Lessons from “The Founder” film

1. Not every patent has a chance of being commercialized.

Ray Kroc was a poor salesperson before meeting the McDonalds brothers (Mac and Dick),
trying to market amusing things like a "wax cup," "fold a nooks," and a multi mixer that can
make five cups of milk at once. Unless we have done marketability and sustainability
research, our ideas may not be lucrative just because they meet the novelty requirement.
The Prince Castle Multi Mixer firm, ironically, has led Ray to the McDonalds brothers, as he
was attracted by the McDonalds' request for eight of those mixers at once.

2. Keep your trade secrets safe at all times.

Trade secrets are proprietary information about know-how, recipes, and anything else that
gives our company an advantage. These business secrets must remain hidden from
inquisitive eyes and the broader public. The McDonalds brothers offered Ray a tour of their
kitchen at the beginning of the movie, demonstrating how the ‘speedy method' was used.
The McDonald brothers even told Ray about the system's origins, explaining that it was
based on a simulation method used in tennis courts, and that serving a meal in under a
minute, as opposed to other drive-in restaurants that took much longer to prepare meals
for their customers, was their Unique Selling Proposition at the time.

3. Be bold in investing in a single Intellectual Property after thoroughly analysing and

weighing the benefits and risks.

Ray takes a risk in taking out a mortgage on his house without his wife's knowledge in order
to invest after persuading the McDonald brothers to allow him head the effort to build
McDonald's franchise company. He reached a deal with McDonalds on the condition that
any future modifications to the firm must be approved in writing by the McDonalds
brothers.

4. To the furthest degree possible, standardize your franchise.

In a franchising business, standardizing everything from our restaurant's image to its

services is critical so that your franchise may have only one identity that becomes the face
of your restaurant's brand. When you ensure that each of your franchises provides the same
quality in both products and services, regardless of which franchise your consumers visit,
you boost your business's brand awareness and induce brand loyalty among your
customers. Before Ray Kroc took over the franchise business, the McDonalds brothers tried
multiple times to franchise their company, but each attempt failed because they were
unable to assure that franchisees followed their system and provided the same quality of
products and services.
5. To keep the upper hand, the franchisor must constantly have negotiation power over the
franchisee.

Despite the fact that Ray had opened numerous McDonald's franchises, he was still
experiencing financial troubles as a result of his low profit share in his contract with the
McDonalds brothers. It wasn't until Ray met Harry Sonneborn, a financial adviser who had
overheard Ray's financial problems at the bank. Ray was persuaded by Harry to start a real
estate company using his franchises. Franchise Realty Corporation was formed as a result,
and Ray quickly owned all of the properties where his franchises were located. This move
not only alleviated Ray's financial concerns, but it also gave him additional negotiating
leverage over the franchises' quality control. The McDonalds brothers' bargaining power
had dwindled, and they were unable to hold Ray in check.

6. Know how much your Intellectual Property is worth.

The McDonalds brothers' invention was revolutionary. To say the least, their fast food
restaurant business was groundbreaking, but they failed to realize the full potential of their
intellectual property and gave up quickly every time they encountered a roadblock. Ray
Kroc, on the other hand, was focused and had a clear idea of what he intended to do with
McDonald's intellectual property. Someone else will do something excellent if you don't do
it quickly enough!

7. When dealing with intellectual property, all terms and conditions must be stated clearly
and completely.

The McDonald brothers finally agreed to sell the majority of their firm to Ray for 2.7 million
dollars plus a 1% royalty after they could no longer manage Ray, to the point that Mac was
rushed to the hospital due to diabetic shock. Ray agreed to the terms at first, but later on
the signing day, he informed the brothers that he was unwilling to incorporate the 1%
royalty as a stipulation in the agreement, and instead recommended shaking hands with the
gentlemen. As one might expect, Ray has never followed through on the agreement, and
the McDonald brothers have been denied a 1% royalty worth an estimated $100 million
every year.

8. A well-chosen and memorable trademark can have a significant impact on your business.

Every name, I believe, has a soul, and when used correctly as a trademark for the proper
firm, it may provide it a competitive advantage. In the movie also Kroc was seen explaining
Dick that it was love at first sight to see the name McDonald’s as it created a great value in
itself.