McDonald’s began with two brothers who changed how a single California restaurant served hamburgers. The global franchise network associated with Ray Kroc came later. That distinction explains much of the company’s history: one business developed a way to prepare food quickly and consistently; another turned the format into a system that could be reproduced far beyond its original location.
The formula continued to change as the restaurant network expanded. Franchisees introduced products that became national fixtures, international operators adapted the format to new markets, and management periodically reworked how the corporation earned revenue and supported its restaurants.
McDonald’s also faced setbacks that growth alone could not solve, including a historic quarterly loss, leadership upheaval, a withdrawal from Russia and a major food-safety investigation. Its history is a story of building a repeatable business—and repeatedly adjusting that business as its scale and circumstances changed.
A Quick Look at the History of McDonald’s
Company History Summary
McDonald’s traces its restaurant origins to Richard and Maurice McDonald, who opened McDonald’s Bar-B-Q in San Bernardino in 1940 and introduced a streamlined self-service system in 1948. Ray Kroc entered the story in 1954 and established a new phase of franchise expansion through McDonald’s System, Inc. in 1955. The Kroc-led enterprise acquired the brothers’ rights in 1961; McDonald’s Corporation went public in 1965.
Over subsequent decades, the network expanded internationally while franchise operators helped introduce signature menu items and new service channels. Operational problems prompted a 2003 reset, followed by further refranchising and digital initiatives. Today, independent franchisees operate the great majority of the restaurants in its global network.
Company Snapshot
Restaurant origin: 1940, San Bernardino, California; fast-service redesign in 1948.
Original founders: Richard “Dick” McDonald and Maurice “Mac” McDonald.
Franchise expansion: Ray Kroc; McDonald’s System, Inc. opened its Des Plaines, Illinois restaurant in 1955.
Present public company: McDonald’s Corporation (NYSE: MCD); the present Delaware registrant was originally incorporated as Regrub, Inc. in 1964.
Industry and business: Quick-service restaurants; franchising and company-operated restaurants.
Worldwide scale: 45,356 restaurants at December 31, 2025, in more than 100 countries, approximately 95% franchised.
Leadership in October 2026: Chris Kempczinski, Chairman and CEO.
Two Brothers Redesign the Drive-In
In 1940, brothers Richard “Dick” McDonald and Maurice “Mac” McDonald opened McDonald’s Bar-B-Q in San Bernardino, California. Their business was a drive-in with carhop service and a broad menu, rather than the compact fast-service operation later associated with the name.
Eight years later, the brothers changed the format. They closed the restaurant to remodel it and reopened in December 1948 with a restricted menu, self-service ordering and a 15-cent hamburger. The Speedee Service System emphasized a smaller set of products, consistent preparation and serving customers in volume.
The brothers built an operation around repetition rather than a sprawling menu and varied service routines. The change made the concept easier to reproduce in other restaurants. It was an important fast-service development, not the invention of the drive-thru.
The business was still the McDonald brothers’ enterprise when Ray Kroc encountered it in 1954. Kroc was selling Multimixer milkshake machines and saw the San Bernardino operation firsthand. He became the brothers’ franchising agent, setting up a second chapter in the company’s history.
Ray Kroc Turns a Restaurant Format Into a Franchise Network
On April 15, 1955, McDonald’s System, Inc. opened a restaurant in Des Plaines, Illinois, under Ray Kroc’s direction. Although the brothers’ original restaurant was already operating in California, the Des Plaines location marked the beginning of Kroc’s franchise-building enterprise.
A franchise network needed more than a recognizable menu. Operators had to reproduce the service standards in different restaurants. Fred Turner, who joined the business in 1956, became an important figure in restaurant operations and standards, and Hamburger University opened in 1961 as part of the training effort.
In 1961, the Kroc-led McDonald’s business acquired the brothers’ rights for $2.7 million. The original founders no longer controlled the expanding franchise system.
The company’s legal history has a separate starting point. The present McDonald’s Corporation registrant states in its Delaware incorporation record that it was originally incorporated on December 21, 1964, as Regrub, Inc. The original restaurant, McDonald’s System, Inc. and the later corporate registrant belong to the same broader business history, but their founding dates should not be used interchangeably.
McDonald’s Corporation completed its initial public offering on April 21, 1965. In 1967, the network expanded internationally, including restaurant openings in Richmond, British Columbia, and Puerto Rico. Different local operating and franchise entities would increasingly share in the growth of the McDonald’s system.
Franchising also shaped the underlying business economics. Under the conventional arrangements described in McDonald’s modern annual filings, the corporation generally owns or leases restaurant properties and collects franchise-related revenues, while franchisees invest in and operate their individual restaurants. The parent company’s revenue is therefore not the same measure as total customer spending across all McDonald’s restaurants.
