Behind the Arches

Our writer takes a sneak peek into the training grounds of McDonald's franchisees: Hamburger University.
Magazine Contributor
11 min read

This story appears in the January 2006 issue of Entrepreneur. Subscribe »

Miomir Ivanovic, 43, likes sizing up the odds-not because he is a gambler, but because he isn't. When it became apparent that his native country, Bosnia, was collapsing into civil war, he decided to stay in America, where he was going to school. If he returned to Bosnia, he felt that odds were, his life would be in danger. When he chose a career, he picked a stable one-civil engineering. And when he decided that he wanted to own a business, he decided on a franchise with a track record of success. In 2004, he set his sights on McDonald's. Odds are, Ivanovic is going to do OK.

Of course, McDonald's likes reducing its odds of failure, too. The most successful quick-service restaurant chain in the world doesn't let just anybody buy a McDonald's restaurant and open for business. Their secret weapon to success isn't the Big Mac's secret sauce. It lies in the training that the company provides to every single franchise owner. McDonald's is McDonald's because of Hamburger University.

That said, driving onto the premises, I was at first a little disappointed. Oh, sure, Hamburger University is a stunning campus, nestled in lush oak forests and situated next to a sunlight-dappled lake full of bass and carp, where Canada geese, mallards and teal ducks make their homes.

It's just that I was half-expecting some of the students to channel their inner Ronald McDonalds or even don polyester uniforms, like in those 1970s TV commercials. I imagined that golden arches might hang over a Hamburger University football stadium.

All kidding aside, Hamburger University's grounds are more picturesque than many actual private and public universities. Acres of trees-walnut, hickory, ash-along with flowers and native shrubs are strewn throughout the 80-acre campus, and white-tailed deer wander near the nature trail and bike path, which are open to the public. Inside the university lobby is a replica of founder Ray Kroc's office, and a mini-museum with a timeline of McDonald's history and its significant role in popular culture. And there is so much artwork at the university and throughout the corporation that McDonald's has its own art curator.

The name "Hamburger University" may suggest a light touch, but the school's ambience and its intensive educational training--many classes are actually college-accredited--indicate a very serious endeavor.

It began with 14 students in the basement of a McDonald's restaurant in Elk Grove Village, Illinois, in 1961, and now the university, which has moved twice since then, educates an average of 5,000 students a year. Most of them are managers or executives at McDonald's, but since franchisees must undergo some of their training at the University, many students are like Ivanovic--dreaming of owning their own businesses.

Hamburger University is located on the grounds of the McDonald's headquarters in the affluent and peaceful suburb of Oak Brook, Illinois. Around the country, there are 22 regional training teams that are considered an extension of Hamburger University, and around the world, McDonald's has six additional Hamburger Universities, in Hong Kong; London; Munich, Germany; São Paulo, Brazil; Sydney, Australia; and Tokyo.

Class Act

It was just a few years ago that this all-American franchise received something of a drubbing in the media for its lackluster sales, diminishing reputation of quality and supersizing of the nation's collective waistline. But arguably, it remained a beloved restaurant with the public, and in the past two years, meals at McDonald's have been happier. A renaissance in management and training seems to have taken place, and sales are up, in part because of an expansion of the menu, including healthier fare like the $2.99 fruit-and-walnut salad.

Point being: McDonald's stores are more popular franchises to own than ever, and because of that, getting a franchise--and getting into Hamburger University--is something akin to being accepted to Harvard, Princeton or Yale. Like at an Ivy League college, the tuition is steep (buying a McDonald's franchise generally requires having a minimum of $200,000 nonborrowed money at your disposal), but the reputation for having studied under the masters generally means high returns on the investment. The average McDonald's brings in $1.9 million in revenue a year, and while most entrepreneurs only have one or two restaurants, it's possible to have several.

"We receive a massive number of applications," says Diana Thomas, Hamburger University's dean, referring to the people wanting and waiting to own a McDonald's franchise. Only about 1 percent are accepted, and since approximately one unit opens somewhere in the world every day, one could make a rough estimate that, annually, about 36,000 applicants worldwide vie to own their own McDonald's.

Thomas has worked for McDonald's in one capacity or another since she was a teenager, and she has seen plenty of changes at Hamburger University--many of which have come in the past few years, since she started her tenure as dean. "We used to have a lot of classrooms that looked like any classroom you'd see at a university," recalls Thomas, who took classes at Hamburger University as a manager and executive, and still participates in classes there. "We'd put a lot of people in a room and teach in a lecture format. But we've changed a lot to meet the needs of our users and to make it more interactive. It's more experiential. We divide the room into small, cubicle-like work areas with the material on flip charts, and [we] do role-playing so everyone can actually demonstrate the roles that they're learning."

Indeed, earlier in the day, I was allowed to observe two classrooms from the translation booths, which are typically used by international visitors in the classroom. If needed, McDonald's has interpreters who can translate into 28 different languages, including Korean, Malay, Portuguese and Swedish.

In a class on business leadership, I set my sights on one of three tables in the room, where four men and one woman, in their 30s to early 50s, were having a heated discussion:

"This is another objective to support the goal."

"We're going to have two months? To complete all this?"

"I think he's saying that the amount of objects we have may not be achievable in three months. I'm just saying what his point is, and I think he's saying that we're biting off more than we can chew."

