McDonald's owner-operators know you need ‘ketchup in your veins'

Phalen was working a part-time job at McDonald’s in Niles, Ill., in 1961, when McDonald’s founder Ray Kroc and top executive Fred Turner came into the store.

“There were no dining rooms back then, so I served them and later heard them talking to the owner in the storage area,” said Phalen.

They called Phalen back and asked if he’d ever thought of making McDonald’s his career. “I told them I didn’t think I could afford them. I was making $2 an hour at the time,” he said.

But they talked of management opportunities, so he signed on. He spent more than 20 years with the corporation, working his way up to executive vice president of U.S. operations, before leaving his corporate role and purchasing two McDonald’s restaurants in 1982.

“I’d had a lot of responsibility as a corporate executive, but not the stress of having to make payroll every week,” said Phalen. “As an owner-operator, I have more latitude to be innovative and to contribute to changes in the company.”

Owners have often suggested the menu changes and promotions that keep the chain fresh. Phalen was instrumental in putting Teenie Beanie Babies in Happy Meals.

“An owner-operator in Cincinnati created the Filet-O-Fish sandwich [in 1962] because he was in a Catholic neighborhood and saw his business slump every Friday,” said Phalen.

It’s still the favorite sandwich of Justice, who discovered McDonald's in 1959. “I was working at a Zesto [an ice cream chain] in Greensboro, N.C., when a friend told me about this new restaurant that had customers lined up from early morning till late at night,” said Justice.

He went through Hamburger University, McDonald’s global training center for managers and owners. He’s been to so many classes, he jokes that they should put his name on the door, but maintains that being in the restaurant every day is the best teacher.

He bought his first stores in Atlanta in 1965 with a partner at a cost of $100,000 each. They put down 30 percent and got loans for the balance.

“It costs considerably more these days,” he said. “They’re bigger and have more equipment. I paid $1.4 million for my last one.”

At one time, Justice owned 15 stores, but has sold all but two in Morrow and Stockbridge.

“At 77, I should be retired, but it’s been fun and an excellent career. I don’t know any other business you can enter with no degree, get excellent training, put your arms and legs and heart into it, and expand your prospects so well,” he said.

Through a corporate spouse training program, his wife is now his business partner.

He credits his success to being a hands-on manager who knows his customers and supports his community through many charitable ventures.

“We’re really in the people business; anyone can cook a hamburger,” said Justice.

He recently remodeled his Morrow store and installed a toddler zone with jungle play features for ages 4 and under. He could have put the money into more seating, but he knew the expectations of his guests. Boosted by visits of young moms with kids, sales immediately increased.

He believes his meals offer good value and that the $1 menu fits the needs of today’s economy. “The company has seen continuous months of positive sales numbers since 2008, despite the recession,” he said.

“When you’ve got a good product, you can work it, and McDonald’s has always done the research to make their products and equipment better.” Remembering the manual work of filtering the shortening in fryers, he’s a fan of the new models that filter automatically.

With so much competition, you have to run hard to stay innovative, said Owens, who started as a crew employee in 1966. He worked his way through college and oversaw site selection and licensing in 10 Western states where the first restaurants could be 1,650 miles apart.

“Working out West was a phenomenal experience. In retrospect, I should have paid them to let me do it,” said Owens.

“I didn’t grow up with a lot of money -- that’s putting it mildly -- but I had read Ray Kroc’s biography and I knew when I started, I wanted to own a McDonald’s restaurant. Along the way, I had wonderful company mentors who said, ‘Yes, you can.’”

He and his wife, Jan, now own eight restaurants in Cobb, Paulding and Cherokee counties.

“In 2002, the company embraced collaborative leadership with their franchisees, and we’ve served on the national leadership council for menu [development],” said Owens.

He’s watched the menu diversify with more nutritious options; customers pay by credit card; and owners direct-deposit employee checks to credit cards -- all new ideas in the past few years.

“To stay competitive and gain market share with so much competition, you have to listen to your guests. They’ll tell you where you need to go,” he said. “I think the numbers show that we’ve done a pretty good job of that, and we’ll continue to be aggressive.”

One thing that has not changed is the company’s dedication to community service. “A part of every french fry and Happy Meal we sell goes to support the Ronald McDonald House Charities, and my wife serves on the board,” said Owens.

Although franchises cost more, due to high electronic, equipment and furniture costs, the company offers great training and support. Owens said he still believes that becoming a McDonald’s owner-operator is a great investment for someone who loves the restaurant business and has good people skills.

“But you need to know what you’re getting into," said Phalen. "Work in a store for a few months, talk to other owner-operators and, then, if you’re still excited, go for it.”