How Franchise Operators Helped Shape the Menu and Service
Franchisees played a role beyond operating restaurants. Some developed products that were later adopted across the national system.
Pittsburgh-area owner/operator Jim Delligatti developed the Big Mac, which reached the national menu in 1968. Lou Groen was associated with the Filet-O-Fish, while Herb Peterson developed the Egg McMuffin. These examples show how ideas from local operators could be adopted more widely across the network.
The same pattern applied to a new service channel. On January 24, 1975, licensee David Rich opened the first McDonald’s drive-thru in Sierra Vista, Arizona. The arrangement responded in part to nearby soldiers whose off-base uniform rules created a practical need for service without entering the restaurant. Drive-thrus existed elsewhere beforehand; the Sierra Vista opening was a first for McDonald’s, not a first for the entire restaurant industry.
The menu expanded beyond the original burger-centered offering as well. Chicken McNuggets reached all U.S. McDonald’s restaurants in 1983. Each such addition widened what a restaurant built around the brothers’ simplified service model could offer, while placing new demands on consistency across the network.
International expansion created a different test: operating the same recognizable concept across markets with different customers and local business partners. The opening of a McDonald’s restaurant at Moscow’s Pushkin Square on January 31, 1990, became a notable symbol of the brand’s reach. That market entry would acquire a very different meaning when the corporation exited Russia decades later.
Growth Meets an Operating Problem
Restaurant expansion could increase McDonald’s reach without ensuring that existing operations were performing well. By the early 2000s, the company faced problems involving restaurant execution, service and the costs of its large network.
In the fourth quarter of 2002, McDonald’s Corporation recorded its first reported quarterly net loss, approximately $343.8 million. The period included about $810 million in restaurant-closing, restructuring and other charges. It was a quarterly loss, not a declaration that the corporation had posted its first annual loss, and the write-offs were important to the reported result.
CEO Jim Cantalupo’s 2003 Plan to Win placed greater attention on how the existing business operated. In an October 29 statement, he described the near-term focus directly: “Our first priority is to improve restaurant operations”. Management emphasized food and service consistency, relevant marketing, capital discipline and better returns.
The operating reset placed greater weight on existing restaurants rather than expansion alone. Cantalupo’s plan made service standards, restaurant performance and capital discipline central management priorities.
A New Turnaround: More Franchising, More Ways to Order
A decade later, McDonald’s management cited growth pressures and changing customer expectations as reasons to reassess the business. In May 2015, CEO Steve Easterbrook announced a restructuring of McDonald’s Corporation and an accelerated program to transfer company-operated restaurants to franchisees. At the time, roughly 81% of the system was franchised.
Management initially targeted 3,500 restaurant transfers by 2018, aiming to increase the franchised share to approximately 90%. In November 2015, it raised the transfer target to 4,000 and set a longer-term goal of about 95% franchised.
That shift changed the balance between operating restaurants directly and overseeing a network of independent operators. It also made franchisee economics, restaurant standards and customer experience increasingly interconnected parts of the corporate strategy.
Under the 2017 Velocity Growth Plan, management paired the ownership shift with initiatives involving digital ordering, delivery and restaurant modernization under the “Experience of the Future” program. The purpose was to improve how customers interacted with restaurants while the corporation continued moving toward a more heavily franchised system.
One major regional transaction showed that international scale did not always mean outright parent-company ownership. In 2017, McDonald’s and investors associated with CITIC and Carlyle formed a strategic partnership for restaurant operations in mainland China and Hong Kong. The original disclosed ownership was 52% for the CITIC side, 28% for Carlyle and 20% for McDonald’s Corporation.
McDonald’s announced in 2023 that it would acquire Carlyle’s interest, moving toward a 48% McDonald’s stake, while the CITIC Capital consortium retained 52% and control. Subsequent investor disclosures maintained this distinction. The McDonald’s brand continued in the market, but the China operating partnership was not a wholly owned subsidiary of the U.S. parent.
Leadership Change and a Series of External Shocks
The company’s strategic changes unfolded alongside governance and operating problems. In November 2019, McDonald’s board removed CEO Steve Easterbrook after determining that he violated company policy in connection with a consensual relationship with an employee. The board appointed Chris Kempczinski as his successor.
McDonald’s Corporation later sued Easterbrook. In December 2021, it announced a settlement under which the former CEO returned equity awards and cash valued at more than $105 million. The litigation ended in a settlement, not a trial judgment on the company’s allegations.
Geopolitical developments also changed the footprint of the restaurant network. Following Russia’s 2022 invasion of Ukraine, McDonald’s Corporation suspended operations in Russia and announced plans to leave the market. It completed the sale of its Russian restaurant business in June 2022. The departure covered more than 850 restaurants, and the company’s second-quarter filing recorded a charge of roughly $1.2 billion associated with the exit.
