Dan Bilzerian’s Empire Just Collapsed — He Lost Everything

Dan Bilzerian’s Empire Just Collapsed — He Lost Everything - YouTube

Transcripts:

Dan Bilzerian just got kicked off the board of his own company. The SEC is investigating his father for orchestrating millions in fraud through that same company. And Dan's response, launching a discount Andrew Tate coaching program called Sigma Society while suing his dad for $50 million. This is the guy who built an empire on Instagram by convincing millions of teenage boys he was living the ultimate life.

 30 million followers watched him party on yachts with models, throw cash around like confetti, and act like he had infinite money from crushing billionaires at poker. If you asked a 16-year-old kid, "Hey man, if you had 100 million bucks, what would you do?" Oh, dude, I just have around me all the time. I'd be jet skiing. I'd be driving around Ferraris and private jets.

 You're living like a life that doesn't even seem real. Except none of it was real. the mansion rented, the models paid by his company, the followers, $26,000 bought fake ones. Even the money he claimed came from poker. That's where it gets really ugly, because the moment someone actually looked at the receipts, the entire thing collapsed.

 And what's underneath is so much worse than anyone expected. Dan Bilzerian wasn't always the musclebound, bearded playboy you see today. He was a rich kid from Florida whose dad happened to be a wizard on Wall Street. At least that's what Paul Bilzerian wanted everyone to think. To give this context, really successful businessman and then the newspaper headlines or and I think this is like the late '8s.

 Uh he's indicted for like tax and security fraud. Yeah. Yeah. I don't know all the charges. It was like Yeah. some 13D violations, stock parking. It was like him and Michael Milin and they were like the, you know, the guys that were being made an example of. And Paul wasn't salvaging companies. He was running corporate takeovers, staging stock manipulation schemes, and stealing everything he could before anyone noticed. In 1989, the hammer dropped.

Four years in prison, 62 million in fines. He served one year, got out, and has been dodging a civil judgment from the SEC ever since. That tab now sits at over $180 million. He's never paid a scent. We were uh we're driving into school and he just Yeah. on the way into school. Like he never drove me to school.

 So I was like, "Oh, this kind of odd." And he just, "Yeah, I'm going to be going away." And I was like, "What do you mean?" He's like, "Oh, well, you know, we didn't get this appeal." And and the whole time he had been telling me like, you know, "Oh, you know, I'm I'm not going to jail.

" Cuz it was, you know, in the newspapers, the kids were asking me, so I'd ask him and he's like, "Oh, no, definitely not." He was always like this crazy like eternal optimist. Dan watched his dad go to prison. Watched the family name get dragged through every newspaper. watched everyone at school find out his father was a con artist.

 And somewhere in that mess, he learned a valuable lesson. If you're rich and shameless enough, you can sell people anything. Because here's the thing, despite the fraud, despite the prison time, despite owing the government close to $200 million, Paul Bilzerian still managed to set up a trust fund for Dan and his brother Brian.

 $12 million ready and waiting for Dan the moment he turned 17. That's the foundation. And that's where the self-made poker king story actually starts with 12 million in dirty money sitting in an account waiting for him to access it. But Dan couldn't just admit that. He needed a better story. He needed something that sounded like he earned it.

 So he built a myth around poker. Highstakes games with billionaires. 54 million from one guy, 10 million from another. Numbers so big they sound impressive but impossible to verify. And when people started asking questions about where the money really came from, Dan had his answer ready. I gave it all back. I gave it to my brother. Why? Uh I just I don't know.

 I didn't need it. Didn't want it. Didn't care. How satisfying was it to you to like know you had the ability to do that? Oh, was I didn't really think about it to be. It was like not a big deal. I just I don't know. I was like a weird person. I never wanted something from somebody um without being able to kind of reciprocate, I guess.

 So, my dad had like lost me some money on some deals, so I just, you know, like I I took I took like a little bit from that and gave the rest away. He gave it all back. Except actually he took a little. Which version is it, Dan? Because in the span of 30 seconds, he just told two completely different stories. The timeline gives it away.

Dan's Instagram empire exploded in 2011. the guns, the girls, the private jets, all of it. And 2011 just happens to be the exact year Dan and his brother got full access to their trust funds. But sure, it was all poker winnings. Dan needed everyone to believe the poker story. Because if people knew he inherited millions from his criminal father, the whole fantasy falls apart.

You can't be the self-made Playboy king if daddy's fraud money paid for everything. So he went on podcasts and told increasingly absurd stories about crushing billionaires in private games. Numbers that kept getting bigger every time he opened his mouth. The most you've ever won or lost? Um there's I think it was like 12.

8, but it was over a period of three games we just kind of won or lost. I won. Yeah. Like I played and then we just left the money on the table and you know we played again and left the money on the table and Yeah. It was it was a pretty crazy one. And I'll never forget it cuz I was sitting there and I had I was I think I had I was sitting with like over 18 million cuz I had bought in for some money and I was just I was up the 12 but I had you know other money that I bought in 12 million in one stretch sitting at the table with $18

million in front of him playing heads up no limit with $25,000 blinds. That's the story he told one place. Then he went on Joe Rogan and the number magically tripled. And I beat one guy for like 54 million and then you know I beat another guy for like 10, you So there's like, you know, some pretty big Jesus Christ.

