and fortune.
It’s here that Kroc and Disney’s paths divide. After five years full of tough breaks and back breaking effort, Walt finally does achieve some fame and fortune — thanks to “Steamboat Willie.” This single short — the first cartoon with synchronized sound — puts Disney on the road to success.
Whereas Ray … well, it would be another 26 years of hustling and hard selling before his big break finally arrived. The day when Kroc — who was then a salesman for the Mixmaster Corporation — met up with Richard and “Mac” McDonald, two brothers who were having tremendous success with their San Bernadino, CA restaurant thanks to its innovative “Speedee Service System.”
Ray got one glance at the McDonalds brothers’ food production methods — where all the burgers at their restaurant were cooked and put together assembly-line-style, in order to get the low cost eats out to the customers as quickly as possible — and immediately saw the potential of the system. Which is why Kroc begged Richard and “Mac” to award him the rights to set up other restaurants around the country that would feature the McDonalds brothers’ “Speedee Service System.”
The only problem was that the McDonalds brothers weren’t all that eager to cash in on their idea. In fact, only a few months before Ray arrived on the scene, Richard and “Mac” rejected a similar offer from the Carnation Milk Company. But Kroc was so persistent that the McDonald brothers eventually caved and awarded this 52-year-old salesman the rights to use their “Speedee Service System.”
Now Ray just knew that — with the proper placement and promotion — that his concept for a national chain of fast food restaurants would be a huge success. But the only way to guarantee that success was to find just the right location to launch the McDonald’s chain from. Some place that would give the franchise’s “Speedee Service System” plenty of exposure.
Well, it was just about this time — April 1954 — that Walt Disney unveiled his plans for Disneyland; a bold new concept in family fun parks. And as soon as Ray heard about what his old “war buddy” was up to, Kroc knew that he’d finally found the perfect place to build his first McDonald’s franchise.
Which is why — in late 1954 — Ray sent the following letter to Walt. In part, it read:
Dear Walt,
I feel somewhat presumptuous addressing you in this way. Yet I am sure you would not want me to address you any other way … My name is Ray A. Kroc … I look over the Company A picture we had taken in Sound Beach, Conn. many times and recall a lot of pleasant memories.
Okay. Having buttered up his old “war buddy” a bit, Kroc — the super salesman — now moves in for the kill.
I have very recently taken over the national franchise of the McDonald’s system. I would like to inquiry if there may be an opportunity for a McDonald’s in your Disneyland Development.
Kroc’s concept was that — given the ten of thousands of people who were sure to flock to Disneyland once the theme park actually opened — Walt was going to need a restaurant that would be able to quickly feed crowds of this size. Ray insisted that the McDonald brothers’ “Speedee Service System” would be up to this daunting task, churning out hundreds of hot, fresh, tasty hamburgers every hour. Which could then be sold for a very affordable price.
Walt responded quite cordially to Kroc’s note, then told the former Red Cross ambulance driver that he would be handing Ray’s proposal over to the Disneyland executive who was in charge of Disneyland’s concessions. And after that … well … the story gets kind of murky.
I mean, we all know that the world’s first McDonald’s franchise DIDN’T open at Disneyland back in July of 1955. But as to why this deal between two old “war buddies” didn’t go through … well, there are a number of theories.
For example: To his dying day, Ray Kroc insisted that the real reason that the world’s first McDonald’s was NOT among the assortment of eateries that was found inside Disneyland when the park first opened on July 17, 1955 was because Disneyland executives had tried to force Ray to raise the prices of the food that he would be selling at his inside-the-berm restaurant.
To be specific, Kroc supposedly balked because the head of Disneyland concessions had insisted that Ray raise the price of a single order of McDonald’s French Fries from 10 cents to 15 cents. The idea behind this particular price boost was that — by adding that extra nickel to the cost of the fries — Walt Disney Productions was, in effect, tacking on a concessionaire’s fee. As in: Ray could keep 10 cents out of the 15 cents that he charged for his French Fries. But that other nickel would go straight into Disneyland’s coffers.
