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Big Mac: Inside the McDonald's Empire

A look into the history and working philosophy behind the world's largest food-service corporation.


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Despite the low-wage, low-prestige reputation of the typical “McJob,” a McDonald’s franchise owner often manages budgets and income in the millions of dollars. This CNBC program looks at the history and working philosophy behind the world’s largest food-service corporation, featuring a number of interviews and concise case studies.

An operations manager runs six Connecticut restaurants and hopes to become an owner. A once-struggling store in the same state has built newfound profitability on frequent tour bus crowds. And a former Four Seasons chef talks about his mid-career move to the McDonald’s test kitchen, while the company’s future in China—and nutrition-conscious America—is also explored.

Video Segments
1. McDonald's Owner Operators McDonald's successful owner/operators may work 14-20 hours per week, but they reap the financial benefits. They rely on store managers and operations managers to run their busy franchises. 
2. McDonald's Managers Financially Successful Good McDonald's managers may earn $100,000 or more per year, and owner/operators often earn $1 million or more annually. Managers supervise crews, check quality control, and watch bathroom cleanliness closely. 
3. McDonald's Rise from Financial Downturn In 2002, McDonald's posted a quarterly loss for the first time ever. Its growth strategy was unsustainable and the company lost sight of details. Customers experienced dirty stores, cold food, and unfriendly staff. 
4. Ray Crock: Empire Builder In 1955, Ray Crock opens his first McDonald's. He took a small hamburger stand and turned it into a global food network. His prototype store was a model for potential franchisers to observe. 
5. Ray Crock Expands McDonald's Empire Ray Crock built his empire slowly, concentrating on details and consistency. Franchisees pay Crock rent, help advertise locally, and sometimes innovate the menu. The company goes public in 1965 and the next day, Crock is a millionaire. 
6. McDonald's Test Kitchens McDonald's head chef, Chef Dan, heads up the food innovation department, where he develops the products necessary to satisfy a changing society. New additions include the Asian chicken salad, the fruit and yogurt parfait, and the snack wrap. 
7. McDonald's Food Product Testing Process Every item that makes up a potentially new McDonald's product goes through intense scrutiny in a detailed development process. This segment follows the testing process of an Angus burger under consideration for McDonald's menu. 
8. McDonald's New Food Items: Successes and Failures At McDonald's test kitchen, each new flavor of coffee is analyzed and deconstructed "by the most refined palates." With all the testing that proposed products go through, there are still product failures such as the Arch Deluxe. 
9. Portion Sizes and Obesity Over the years, McDonald's portion sizes have increased, causing concern among some health advocates. Today, over 9 million children are obese. McDonald's defends its position and urges people to make healthy food choices. 
10. McDonald's: Nutritionally Sound for Children? Ronald McDonald, the company's mascot, is a means of marketing to kids. Happy Meals, for example, are not nutritionally what children should eat, but the advertising and toys often win out over parental input about food choices. 
11. High Caloric Content of Fast Foods Most fast-food customers are not aware of the caloric content of the foods they eat. McDonald's provides nutritional information in several places. Should fast-food restaurants list calorie content on the menu board? McDonald's says, "No!" 
12. McDonald's in China The capitalist revolution sweeping through the People's Republic of China has welcomes 800 McDonald's stores. Company executives see endless opportunities to serve China's 1.3 billion population. 
13. McDonald's Expansion Opportunities in China McDonald's and China-owned Sinopec oil distributors partner to allow McDonald's to open stores at all current and future Sinopec gas stations. McDonald's faces stiff competition from other fast-food chains such as KFC. 
14. McDonald's Challenges in China: Taste and Food Safety McDonald's China operations face competition from local food habits. Adapting to palates used to traditional foods, McDonald's chefs offer products not available in the U.S. Food safety is McDonald's biggest concern in its China operations.



Grade: 6-8, 9-12

Big Mac: Inside the McDonald's Empire (DVD)
© 2007
Time: 46 Minutes

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