Yeah. Like, you know what I'm saying? So, I was like, there are some pretty big, you know, wins there. And uh and I was single and I was just like, you know what? It I'm just going to kind of like do bucket list [ __ ] Like whatever, like whatever I wanted to do when I was a kid, I'm just going toinging do it, you know? And I just did.

54 million from one guy, another 10 from someone else. just casual 9-f figureure poker earnings that somehow have zero documentation, zero witnesses willing to go on record, and zero proof they ever happened. But Dan didn't need proof. He had Instagram, and Instagram doesn't care about receipts when the photos look good enough.

 That's the genius of the con. He sold a lifestyle to an audience young enough to not ask questions. 16-year-old kids don't know how poker works at that level. They don't know that games with those stakes would have paper trails, tax implications, witnesses. They just see the jets and the guns and the girls and think that's what winning looks like.

 And for years, it worked. Dan became the self-proclaimed king of Instagram. 30 million followers, sponsorship deals, movie cameos. The whole world bought into the fantasy of Dan Bilzerian, the guy who got rich gambling and decided to live like a teenage boy's fever dream. Um, now it seems normal, as crazy as that sounds.

 Um, been doing it for a while. Normal. He called it normal. like everyone just stumbles into $50 million at a poker table and starts renting yachts. But the cracks were always there. People in the poker world kept questioning his story. Highstakes players who actually knew the game said the numbers didn't make sense. That wins like that would be legendary, talked about, documented, and nobody had ever heard of Dan Bilzerian taking anyone for 50 million.

 The trust fund timeline kept haunting him. The fact that his rise to fame perfectly coincided with accessing his inheritance. The way his father's financial crimes kept lurking in the background like a neon sign everyone was trying to ignore. And then Ignite happened. And suddenly nobody could ignore it anymore.

 Ignite was supposed to be Dan's big move into legitimate business. A CBD and vape company trading on his brand, the lifestyle, the image, the aspirational garbage he'd been selling for years now in product form. And for a while, it looked like it might actually work. Then the company went public. And the second real money got involved, the second actual investors started asking questions, everything unraveled.

 Curtis Hefernon, Ignite's former president, filed a lawsuit in July 2020. And the details in that filing didn't just damage Dan's reputation, they obliterated it. The lawsuit alleged that Ignite burned through cash, paying for Dan's personal playground. 25 million from share proceeds, another 20 million from convertible debt.

 And where did it go? Not into building the business. Into funding the exact lifestyle Dan claimed he paid for himself. The mansion everyone thought he bought for $65 million. I've been inside some of the most incredible mansions in LA. But this $31,000 ft behemoth in Bair is one of the most outrageous homes I've ever been invited to see.

 Yes, that's a 12t waterfall cascading into the infinity pool. and a giant outdoor gym on the roof. He reportedly paid a mind-boggling $65 million for this mega mansion. And he invited me over to check it out. Rented. He rented it. And according to the lawsuit, Ignite was helping foot the bill.

 The models Dan swore he never paid to show up. Pay these girls to come. No. Okay, so that's the big misconception, right? I'm addressing that on my app. Paid. Ignite covered travel expenses for models. The company was literally funding his Instagram content while Dan went on podcasts lying about it. The followers $26,000 spent buying fake Instagram followers.

 The guy selling authenticity was purchasing his own social proof. But it gets worse because the lawsuit didn't just expose the lifestyle as fake. It revealed that Dan was treating Ignite like his personal ATM. 75,000 on a paintball field. Hundreds of thousands on yacht rentals. millions in expenses that had nothing to do with building a business and everything to do with maintaining the illusion.

You were using the company as your personal piggy bank and they flagged nearly million dollars of, you know, expenses. So this was stuff like yacht rental, London trip, Stars War set, bed frame, paintball field, vault. In Dan's defense, it was all branding. So a lot of the stuff that he named, um, I actually paid for.

 So the yacht, I mean, man, that was like branding. I mean, we had the goats go front and center in a 300T yacht. And I think the yacht rental was like over a million bucks. And I, you know, paid for, I want to say 600ish of it. I mean, Ignite paid for 400. Ignite paid for $400,000 of a yacht rental so Dan could throw a party and call it marketing.

 He's admitting it right there. The company paid for his lifestyle and he's defending it as a business expense. I mean, you know, 300 foot yacht with 30 super hot chicks, it's like, you know, life aspirational stuff. And that was kind of the brand that I was building was a lifestyle brand. So to me, it was like, man, that made a lot of noise.

A lifestyle brand. That's what he called it. As if burning investor money on yachts and models was somehow a legitimate business strategy. The lawsuit kept going. It alleged that the company lost $50 million. That Dan's father, Paul, was secretly running operations behind the scenes. The same father currently dodging a $180 million judgment from the SEC.

 the same father who went to prison for corporate fraud. That guy was allegedly pulling strings at Ignite while Dan played pretend CEO on Instagram. And investors started realizing they'd been sold the same con Dan had been running on his followers for years. The lifestyle wasn't real. The success wasn't real. It was all smoke and mirrors funded by other people's money.

 And that's exactly what happened. The kids who worshiped Dan in 2013 were adults by 2020. And adults ask questions. Adults understand that renting a mansion and calling it yours is called fraud. That paying models and claiming they showed up organically is called lying. That using company funds for personal expenses is called embezzlement. Dan tried to spin it.