The Russian sale brought a striking reversal to the company’s earlier international story: the market symbolized by the 1990 Moscow opening was no longer part of the McDonald’s corporate system.
The distinction between franchisee actions and parent-company actions became particularly important during the Gaza war. Local Israeli franchisee Alonyal Ltd’s conduct, including meal donations, became part of a broader boycott controversy affecting the brand in some markets. In April 2024, McDonald’s Corporation agreed to acquire Alonyal’s 225 Israeli restaurants; the company’s later annual report recorded the acquisition. Actions taken earlier by the independent operator were not automatically actions of McDonald’s Corporation.
In the United States, a 2024 E. coli outbreak brought a separate challenge involving restaurant supply chains. The U.S. Centers for Disease Control and Prevention ultimately reported 104 cases across 14 states, including 34 hospitalizations and one death. Investigators identified fresh slivered onions served at McDonald’s as the likely source. The CDC declared the outbreak over in December 2024.
These episodes differed in cause and scope. Together they underline an operational reality of a far-flung restaurant system: corporate oversight, local operators, suppliers and outside events can affect the same brand even when the responsible entities and circumstances are different.
From Restaurant Network to Digital and Development Platform
Under Chris Kempczinski, McDonald’s Corporation launched Accelerating the Arches in November 2020. The strategy focused on marketing, the core menu and digital, delivery and drive-thru channels. Management later added restaurant development as another area of emphasis, bringing technology investments and new locations into a more expansive growth program.
In December 2023, McDonald’s set out additional development, loyalty and technology objectives, including a target of 50,000 restaurants by 2027. That number was a target, not a completed store count.
The size and structure of the existing system matter to understanding these plans. At December 31, 2025, McDonald’s had 45,356 restaurants worldwide and approximately 95% were franchised. In its 2025 annual report, the corporation recorded about $26.885 billion in consolidated revenue, compared with approximately $139.4 billion in systemwide sales. The larger figure represents sales across the restaurant system, not revenue earned by the parent company itself.
By the second quarter of 2026, the corporation reported global comparable sales growth of 1.3%, including 0.8% growth in the United States. Management also reported nearly 220 million active loyalty users over a 90-day measure across 70 loyalty markets. That loyalty statistic reflects the company’s specified measurement, rather than a count of every customer in the world.
On September 23, 2026, McDonald’s Corporation announced McDonald’s > NEXT, a strategy covering menu appeal, consumer relationships, restaurant efficiency, and employee experience and hospitality. Management also introduced an initiative called Make It Golden.
McDonald’s announced approximately $8.5 billion in rent and capital partnering support through 2036, with about $5 billion scheduled through 2030. Management also outlined 2030 operating-margin and efficiency targets. Those figures describe intended investment and performance, not money already spent or results already achieved.
The Business Behind the Golden Arches
From the brothers’ limited-menu restaurant to Kroc’s franchise network, McDonald’s developed through changes in service, ownership and operations. Independent restaurant operators contributed menu ideas, while successive corporate management teams reworked franchising, capital allocation and customer ordering channels.
By October 2026, the model depended overwhelmingly on independent franchisees, alongside a smaller company-operated estate and selected joint ventures. The newly announced NEXT strategy set out further changes, but its investment and performance targets remained plans rather than completed results.
Timeline
These milestones trace the restaurant’s origins, the growth of the franchising system and the most consequential changes in the modern business.
1940
Richard and Maurice McDonald open McDonald’s Bar-B-Q in San Bernardino, California.
1948
The brothers reopen with the Speedee Service System, a limited menu and self-service format.
1954–1955
Ray Kroc visits the brothers’ restaurant in 1954; McDonald’s System, Inc. opens the Des Plaines restaurant on April 15, 1955.
1961
The Kroc-led McDonald’s business acquires the brothers’ rights for $2.7 million.
1964–1965
The present corporate registrant is incorporated as Regrub, Inc. in December 1964. McDonald’s Corporation conducts its IPO on April 21, 1965.
1967–1968
McDonald’s expands to Canada and Puerto Rico in 1967. The franchisee-created Big Mac joins the national menu in 1968.
1975
Franchisee David Rich opens the first McDonald’s drive-thru in Sierra Vista, Arizona.
1983–1990
Chicken McNuggets are available throughout the U.S. system in 1983; the first Moscow restaurant opens in 1990.
2002–2003
McDonald’s Corporation reports its first quarterly net loss for the fourth quarter of 2002. CEO Jim Cantalupo introduces the Plan to Win operating reset in 2003.
2015–2017
CEO Steve Easterbrook begins a restructuring and refranchising effort. Management later unveils the Velocity Growth Plan; McDonald’s enters a China strategic partnership with CITIC-related investors and Carlyle.