On several flip charts around them are various mandates. One is titled "Goals," with "to improve commitment survey results from 72 percent to 85 percent" written underneath. Another says "Sales," with the goal being "to increase comp sales by 5 percent." Later, the group changes the number to 8 percent, and then to 13 percent. The students get increasingly animated. Hamburger University professor Mark Collins says, "We've had people get very emotional in the classes. We've seen tears. We've run the gamut."

The objective of this particular weeklong business leadership class, says Hamburger University training manager Wanda Hunter, is for students "to understand the importance of having a business plan, what the components are and their accountability in keeping the business plan alive."

In this class, only one of the students is on the verge of opening a McDonald's--and that's Miomir Ivanovic. Many business professionals besides McDonald's franchisees seek to attend the famed university to improve their business or people skills. "We've had attorneys, engineers, college professors, high-school teachers, barbers and grocery store owners come through here," says Randy Vest, a senior director for U.S. Training, Learning & Development who's in charge of formulating Hamburger University's curriculum.

Ivanovic is in his second week of training at Hamburger University, and it is his final week before he graduates and receives his diploma. Two weeks of training sounds minimal, but that's simply the training received inside the university. To get to this point, Ivanovic had to navigate his way through a matrix of time-consuming steps, including the very first, where for three days he lived on the lowest rung of the McDonald's ladder, making french fries and mopping floors. Ivanovic has been immersed in training at a McDonald's in his home city of Philadelphia as well as at a regional center, which includes working in a kitchen lab that is identical to working behind the counter of an actual McDonald's. Those doing the training are "field fresh," meaning they have been working inside an actual McDonald's on some management level within the past two years or so, says Allison Sindelir, master trainer, who oversees Hamburger University's professors.

In part because of the rigorous training people have to go through to be allowed to buy a McDonald's, this entrepreneurial experience is not for everyone. "It's only for those who are extremely dedicated," warns Thomas. "At the end of the day, these people spend an enormous amount of time preparing to own a McDonald's."

"It's a courtship, and we want to make sure you're absolutely the right fit," agrees Anna Rozenich of McDonald's. "Our franchise agreements are for 20 years, and that's a long time for a relationship. We want to make sure [you] share our passion for the customer."

Vest notes, "If you aren't willing to be hands-on and fully engaged, you're going into the wrong business. We're not looking for investors." In fact, Vest says that if there's any flexibility, it's with financing, not in accepting someone who isn't willing to learn everything they can about the business. "First and foremost, we're interested in talent. If you have talent and passion, then you're probably a pretty good fit."

Higher Education

For Ivanovic, it's a plus that McDonald's is so demanding. When he first came to the U.S. in the late 1980s, he didn't know much about the restaurant, and when he started dating his future wife, Alexandra, who was a field consultant for McDonald's, he was still largely clueless. But as he learned about her work and met McDonald's employees, he was impressed.

"You start to see why McDonald's is one of the leading worldwide corporations," Ivanovic says. "You go into one restaurant and don't see the connections or understand the mechanism behind it, but then you slowly recognize why McDonald's is so big and powerful. They employ 1.6 million people. Engineers have a tendency to think logically, and logically, you have to know there is something big behind this, that you can make the same quality of hamburger in America or in Asia."

Ivanovic had wanted to own his own business for several years. He looked into real estate or possibly opening a business in Europe, but kept coming back to his wife's place of employment. "I tend to think where you should be is where the really successful people are. If I wanted to open a food store on the corner, I wouldn't have all this support, and I know a lot of businesses fail in the first three years."

Ivanovic is certainly right that he'll have a lot of support. Vest says franchise owners needn't stop learning on the job--they can attend the McDonald's worldwide convention, held every other year, as well as local and regional training seminars and workshops. Meanwhile, every seven years, owners are invited to attend a restaurant operations leadership practice course--a weeklong visit to Hamburger University--to catch up on new technologies and evolving practices.

That's what Susan Singleton, 44, did five years ago. Along with her husband, Chris, 54, she owns four McDonald's locations in the Illinois towns of Algonquin, Hampshire, Huntley and Marengo, all of which perform slightly better than the average unit. She returned in 2000 for her third week at Hamburger University, which she says was extremely rewarding. "My advice, when you go, is to thoroughly enjoy everything," says Singleton. "While it's easy to just focus on the exam, that's only a small part of it. I'd really suggest taking in everything that happens to you there, especially with the people you meet and the relationships you make. It's going to be something you refer to and remember for the rest of your McDonald's experience."

Basic Training
Before buying a franchise, make sure it has a quality training program.

After all, if you're expected to learn the language, you'd better have capable instructors. Bob Garrow, professional speaker, leadership trainer and author of Ahoy Mates! Leadership Lessons from Successful Pirates, knows what it takes to get people started on the right foot. Based on his suggestions, we've culled five rules to live by when looking at a franchise training program:

  1. Do what you can to make sure the training content is relevant to what franchise owners experience in their natural environments.
  2. You may hate exams and testing, but you'd better make darn sure that the franchise training program requires some sort of test, because you'll hate being a clueless business owner much more than that test.
  3. The program should be fun.
  4. Two words: interactive learning.
  5. The agenda should contain a variety of learning methods and changes of pace so it holds your attention.
Geoff Williams is a frequent contributor to Entrepreneur magazine and maybe a little-too-frequent visitor at quick-service establishments. One of these days, he intends to sample that fruit-and-walnut salad.

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