 Went on podcast claiming the media was twisting the story. That the lawsuit was nonsense. That he was still rich and everything was fine, but the documents were public, the numbers were there, and once the internet gets the receipts, there's no coming back. The self-made poker king was a trust fund kid. The organic lifestyle was purchased with investor money. The girls were paid.

 The mansion was rented. The followers were bought. Everything Dan Bilzerian claimed to be was a fabrication. And now everyone knew it. When your entire brand collapses because people figured out you're a fraud, you've got two options. Disappear and hope everyone forgets. Or reinvent yourself as something else and pray it sticks.

 Dan chose option two and somehow managed to make things even worse. First came the lifestyle change. The guy who once bragged about sleeping with nine women in one day suddenly became a reformed hedenist preaching about monogamy and self-improvement. Well, I think I took hedonism to the end of the earth and I just realized that it didn't bring me happiness.

 So, I started focusing on things that I like to do and did less of that. I read that you were your peak with the women for example. If you only slept with two women a day, you thought that was a disappointing off day and now you're down to just one woman. That that's a pretty dramatic shift in your lifestyle, Dan. Yeah, I mean, it was up to nine at one day at one point.

 It was just, you know, it was a lot. I think a lot of that is probably fueled by insecurity from high school, not getting as many women as I wanted. The party's over. Dan found meaning. He's a changed man. Except nobody was buying the redemption arc from a guy who just got exposed for lying about everything.

 So, he needed a new angle, something that would get attention, something controversial enough to cut through the noise of everyone calling him a fraud. He landed on Israel and went full conspiracy theorist. I don't like a religion that says that they're better than other people. And I Well, you do. You obviously do. It's blatant.

 No one watching this will draw any other conclusion. I'm staggered about how brazen you've been. Yeah. I mean, I I don't I don't like it when people think they're better than other people. And you see that in Israel and they're acting like that and they're treating Palestinians like secondass citizens. They're treating them like subhuman beasts and it sells that in their Talmud.

Dan wasn't just criticizing Israeli policy or the genocide, which would have been reasonable. He went straight into religious conspiracy territory, claiming the Talmud says non-Jews are subhuman, talking about mass murders of Christians, spouting talking points, lifted conspiracy theorists, and the media ate it up because controversy gets clicks.

 Suddenly, Dan was back on podcasts, back in headlines, getting the attention he desperately needed now that nobody cared about his party lifestyle anymore. You could be horrified. I mean, I was horrified to find that they mass murdered Christians. I was horrified to learn the things that they teach in the Talmood.

 I was horrified that they think that Jesus is burning and [ __ ] in hell. This is the guy who couldn't run a CBD company, who got exposed for living a fake life funded by investor money, and now he's positioning himself as some kind of geopolitical truth teller. FBI bad, Israel bad. Like we just take these like blanket statements when in reality we don't even exactly know what the relationship is.

 Like I hear all these people like online and and please believe they are not geopolitical experts at all. They usually yell at Only Fans, girls. And now they're telling me like exactly what happens in the world geopolitically. Like they've become like if you're a guy used to throw parties and play poker, now you know really what the truth is in the world.

Andrew Schultz nailed it. Dan went from throwing parties to acting like he cracked the code on global politics. And his new fan base of conspiracy theorists were thrilled to finally have a rich guy validating their conspiracies. But Dan didn't care because the pivot worked. He was back in interviews, back getting attention, back feeling relevant.

 Dan thought getting kicked off Ignite's board was rock bottom. Turns out it was just the beginning. In late 2024, the SEC filed a complaint against Ignite. The allegations. $5 million in fabricated sales. Fake invoices for vape pens that were never ordered, never shipped, never existed. All designed to inflate the company's fourth quarter 2020 results and make it look profitable when it was bleeding cash.

 And who orchestrated the scheme? Paul Bilzerian, Dan's father. The guy who went to prison for stock fraud in the 80s. The guy who still owes the government $180 million. The guy who was allegedly running Ignite behind the scenes the entire time. The SEC's complaint laid it out. Paul controlled Ignite's finances and operations.

 Meaning, while Dan was on Instagram pretending to be CEO, his convicted fraudster father was cooking the books. Here's the wild part. Dan isn't named in the SEC complaint. Not once. Which raises an obvious question. Did Dan flip on his own father? Because 2 weeks after the SEC announcement, Dan filed a lawsuit against Paul Bilzerian for $50 million.

 The lawsuit claims Paul pushed Dan out of Ignite through a series of unlawful acts. That Ignite is still using Dan's name and likeness without permission. That Paul forced Dan to sign a non-compete clause that's illegal under California law, blocking him from starting a competing cannabis business. Nine claims total, copyright infringement, deceptive trade practices.

Dan wants financial relief and he wants it from the man who raised him. The same father he watched go to prison as a kid. The same father whose trust fund money launched his entire fake empire. Dan is now suing him for 50 million while the SEC investigates Paul for fraud through the company Danfronted.

 It's almost poetic. The cycle repeating itself. Father and son both embroiled in business scandals. Both facing allegations of defrauding investors. Except this time Dan's trying to distance himself by pointing the finger at Daddy. But even that move reeks of desperation because while Dan's fighting legal battles and claiming he's the victim, he's simultaneously launching another grift. The Sigma Society.

