Under the Influence

How the McDonald's founders profited more by promising less

Sometimes inventors eliminate a feature of their inventions to create a brand new product. And often, that brand new product takes on a whole new purpose.
McDonald's Golden Arches. (Gene J. Puskar/Associated Press)
Listen to the full episode27:28

Sometimes inventors eliminate a feature of their inventions to create a brand new product. And often, that brand new product takes on a whole new purpose.

This week, an encore broadcast of Promise Less, Profit More. Most products offer customers as many features and benefits as possible in order to lure shoppers toward a purchase. But then there are some companies that offer you less, and profit more. We'll look at a book company that eliminated their books and made millions, an electronics company that broke all the rules by eliminating the recording function from a tape machine and made history, and how two companies looked at a shoe and made millions by throwing away the laces. 0:59

Back in the late 1930s, brothers Richard and Maurice McDonald noticed that the only food seller making any money during the Depression in their small, Southern California town, was a hotdog vendor.

So they decided to open a drive-in restaurant, and named it "McDonald's Barbeque."

It had about 25 items on the menu, and business was okay.

Then, in 1940, the brothers decided to move to the larger town of San Bernardino, California. Once re-established, they expanded their barbeque menu, by adding burgers and steaks. They hired carhops to serve the food.

As time went by, the brothers noticed they were making most of their profit from hamburgers. So in 1948, they closed down for three months to analyze their business. Then they made a momentous decision:

They were going to eliminate features in order to grow.

First, they eliminated the carhops, and began serving food from a window. Then they eliminated tipping.

Next they eliminated most of their menu items, except for three things - hamburgers, French fries and apple pie.

They eliminated porcelain dishes and glasses, replacing them with paper cups, plates and bags.

They eliminated custom orders – burgers now came with ketchup, onions, pickles and mustard – period.

A Big Mac hamburger and french fries are pictured in a McDonalds fast food store in Central London on August 6, 2008. (Ben Stansall/AFP/Getty Images)

And they eliminated cigarette machines and jukeboxes so teenaged boys wouldn't hang around and scare off the highly lucrative family business.

The brothers also eliminated the walls surrounding the kitchen so the customers could see the food being prepared. They knew Mothers wanted to see the cleanliness of the kitchen, and Dads liked to see the meat sizzle.

When finished with the overhaul, the brothers placed a huge 25-foot high yellow "M" outside their restaurant, which they referred to as "the golden arches," and they re-named their restaurant. Calling it, simply: "McDonald's."

The Golden Arches.

Almost immediately, they had line-ups of over 200 people, and within just a few years, they could add "Millions Served" to their sign.

The brothers decided to franchise their concept in the 1950s. One day, a milkshake equipment salesman named Ray Kroc wondered why this small client was beginning to order so many milkshake machines.

He visits, falls in love with the concept, buys a franchise in Chicago, and would go on to purchase the entire chain from the McDonald brothers in 1961. Eventually Kroc would expand it to become the empire it is today, with over 35,000 restaurants and revenues of over $35 billion.

A worldwide corporation that began when the McDonald brothers decided to eliminate most of their features and concentrate on just three menu items.

Creating not only a thriving company, but a little something called the fast-food industry.


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Under the Influence is recorded in the Terstream Mobile Recording studio - a 1969 Airstream trailer that's been restored and transformed into a studio on wheels. So host Terry O'Reilly can record the show wherever he goes.
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