Ray Kroc met Harry J. Sonneborn

Ray Kroc's meeting with Harry J. Sonneborn marked a pivotal moment in the expansion strategy of McDonald's. Sonneborn, who had previously served as vice president of finance for Tastee-Freez, proposed a model that would significantly enhance the financial structure of Kroc's franchise operations. The core of Sonneborn's idea was to acquire ownership of the real estate on which McDonald's franchises would be established. This led to the formation of Franchise Realty Corp, a separate entity dedicated to managing McDonald's real estate assets. The company was responsible for signing leases and securing mortgages for both land and buildings, which allowed McDonald's to pass these costs onto franchisees with a markup ranging from 20% to 40%. This innovative approach not only reduced the initial financial burden on franchisees, who faced a lower deposit requirement of $950, but also established a sustainable revenue model for the corporation. The implementation of the 'Sonneborn model' has had lasting implications