 Dan's new coaching program for men who need help with women, money, and life. Because if there's anyone qualified to teach success, it's the guy who just got exposed for faking his entire lifestyle and is currently suing his father. Um, Sigma Society is the is the guy thing to help them out, give them like the road map and help them with just the mistakes that they're making and the bad road map.

 I mean, like I said, I think they have a road map that has Canada in the south and they're, you know, going south. They're trying to get to Canada and it's not going to happen. So, I'm going to give them a correct map. A correct map from Dan Bilzerian, the guy whose map led to investor lawsuits, SEC investigations, and getting kicked off his own company board.

 And the advice he's selling, act as if you belong. Act as if you've talked to a bunch of hot girls. If you look at a girl like you don't need her, and you look at her like, you know, maybe she has chlamydia. If you have something cool in your room, tag her, show her. I remember one time I asked a girl, she wanted to go, she's like, "Yeah.

" And then you started hooking and she was like, "Where's the weed?" I was like, "Oh, I don't even have any weed." My buddy were having a conversation the other day and like he was like, "I think it's I I I I was arguing that I think you have a lower chance of getting a serious rejection if you put a girl's hand on your dick than if you go for a kiss.

" That's what he's teaching. Lie to women, manipulate them, grab them without consent, and call it confidence. This is the guy rebranding himself as a men's coach. And people looked into the Sigma Society website. The booking system claims the next available slot is months away, sold out, in demand.

 Except if you manipulate the URL, you can book for tomorrow. They're faking scarcity, creating artificial demand to pressure people into signing up. The same playbook Dan used with Ignite. The same playbook his father used on Wall Street. Manufacture an illusion. Sell it to people who don't know better and cash out before anyone realizes it's fake.

He's Money gives people a big ego, man. And and usually people that have had, you know, a lot of success are, you know, competitive. And so, you know, a lot of people say that they don't want it, but then they see how much power it has and then they [ __ ] want it. Still talking like he's some authority on success.

 Still acting like he's got it all figured out. Still pretending he's the guy people should listen to. It's always funny to me to see guys like The Rock or whatever that's like still punching the narrative, still doing what he's told, still giving the speeches, you know? Like, who's your master? Like, what the are you doing? You got $400 million.

 Like, what the is wrong with you? Like, why are you answering to anybody? Dan's lecturing Dwayne Johnson about being controlled while simultaneously suing his father, getting investigated alongside his company, and launching scam coaching programs to stay relevant. The irony is suffocating. Dan spent a decade selling freedom, the fantasy that enough money means you answer to no one, that you can live however you want without consequences, and now he's drowning in consequences.

Legal battles, SEC investigations, a ruined reputation, desperate pivots into controversy, and coaching scams just to keep the lights on. The king of Instagram is gone. What's left is a cautionary tale about what happens when you build an empire on lies, and someone finally checks the foundation. Dan Bilzerian sold millions of young men a fantasy.

 The ultimate life, infinite money, infinite women, infinite freedom, no rules, no consequences, just winning. and every single piece of it was a lie. The poker winnings never happened. He inherited 12 million from his father's fraud schemes and accessed it the exact year his Instagram fame exploded. The mansion rented with company money.

 The models paid by Ignite while Dan went on podcasts claiming they showed up because they wanted to. Followers bought $26,000 for fake social proof. the lifestyle brand he built his entire identity around, funded by investor cash that his father allegedly helped steal through fabricated sales reports.

 Dan wasn't self-made. He was his father's son, another Bilzerian running another con. Except this time, the SEC is investigating the company. Dan suing his own father for $50 million. And the audience that made him famous grew up and realized they were worshiping a fraud. Well, I think I took Hedenism to the end of the earth and I just realized that it didn't bring me happiness.

It didn't bring happiness because none of it was real. You can't find meaning in a performance. And that's all Dan ever was. A performance artist selling teenage boys a dream funded by his criminal father's money. Now he's pivoting to controversy, spouting conspiracy theories to stay relevant, launching coaching scams with fake booking systems, teaching men how to manipulate women while his empire crumbles around him.

 The self-proclaimed king of Instagram is suing his dad, getting kicked off his own company board and scrambling for whatever attention he can grab because the foundation was always rotten. His father went to prison for fraud in the8s and still owes the government $180 million he'll never pay. Now that same father is being investigated by the SEC for fraud through Dan's company.

 And Dan's running the exact same playbook, manufacturing illusions, selling fantasies, taking money from people who don't know any better. The cycle didn't break. It just found a new platform. Dan Bilzerian's empire didn't collapse. It was never built. It was rented, borrowed, and stolen. And when the receipts finally surfaced, everyone saw what was always there.