To hear Kroc tell this story: Ray hit the roof as soon as he heard about this. Kroc insisted that he would never deliberately price gouge his patrons, overcharge customers for food just so Walt Disney Production could make an extra 5 cents off of every bag of French Fries that he sold. To do this would be a disservice to McDonald’s loyal customers. Which is something that Ray just couldn’t bring himself to do. Break that sacred trust. Which is why Kroc says he decided to back out of the Disneyland project.
Which — you’ll have to admit — is a very colorful, most entertaining yarn. The only problem with Kroc’s version of events is that as of early 1955, Ray hadn’t actually opened a McDonald’s restaurant franchise yet. So there were no “loyal customers” yet to be deeply offended by Disney’s insistence that Kroc raise the price of the French Fries he was selling. So Kroc’s story appears to be … well … a krock.
A more likely scenario was that the executive in charge of Disneyland’s concessions was probably rather intrigued by Ray’s proposal. But since (as of late 1954 / early 1955, anyway) Kroc hadn’t actually run a restaurant yet (Ray’s very first McDonald’s franchise — a restaurant that would eventually be built in Des Plaines, Il. — wouldn’t even open its doors ’til April 15, 1955), it just didn’t make sense for Walt Disney Productions to award a concession contract of this size to a neophyte like Kroc. Whether Ray was a “war buddy” of Walt’s or not, a move like this just wouldn’t have made much business sense.
So — in spite of what Ray Kroc may have repeatedly told reporters from the 1950s on forward — Disneyland veterans that I’ve spoken with over the years insist that there never were any serious plans to open a McDonald’s inside Disneyland back in 1955. Sure, there was some discussion of building a restaurant just like this inside the theme park. But Disneyland’s fast food project never really made it past the talking stage.
Mind you, Ray Kroc was not the sort of guy who’d let the truth stand in the way of a good story. (That’s just the salesman way, folks. To embroider a story. To expand an anecdote until it becomes an epic. To take a kernal of truth and stretch it into a whopper of a tale.) So over the next 15 years, Kroc told this crock over and over and over. Until (evidently), Ray began to believe this story himself. Which is why McDonald’s founder reportedly began to nurse a wee bit of a grudge toward Walt Disney Productions.
And longtime McDonald’s Corporation employees will tell you that it was NEVER a wise move to get Ray Kroc angry. Why? Because Kroc allegedly was one of these guys who was quick to anger and very slow to forgive.
To put this somewhat politely, Ray Kroc was kind of an SOB. A ruthless, driven businessman who could be absolutely brutal with his competition. In one of Ray’s more infamous interviews, McDonald’s chairman was quoted as saying that — when it came to his business philosophy — it was “rat eat rat, dog eat dog.” Talking about his competitors in the fast food field, Kroc said “I’ll kill ’em and I’m going to kill ’em before they kill me. You’re talking about the American Way of (doing business), survival of the fittest.”
As I mentioned earlier, Ray was known for nursing a grudge. Perhaps his most infamous piece of payback involved the McDonalds brothers. “What beef could Ray Kroc possibly have with the inventors of the McDonald’s hamburger?,” you ask. Well, under the terms of the franchise agreement that Kroc had with Richard and “Mac,” Ray was responsible for the entire expansion process for the fast food chain, while the brothers retained control of the restaurant’s production process. More importantly, Richard and “Mac” got a 0.5% share of the corporation’s profits. Which — thanks to all of Ray’s hard work — had made the McDonalds very wealthy men.
Unfortunately, by 1961, Kroc had grown frustrated with this arrangement. He felt that the McDonald’s brothers were making far too much money off of his efforts. Which is why Ray offered to buy Richard and “Mac” out.
After some fairly protracted negotiations, the McDonalds brothers agreed to sell the business to Kroc if he gave each of them one million dollars in tax free cash. That “tax free” condition is what eventually drove Richard and “Mac”‘s pay-out price up to $2.7 million. Which was a hell of a lot more than Ray had planned on spending to finally gain total control of the restaurant chain that he had built.
