Word: mcdonaldization
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...Hamburger Degree. Such visits from Kroc are only one of the trials that a McDonald's licensee must endure. His courses at Hamburger U.. though short, are no snap; they cover everything from how to scrape a grill to how to post a double-entry ledger. "This is a hard-working place," says "Dean" Donald Breitkrentz, 36, a onetime candymaker. "Some of these people put in 14 hours a day. They get up at 6:30 in the morning to study...
...licensee gets some latitude in selecting which local promotions and public service projects to bankroll, but no choice whatever as to whether to be a do-gooder or not. Community service is a Ray Kroc obsession, and every McDonald's licensee is expected to spend a generous portion of profits on it. Headquarters gives each licensee a thick book of suggested promotions and constantly prods him to come up with new ones on his own. In New York's Harlem, Lee Dunham, one of McDonald's 60 black licensees, serves free hamburgers to unwed mothers every Saturday...
Careers Abandoned. Oddly, in a chain with McDonald's passion for standardization, licensees get neither food nor supplies from Oak Brook. Restaurants buy their own, mostly through regional cooperatives, though naturally the purchases must meet rigid headquarters specifications. The basic hamburger patty must be a machine-cut, 1.6-oz. chunk of "pure" beef - that is, no lungs, hearts, cereal, soybeans or other filler - with no more than 19% fat content, v. 30% for some competing ham burgers. The 3½-in.-wide bun must have a higher-than-normal sugar content for faster browning...
...McDonald's outlets have enough massed buying power - they purchase 1% of all the beef wholesaled in the nation - to line up steady supplies at stable prices in all normal times, and Oak Brook will help out in a pinch. Headquarters executives are currently buying up live steers with "contributions" levied on licensees, who get the meat back in the form of patties. McDonald's chiefs figure that they have corralled enough steers to get the company through the current beef shortage and avoid a price boost when the ceiling comes off retail beef prices this week...
...return for their money and submission to headquarters, the licensees get to use the McDonald's real estate, name and formula. For most, that is close to a license to print money. The average outlet grossed $508,000 last year, earning its operator upwards of $70,000 before taxes. For that reason, McDonald's receives thousands of license applications a year and accepts only about 10% of them. The company gives preference to existing licensees, but values business or professional experience of any kind. Every year large numbers of executives, doctors and lawyers abandon their careers to take...