 A rich kid with his father's money and his father's morals selling a lie to an audience that finally stopped buying

The CRAZY Truth About McDonald's

The CRAZY Truth About McDonald's - YouTube

Transcripts:

McDonald's is the largest restaurant chain in the world with over 40,000 restaurants spread over 120 countries by this point the golden arches are an inescapable site wherever you go and McDonald's has sold well over 300 billion hamburgers but the original McDonald brothers who started the business had their company all but stolen from them because what began as a single drive-in restaurant was soon transformed into a global fast food Empire because of an unrelenting milkshake machine salesman and even though it may appear to be a simple

Burger business from the outside McDonald's secretly dominates an entirely different industry completely unrelated to selling fast food at times McDonald's is an inspiring story of an entrepreneur defying all the odds and building an empire but at the same time it's a story of betrayal fraud and countless scandals at one point McDonald's even came face to face with the Italian mafia honestly this is a crazy story so sit back and relax as we journey through the the insane history of [Music] McDonald's in the early 1900s the American landscape was undergoing a massive transformation the Ford Motor

Company perfected the mass production of the car and all across the country roads were being paved to make way for it but the introduction of the car did more than change the way Americans traveled it also changed the way they ate in sunny California hundreds of Drive-In restaurants were popping up and customers loved the experience you would drive into the parking lot and be greeted by a waitress at your window a few minutes later your order would be delivered right there you didn't even have to get out the car to spice things up some restaurants even had waitresses deliver food on roller Gates that was

the world that the young Richard and Maurice McDonald encountered when they left New Hampshire and moved to California in 1927 but to begin with the two brothers Richard and Maurice or Mac as he was Otherwise Known didn't even think about restaurants they they wanted to start a career in the movie business and so they got jobs pushing film equipment and handling props on movie sets saving up with the hope of someday buying their own movie theater when the Great Depression struck Richard and Matt carefully watched every penny they earned and 5 years later they bought the cheapest theater they could find

Unfortunately they got what they paid for and their rundown theater earned them barely enough to survive so after 5 years of struggling to turn a profit with their theater the brothers decided it was time to abandon the movie business and pursue something more ative everywhere they looked the McDonald Brothers saw new Drive-In restaurants popping up and so they figured there has to be money to be made here their first restaurant was called McDonald's barbecue and originally they sold hot dogs it was a tough challenge between learning how to work a grill take and deliver orders and manage a restaurant

staff they had a lot on their hands but after two hard years of running their restaurant they were finally ready for something bigger they set up a new shop in an octagonal building on a parking lot in San Bernardino it was bigger in a better location and with new items on the menu on weekends the new McDonald's barbecue attracted over 100 cars at a time and the brothers managed a staff of 20 waitresses while they rushed to make milkshakes and cot dogs ribs pork sandwiches and burgers their cash registers were soon flooded with money by 1948 the brothers had made enough to

live in a mansion so their competitors were completely stunned when they did the unthinkable and abruptly closed everything down Richard and Mac had the best restaurant in town but the current operation was driving them crazy first ly their restaurant had become San Bernardino's local teenage hangout spot and was frequently filled with leather jacket wearing customers that brought just as much trouble as they did business secondly it demanded too much of their time and energy in the kitchen and was extremely stressful to run and finally finding qualified Cooks was hard

and expensive and so from the outside it looked like the McDonald brothers were just giving up but behind closed doors they were devising a new plan to completely transform their restaurants you see when they looked over their receipts from the last year the brother found that 80% of their revenue was generated exclusively from hamburgers so they went with their gut and cut their menu down to only the essential a hamburger cheeseburger french fries milkshakes and Coca-Cola they then obsessed over Reinventing the process of making a hamburger the brothers traced the outline of their store on their home

tennis courts and experimented with different layouts measuring and timing every step carefully when they were done every step at the Burger making process had been streamlined for example instead of having waitresses to serve customers in their cars customers would order at the window another example was having everyone in the kitchen handle only one task whether it was working the grill cooking the fries packaging the burgers or taking orders this meant they didn't need skilled workers to produce quality food and since they only sold Burgers now they could make the food before an

order was even placed the orders got fulfilled in around 15 seconds they called their new approach the Speedy service system and it produced delicious hamburgers with the same efficiency that Henry Ford's factories produced cars this kind of assembly line St production was a whole new approach to the restaurant business but it meant that their restaurant was cleaner less hectic and less expensive it also meant that Richard and Ma could sit back from their office and watch the system work its magic however when they reopened McDonald's the Speedy server system did cause some confusion customers would

sometimes just sit in their car expecting a waiter to come serve them as the notion of going up to order yourself was totally new but once everyone realized how the new process worked and that they could get their orders within 15 seconds they were hooked the McDonald Brothers had redefined fast food and word of it was spreading in the industry to their competitor's surprise Richard and Mac were happy to Spill the system secrets and they invited anyone in for a full tour of the kitchen for free some

of the biggest fast food franchises today like Burger King and Taco Bell got their start by shamelessly copying the Speedy service system but by 1954 Richard and Mac McDonald were serving more burgers fries and milkshakes than they ever dreamed possible and it wasn't too much work they lived a simple rewarding life working together in California but little did they know everything was about to change for McDonald's it's time to introduce the real protagonist of the McDonald's story Ray Croc despite coming from very humble

beginnings Ray had a lot of ambition even as a young kid whilst his mother was at home giving piano lessons to help out with the finances she ordered him to help out with regular housework but she never caught Ray complaining instead Ry took pride in making beds sweeping the floor and scrubbing the furniture until it shined in his spare time he was taught to play the piano and with unwavering discipline he mastered it from an early age but when he was 15 the United States joined World War one and Ray couldn't bear sitting at home as his fellow Countryman risk their lives so he

