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11/04/05 . Eric Herman Business Reporter . Chicago Sun Times . USA  
 
McDonald's to mark 50th year  
 
McDonald's celebrates its 50th year in business Friday by opening a new restaurant at 600 N. Clark, on the site of the former Rock 'n' Roll McDonald's.  

The new restaurant boasts 60-foot golden arches that take a bite out of the Chicago skyline, and evoke McDonald's of the past. While the arches look retro, the restaurant itself is now. And 600 N. Clark's management and ownership show how McDonald's has changed in the last 50 years, evolving from a small hamburger chain into a $40 billion corporation whose character is truly international.

"The pressure is there, where we all want to succeed in opening this restaurant and making it, you know, a smooth opening," said Alija Hadzisalihovic, who will be one of two co-managers of the 50th anniversary McDonald's. Added co-manager Francisco Quintana, "We expect more people than before."

The restaurant will have plenty of space for them. The two-story, 24,068-square-foot 50th Anniversary McDonald's has seating for 300 and escalators to move people around. Its front counter is 40 feet long, with 10 cash registers. The interior is divided into "zones," called the Kitchen, Living Room, Family Room, Dining Room and Media Room. The second floor has a dessert and coffee center. Outside are 69 parking spaces and a two-lane drive-through, with a canopy in the exact proportions of the first McDonald's franchise.

Hadzisalihovic, 33, and Quintana, 35, bring a global flavor to what will become, in effect, the flagship restaurant of the world's best-known restaurant chain. Hadzisalihovic hails from Brcko, Bosnia, and immigrated to the United States in 1997. Quintana came to the U.S. in 1990 from Guerrero, Mexico. His first job at McDonald's was cleaning bathrooms at the restaurant on the Des Plaines Oasis on I-90. He worked the graveyard shift.

McDonald's Corp. traces its origins to Des Plaines, where company founder Ray Kroc opened his first restaurant on April 15, 1955. Kroc had visited a hamburger place in San Bernardino, Calif., run by two brothers named McDonald, and bought exclusive franchise rights, allowing him to open other sites. That July, Kroc opened his second McDonald's in Fresno, Calif., run by a franchisee. That year, the company had total sales of $193,772. He eventually bought out the brothers.

Today, McDonald's boasts 31,561 restaurants in 119 countries and serves more than 48 million people a day, according to the company. Its 2004 revenues hit $19.1 billion.

According to James Schrager, clinical professor at the University of Chicago Graduate School of Business, McDonald's succeeded by continually finding new ways to grow -- whether it was adding breakfast in 1977 or, more recently, shifting to 24-hour service.

"All growth will end, and McDonald's has cheated that law time and time again. They are one of the few companies that has taken its original innovation, and continued to find new ways to do things differently," Schrager said.

The McDonald's story has not been an uninterrupted success. The Oak Brook-based company hit a rough patch earlier in the decade, when sales slipped because of declining service and food quality. In 2002, the company suffered 11 months of sales declines in restaurants open more than a year. Investors bailed out of the stock.

That changed in January 2003, when McDonald's veteran Jim Cantalupo came out of retirement to run the company. Cantalupo and his lieutenants shifted the company's focus from building new stores to increasing sales at existing stores. That meant improving customer service, updating the menu and launching a hip-hop-influenced ad campaign.

"McDonald's is paying a lot closer attention to what consumers want to eat," said Morningstar Inc. analyst Carl Sibilski.

The company continues to face image problems arising from claims its food leads to obesity or harms health in other ways. A federal appeals court in January reinstated a lawsuit brought by two teenagers who allege McDonald's food made them obese. The 2004 documentary "Super Size Me" asserted a steady diet of McDonald's food caused a variety of health problems.

The company has fought back, recently launching an ad campaign emphasizing the importance of exercise and featuring athletes such as Venus and Serena Williams. It has also tweaked old favorites like the Happy Meal, offering peeled apple slices with a low fat caramel dipping sauce and apple juice as well as traditional choices.

The renewed emphasis on the customer worked. Sales in the U.S. have grown for 23 consecutive months, and the stock has doubled since Cantalupo took over. The turnaround has continued even though the company lost two chief executives last year. Cantalupo died suddenly while attending a franchisee convention in Orlando. Seven months later, his successor, Charlie Bell, resigned because he had cancer. Bell died in January.

McDonald's 50th anniversary celebration promises to be a full-blown media event, featuring Chief Executive Jim Skinner and, of course, Ronald McDonald. It could also draw protests, warned Meredith Emmanuel, a California-based spokeswoman for the distributor of "McLibel," another anti-McDonald's documentary that premieres May 20. The film tells the story of Helen Steel and David Morris, environmental activists whom McDonald's sued for leafleting against them in Britain.

McDonald's global success has made it a symbol for people like Steel and Morris who oppose globalization and other perceived evils. But company executives point out that its vastness creates opportunity for people like Hadzisalihovic and Quintana.

Marilyn Wright, the franchisee who operates the 600 N. Clark restaurant, immigrated to the U.S. from Croatia at 16. Today, her company, Wright Management, owns nine McDonald's franchises, including 600 N. Clark.

MCDONALD'S: A TIMELINE
1948
Dick and Mac McDonald open the first McDonald's in San Bernardino, Calif.
1954 Ray Kroc, a restaurant-equipment salesman from Oak Park, visits the San Bernardino McDonald's. Kroc becomes the exclusive national franchise agent for the McDonald brothers.
1955 Kroc opens his first McDonald's in Des Plaines.
1960 McDonald's celebrates its 5th anniversary, opening its 200th restaurant in Knoxville, Tennessee. Annual sales total $37,579,828.
1961 Ray Kroc buys out the McDonald brothers for $2.7 million.
1963 Ronald McDonald makes his debut in Washington, D.C.
1965 McDonald's goes public at $22.50 per share. An investment of $2,250 for 100 shares would total today 74,360 shares worth $2.3 million, thanks to 12 stock splits and one 2 percent stock dividend.
1967 The first international McDonald's restaurants open in Canada and Puerto Rico.
1968 Big Mac added to menu.
1971 Headquarters moves from Chicago to Oak Brook.
1984 Ray Kroc dies on Jan. 14.
2005 McDonald's celebrates 50th Anniversary on April 15 by opening the 50th Anniversary restaurant at 600 N. Clark.

Source: McDonald's Corp.

ALL STAR CREW Among the former McDonald's workers:
Jeff Bezos, chairman and CEO of Amazon.com
Andrew Card, White House chief of staff
Star Jones Reynolds, co-host of "The View"
Heidi Klum, model
Andie McDowell, actress and model
Dan Miller, business editor, Chicago Sun-Times
Tony Stewart, NASCAR driver
Sharon Stone, actress
Shania Twain, singer

Source: McDonald's Corp.  
 
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