2019–2020
Chris Kempczinski succeeds Easterbrook as CEO. McDonald’s launches Accelerating the Arches.
2022
McDonald’s Corporation completes the sale of its Russian restaurant business in June.
2023–2024
McDonald’s moves toward a 48% minority stake in the China partnership and acquires its former Israeli franchisee’s restaurant business. The CDC concludes its 2024 E. coli outbreak investigation.
2025
The global restaurant network finishes the year with the vast majority of locations operated by franchisees.
September 2026
McDonald’s Corporation announces the NEXT strategy and associated long-range investment and efficiency targets.
FAQs
Question: Who founded McDonald’s—Richard and Maurice McDonald or Ray Kroc?
Answer: Richard “Dick” McDonald and Maurice “Mac” McDonald founded the original restaurant in 1940 and developed its fast-service format in 1948. Ray Kroc later built the franchising network beginning in 1955.
Question: Why are 1940, 1955 and 1964 all associated with McDonald’s beginnings?
Answer: The brothers’ restaurant opened in 1940; the Kroc-led McDonald’s System, Inc. opened its Des Plaines location in 1955; and the present Delaware corporate registrant was originally incorporated as Regrub, Inc. in 1964. These dates describe different parts of the company’s history, not three dates for the same event.
Question: Does McDonald’s Corporation operate every McDonald’s restaurant?
Answer: No. Independent franchisees operate the vast majority of McDonald’s restaurants worldwide. The corporation operates a much smaller share and earns revenue from franchise arrangements.
Question: Who created the Big Mac?
Answer: Pittsburgh-area McDonald’s owner/operator Jim Delligatti developed the Big Mac. The sandwich joined the McDonald’s national menu in 1968.
Question: Does McDonald’s Corporation fully own its China operations?
Answer: No. After the announced purchase of Carlyle’s interest, disclosures describe McDonald’s Corporation with a 48% minority interest and the CITIC Capital consortium with a controlling 52% in the China partnership. The local operating venture is distinct from the U.S. parent.
Question: Why did McDonald’s leave Russia?
Answer: Following Russia’s 2022 invasion of Ukraine, McDonald’s Corporation suspended operations and announced its withdrawal, citing the resulting operating conditions. The corporation completed the sale of its Russian restaurant business in June 2022.
Interviews & Firsthand Resources
Jim Cantalupo’s 2003 Plan to Win Statement
In a statement filed with the SEC, then-CEO Jim Cantalupo explained the operating priorities behind McDonald’s 2003 reset. It offers a firsthand view of how management described service, restaurant performance and capital discipline after the company’s first quarterly loss. The document is an executive statement, not an independent assessment of the plan’s eventual effects.
Steve Easterbrook’s 2015 Turnaround Announcement
The original announcement outlines the organizational changes and refranchising targets that marked the beginning of Easterbrook’s restructuring. It helps distinguish what management proposed at the time from the system’s later ownership mix. The resource is a corporate announcement rather than an interview.
Management’s 2026 NEXT Investor Update
This SEC-filed investor update sets out the company’s current strategic priorities and planned franchisee support. It is useful for understanding the investment and efficiency objectives discussed by management in September 2026. The forecasts are management targets, not historical outcomes.
Further Reading
- Golden Arches East: McDonald’s in East Asia, edited by James L. Watson — a scholarly collection on the brand’s international adaptation.
Sources
- McDonald’s Corporation: McDonald’s History, Stock Information, First McDonald’s Drive-Thru.
- McDonald’s Canada: Our History.
- Smithsonian Magazine: Taking Stock of 75 Years of McDonald’s.
- U.S. Securities and Exchange Commission / McDonald’s Corporation: Restated Certificate of Incorporation, 2025 Annual Report / Form 10-K, McDonald’s Plan to Win (2003), Second-Quarter 2022 Form 10-Q, 2026 NEXT Investor Update.
- Associated Press (via CBS News): McDeficit for McDonald’s.
- McDonald’s Corporation — Turnaround and Growth Announcements: 2015 Initial Turnaround Plan, 2015 Turnaround Progress and Targets, 2017 Global Growth Plan, 2020 Accelerating the Arches, 2023 Development, Loyalty and Technology Targets.
- CITIC, Carlyle and McDonald’s: 2017 China Strategic Partnership Announcement; McDonald’s Corporation: 2023 China Stake Announcement; CITIC Capital: 2024 Investment Update.
- McDonald’s Corporation — Leadership and Legal Announcements: 2019 Leadership Transition, 2021 Easterbrook Settlement.
- McDonald’s Corporation: 2022 Russia Exit Announcement, Second-Quarter 2026 Results.
- Reuters: 2024 Israel Franchise Acquisition Announcement.
- U.S. Centers for Disease Control and Prevention: 2024 E. coli Outbreak Investigation.