lied about his age managed to get deployed as an ambulance driver for the Red Cross by coincidence he worked right alongside Walt Disney when Ray returned home he was still in high school but he'd had enough not 6 months later his parents couldn't do much to stop him from dropping out he was determined to make it out on his own as a piano player so he took to the streets to make a living by his talents when he was 20 Ray went against his parents' wishes again and got married he understood that this was a big responsibility though and he had to take care of his wife Ethel so for the first time in his life he decided to get a

stable job he found it at the Lily cup company where he sold paper cups since he was energetic and charismatic Ray took naturally to sales by day he scoured the state chasing leads and by night he still played the piano for a radio station when he finally made it home he fell into bed exhausted Ethel did soon become frustrated by the Limited Time Ry had to spend with her though and when she told Ry she was pregnant he knew he had to rethink his strategy the piano got him paid but it would never be enough to support his family instead he cultivated his ability

as a Salesman and luckily for him that was the right choice because of prohibition hotels and bars began serving ice cream since they weren't allowed to sell liquor and thus American food service his businesses bought paper cups Like Crazy Ray even found ways for companies to sell more of the products that used his paper cups it was win-win his clients got more revenue and he made more cup sales but in October 1929 the stock market crashed unleashing the Great Depression and the growing economy of the United States came to a sudden stop Ray's boss at Lily cup sat him down in his office and told Ray that he would

have to take a pay cut Ray's face turned red I can't accept that he said but as Ray heard his boss explained to him that he didn't have an alternative ative Ray said to hell with it and quit right on the spot but when his wife Ethel found out she felt Ray was betraying her and their newborn baby by quitting a stable job when they were in desperate need of money so Ray went pleading to get his old job back but his relationship to his boss was tainted forever when he returned to his job one of his customers had invented a new milkshake machine he called the multimixer allowing for five

milkshakes to be made at once when Ray tasted the delicious new milkshakes it made he saw an opportunity if Lily cup sold the multi mixer as well they would automatic sell more paper cups as the products went together perfectly however when Ray proposed the idea to his boss he ridiculed him saying a paper cup company shouldn't be selling milkshake machines this time Ray had really had enough and quit once again he decided to start his own sales company to sell the multi mixer instead and he wasted no time getting started he was up against a tough economy with a family to feed and

had to make money fast despite ad normous adversities Ray worked 14-hour days and entertained potential clients late into the night with a Relentless work ethic and a good product he was soon driving all around the country selling thousands of multi mixers per year and making a decent living but just as soon as his efforts began to pay off America was thrust into World War II because of the war most factories shifted their focus to supplying the Army and multimix weren't getting made anymore Ray was living his worst nightmare he was a Salesman without a

product to survive he tried selling a bunch of different products until the Allies declared victory in 1945 but once the war ended the market finally took a positive turn for Ray with the baby boom following the war ice creams became all the rage and so did multimixer Ray began selling them to the biggest franchises in America such as Dairy Queen however this boom also meant that by the 1950s newer and better products were entering the market and the multimixer was falling out of fashion if fre didn't

find a winning product soon he could be in serious financial trouble but he then noticed something odd in his records surely it was a mistake a tiny restaurant in a remote Town 60 Mi east of LA had ordered a grand total of eight multimixer restaurant rarely bought more than one what on Earth would they need eight for Ray's curiosity was too much for him to handle he had to see for himself so he took a trip to San Bernardino California Ray arrived early in the morning but at first glance he was not impressed with McDonald's but very quickly the parking lot began to

get busier and busier probably 150 people showed up when Ray paid 15 cents for hamburger and received it almost instantly he couldn't believe it everything was clean his Burger was delicious new customers came in every minute and it was a family envir environments Ray had never seen anything like it he introduced himself to the McDonald brothers and they told him all about the operation Ray immediately loved their Speedy service system and he finally understood why they needed eight multimixer to operate this was the most active and most efficient fast food operation he'd seen in his whole career

the brothers also told Ry that they were looking for a franchising agent someone to build more McDonald's restaurants like their across the country and find operators to run them the McDonald Brothers enjoyed their simple life running this one store and so they didn't want to do it themselves but knew that if more McDonald's restaurants like this one did open they would also need a lot more multi mixers so he told the brothers to call him if they found someone to help them with franchising McDonald's however for the next week Ray

had trouble sleeping his imagination ran wild as he was tormented by a vision of McDonald's potential when he sold a multimixer his client used the same one for 10 years but McDonald sold hamburgers to thousands of people every day he knew he somehow had to get involved in this he called Richard McDonald to ask if they'd found a franchising agent by now they pattern so Ry asked well what about [Music] me when Ray began franchising MD Donald's in 1955 he was 52 years old he had diabetes arthritis and had lost both

his gallbladder and thyroid gland and still he worked with the same enthusiasm he had when he was only 18 having struck a deal with the McDonald Brothers to help them franchise Ray was on a mission to put a McDonald in every corner of America and so he founded McDonald's System Incorporated a separate entity to the original restaurant that was run by the McDonald Brothers the contract with the McDonald Brothers stated that Ray's job was to scout new locations to open new McDonald's stores and to find

restaurant operators to run them Ray would then train them on how to use the Speedy service system and repeat the process with more stores all across the country the contract also stated that if Ray wanted to make any changes in the store's design or change any part of the Speedy service system he would need to receive written confirmation signed by both Brothers now for every new McDonald's restaurant Ray opened he received $950 up front and the store operator would pay him 1.9% of the revenue the store generated however of that 1.9% over a quarter would go to the

