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“The Founder” Shows the Value of Trademarks for Growing Businesses

In the new film “The Founder” Michael Keaton’s Ray Kroc takes the concept for an efficient, high quality low cost diner with a limited menu and, through his relentless drive, expands it into the world’s biggest restaurant chain. In franchising the original concept developed by the brothers Dick and Mac McDonald, Kroc created the world’s most successful — and lucrative — franchise. (Full disclosure: I worked at McDonald’s in high school).

The film shows how Kroc obsessed over the “McDonald’s” name and the concept for the iconic golden arches that the brothers developed. The name and the golden arches logo have both become famous trademarks, projecting and protecting the McDonald’s brand throughout the world.  Through persistence and a far-sighted real estate financing structure (and, the film suggests, some tricky lawyering), Kroc took control of the McDonald’s name and golden arches logo without future obligations to the company’s founders.

The value of the McDonald’s word trademark alone was estimated at over $30 billion in 2002.  Today, McDonald’s ranks as the ninth most valuable brand in the world, with a brand value of over $39 billion.   Through consistent marketing, careful franchisee selection, and brand protection, the McDonald’s name has strong consumer recognition.  The trademarks that Kroc procured from the McDonald brothers were essential to the growth and success of the company.

Business owners seeking to replicate Kroc’s success, or even those seeking more modest expansion beyond their own locale, should seek to protect their trademarks.  Otherwise, they could end up like the McDonald brothers, unable to use their own name for their restaurant.

 


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