According to the terms of the McDonald’s Corporation sales agreement, Richard and “Mac” were allowed to retain ownership of their original San Bernadino, CA restaurant. They just weren’t allowed to call it “McDonald’s” anymore. Renamed “The Big M,” the restaurant operated for just six months after the sale of the company had been completed. But then it suddenly closed.
Why did “The Big M” close? Because Ray Kroc built a McDonald’s right across the street from the McDonald brothers’ restaurant. Why? Just so Ray could have the pleasure of driving Richard and “Mac” out of business. To pay them back for that $2.7 million that Kroc had had to pay out in order to finally gain total control over the national restaurant chain that he had built.
There are some who will suggest that Ray Kroc bore a similar sort of grudge toward Walt Disney Productions. That — as late as the early 1970s — Ray was still supposedly miffed because his fast food chain chain had been denied the opportunity to make a spectacular debut as a featured attraction at Disneyland back in 1955.
This may be why — back in the early 1970s — Kroc actually announced plans to build a theme park of his own in Southern California (one that would have been in direct competition with Disneyland) called “Western World.”
So was this another one of Kroc’s crocks? Actually, no. This theme park project (which was to have been fully funded by the McDonald’s Corporation) got enough along that Ray actually picked out a 1500 acre site for “Western World” northeast of Los Angeles.
So what happened to Ray Kroc’s plans to take on Disneyland? As it turns out, McDonald’s board of directors opposed the “Western World” project. You see, the board was worried that it might tank (which would force the corporation to start diverting restaurant funds in order to keep the theme park afloat). Which is why McDonald’s board of directors did everything they could to try and prevent “Western World” from going forward.
But Ray Kroc was a tough guy to say “no” to. In fact, Kroc was so determined to get “Western World” built (and give Disneyland a run for the money) that Ray reportedly told the board that he’d personally put up all of the money necessary to retain an option on the park’s proposed 1500 acre construction site. Money that Kroc would take out of his very own pocket in order to make this dream a reality. Finally give Ray his chance to settle the score with those short-sighted Mouse House managers.
But in the end, cooler heads prevailed. And Kroc (heeding the advice of his board of directors) reluctantly toed the line and abandoned his plans to build “Western World.”
Which brings us up to the early 1980s, when Walt Disney Productions suddenly found itself under attack by corporate raiders like Ivan Boesky and Saul Steinberg. At that time, Ron Miller, Card Walker, and Ray Watson were supposedly desperately casting about for a major American corporation — one with extremely deep pockets — which could come to the Magic Kingdom’s rescue.
So which fast food chain did Disney’s then-senior management reportedly discreetly approach? You guessed it. The McDonald’s Corporation.
Unfortunately, by this time, Ray Kroc was McDonald’s senior chairman. A largely ceremonial role. Which mean that — as much as Ray probably would have liked to have finally gotten his hands on the Mouse House — he just didn’t have the power (or more importantly, the votes on the board) necessary to swing this sort of deal.
But let’s also keep in mind that this was the Walt Disney Productions of the late 1970s / early 1980s that we’re talking about here. A studio that hadn’t had a real hit film since “The Rescuers” was originally released in 1977. A corporation that seemed to be creatively exhausted. An entertainment giant that was seriously out of touch with what consumers wanted to buy, what moviegoers wanted to see.
Which is why we shouldn’t too hard on the McDonald’s Corporation for allegedly passing up this opportunity to acquire Walt Disney Productions. Who could have known that the Mouse would rise like a phoenix up out of the ashes and become this media powerhouse?
Of course, what makes this all so ironic is that — because the Walt Disney Company has become so all powerful — that the McDonald’s Corporation (having missed out on its one opportunity to actually swallow the Mouse) is now willing to do whatever it has to stay in business with Mickey: promote Disney movies, hold contests for the Disney Cruise line, even sell sets of collector glasses. Whatever it takes to keep Disney Company management happy (Which — in turn — helps this fast food chain to move over 10 million Happy Meals every week).
But — seeing as it looks like “You deserve a break today” — why don’t we pause here and pick up the rest of the story tomorrow?