McDonald Brothers as a royalty payment so Ray was essentially getting 1.4% of the money each McDonald's store made and at first Ray was thrilled about this partnership but soon he would start to feel he'd got a very bad deal and that his relationship with the McDonald brothers would be much worse than he could have imagined it all began when Ray found a great new spot for his first store near his office in Desplains Illinois and he also found a great new operator to run at the McDonald brothers gave Ray a new design featuring two Golden Archers for the new store but the

design didn't include a basement which was absolutely needed for the store to function properly Richard and Mac both agreed Ray should build the basement but they refused to sign anything which the contract clearly stated was required before Ray could proceed since it was necessary Ray went ahead and built the basement anyway but this man he was in breach of the contract unless the brothers could technically sue him at any time once the store open though the Golden Archers became a local attraction Ray arrives at the store every morning to check that everything was ready he

would then drive to work at his sales company which he still owned and return every night to clean up any cups or wrappers in the parking lot it wasn't his job to do that of course but R made sure that the quality service and cleanliness in the restaurant was held to his personal standards in just a few months the McDonald's in Illinois was even more impressive than the original McDonald's operated by the McDonald Brothers still Ray's compan McDonald's System Incorporated only got $950 for it plus 1.4% of the store's Revenue so

whilst the store's operator was getting rich Ray himself was barely making any money considering all the work he was putting in but it soon paid off in another way the store was so impressive that Harry sunborn the vice president of an ice cream chain called Tasty Freeze decided to suddenly quit his prestigious job and come to work for Ray Tasty Freeze was one of the largest franchises in the country at this point however Ray only had enough money to pay Harry $100 a week less than a quart qu of his salary at Tasty Freeze surprisingly though Harry was so keen on being a part

of McDonald's that he accepted Harry's job would be to manage the finances of McDonald's System Incorporated including negotiating loans and devising a way for them to actually make a profit Harry had a lot of experience from Tasty Freeze so in 1959 Ry appointed him as CEO this way Ray could focus on building as many stores as he could without worrying about the financial side of the business something that totally disinterested him in their first year as a Duo they got 18 franchises signed up to run their Ro Donald store nine of them in California however although it was easy to find new

operators there it turned out to be incredibly difficult to control them from halfway across America the first few operators didn't have the same appreciation for the Speedy service system that raided and they began experimenting with new products procedures and higher prices it was impossible to enforce quality control not to mention keep any consistency between one McDonald's and the next seeing this initial failure Ray decided it was best to start expanding closer to home but they learned a few key lessons that would shape McDonald's fundamentally firstly they learned the

importance of setting a minimum standard of quality in the system they would allow operators to experiment but they could never sacrifice three fundamental pillars quality service and cleanliness second they learned that the best type of operators from McDonald's were the young hungry entrepreneur types one of the best operators was a young Jewish man who tried selling a Catholic Bible to Ray he found it admirable and made him an operator these sorts of franchises were better because they were active operators with a lot of drive and hustle not just owners who wanted a

passive income finally Ray learned that if they were going to make serious money it was not going to be from a 1.4% service fee the average McDonald's made around $250,000 each year the that met McDonald's System Incorporated only made about 3,500 per store every year they would soon have to find a better way to monetize but for now all of this experience did give Ray and Harry the confidence they needed to start a mass expansion of McDonald's in its second year however with only 18 restaurants at this point McDonald's was still only one small fish in a massive ocean of comp competitors and the fight to become the

next big national chain was going to be [Music] brutal by 1956 McDonald's was already facing a number of worthy competitors partially because of the McDonald Brothers they' revolutionized fast food 8 years ago but they'd welcomed others into their kitchen creating lots of competitors who copied their system food was no longer unique to McDonald's Ray was trying to open up new McDonald's locations across the country but at the exact same time so were similar franchises like In-N-Out Burger Burger Chef and Burger King even outside of burgers Colonel Sanders was already expanding Kentucky Fried Chicken and KS

junor was doing the same with hot dogs with so many fast food franchises fighting for dominance McDonald's was far from being a guaranteed success so how did McDonald's manage to out compete every single one of them the answer it turns out was the genius of how Ray and Harry structured their franchising Empire at the time the most common way to franchise a brick and mortar business was territorial franchising which means selling the exclusive right to operate in a given territory by selling huge contracts for whole areas franchisers would make a lot of money up front

before their first St ever opened and it meant they weren't dependent on their restaurant actually succeeding to make a profit this sounds good in theory but in practice it in the interests of the franchise or and the franchise e weren't fully aligned instead of doing this Ray decided to build McDonald's one store at a time if an operator wanted to manage an additional store they would need to prove that their first McDonald's was successful this was slower but it guaranteed superior quality of every

store in the long run not just that but traditional franchisers made most of their money by selling supplies to their franchises things like kitchen equipment cooking supplies and even things like the restaurant sign franchisers made quick profits by overpricing their supplies and so they became more focused on selling stuff to their franchisees than actually becoming a successful retailer Ray decided against selling supplies to his franchisees because it turned them into his customers instead of his partners since Ray's company only made money from its 1.4% service fee

based on how much revenue each store made it was in his best interest to make his franchisees as rich as he possibly could it was a simple yet bold strategy and it meant that McDonald's System Incorporated interests were fully aligned with the interests of its store operators both of them were trying to make McDonald's stores the best and most profitable they could be as opposed to many other chains where the franchisers just make all their money selling two franchises even in person Ray treated McDonald's operators as equal Partners in his mission both franchisor and franchise benefited from the success of

the system as a whole and to everyone work to make McDonald's a success it didn't hurt that Ray was also a very convincing salesman when it came to communicating his unshakable belief in McDonald's future so many franchisees fully bought into his vision but because Ray was essentially selling a system he needed to find the right person to help perfect her luckily Ray already knew the man for the job a young guy named Fred Turner When Ray had first met Fred he was just 23 years old and had been hired to flip burgers in one of their McDonald's stores but from day one Ray

saw his own energy and enthusiasm for McDonald's reflected in Fred he was a natural leader with an incredible work ethic so he quickly climbed the ranks of McDonald's and within a few years re named him Vice President of Operations just like Ray Fred was very detail oriented in his new role Fred was responsible for maximizing the efficiency of every procedure in the Speedy service system and before long Fred had basically turned every McDonald's restaurant into a small Factory they took the already successful Speedy service system that the McDonald

Brothers had made made it even better and more efficient of course changing the system went completely against Ray's contract with the McDonald Brothers but by this point he was used to getting ignored by them the McDonald Brothers didn't seem to like how quickly Ray was moving with everything and so Ray often just pushed on without them thanks to Ray's franchising plan of treating franchises as his partners and not customers and thanks to Fred's Innovations the franchisees were getting incredibly rich with their stores

through sheer Word of Mouth McDonald started earning its Fame more and more people were hearing about this exciting business opportunity to own and operate your own McDonald and so instead of Ray having to look for ambitious entrepreneurs to run their stores they were now coming to him the mcf family as Ray called it was growing but as McDonald's System Incorporated grew so did its operating costs and they still hadn't yet found a better way to make money the McDonald Brothers refused to change anything in the contract so

Ray and Harry were barely hanging on with their 1.4% service fee Ray understood you could only get loyalty from your team if you gave it first so he sacrificed his salary to be able to afford paying his growing number of employees for his first eight years Ray didn't collect a single penny the only reason he could support his wife and daughter was because by 1959 his old sales company was still running basically on autopilot Ray was working 80-hour weeks with unrivaled passion at an age where most people were thinking about retirement but he still had two

problems to solve firstly his company needed to find a new way to make money or they could never grow to a sustainable scale and secondly there were the McDonald Brothers Ray felt they were a huge pain to deal with and he resented that he was doing all of this work but seeing very little reward himself But ultimately the McDonald's brand still technically belong to them of course Ray was Keen to change that and in doing so it would bring out the very worst of Ray Croc Ray was building a growing number of McDonald's across America but whilst his operators were getting rich his

company still hadn't found a way to make a profit the McDonald's Brothers lawyer who Ray called his mortal enemy always advised them to never sign anything Ray asked for so they insisted on the 1.4% service fee that have been agreed in the original contract which made it impossible for Ray to make any real profit without a creative solution thankfully Ry had his financial wizard Harry Harry came up with an idea to create franchise realy Corporation a separate company from McDonald's System Incorporated at first Ray was a little confused why Harry was suggesting they get into real estates but it soon became

clear it could be the solution to all their problems up until this point McDonald's store operators would pay rent to whoever owned the land beneath their store but now raised new company franchise realy would buy the property and lease it out to the McDonald's store operators this put Ray and Harry in a powerful position for a few reasons firstly it gave them a degree of freedom from the McDonald Brothers as a separate company franchise realy wasn't subject to the original contract Ray had signed with them second it gave Ray and Harry more control over their franchisees they

could enforce quality standards as conditions in their lease agreement for example if an operator was not keeping their store clean franchise realy had the right to terminate the lease on their property thirdly owning the land finally gave Ray and Harry a way to make some decent money instead of rent the store operator would pay a flat monthly fee or 8.

5% of the store's Revenue whichever was higher add to that the 1.4% service fee they were already getting and you have some serious cash flow finally franchise realy asked for a security deposit from its operators to build the store and they could use that money as a down payment on the land without spending a dime of their own this gave franchise real D assets on its balance sheet something that was immensely helpful when negotiating with banks and getting access to more funds for expansion it was a brilliant plan but the real beauty of it was how it once again aligned the interest of

McDonald's with its franchises whilst 8.5% of your Revenue go into franchise realy sounds like a lot in reality it just meant that Ry had yet another reason to ensure their franchisees became extremely rich the more money an operator made the more money Ry and his companies made now that they had a winning formula thanks to getting into the real estate business Ray and Harry could sense that they were on the brink of something extraordinary with McDonald's by 1960 McDonald's Had 228 restaurants in operation and slowly but

surely they were buying up all the land beneath them however it was also around that time that Ry was introduced to Joan Smith who happened to be the wife of a McDonald's franchisee Ry met her when she was The Pianist at a restaurant and they had an instant connection and ended up playing the piano and singing together unlike Ray's wife eel Jan shared his passion for business and they talked at length about what McDonald's could become after spending more time with her Ray very quickly fell in love

with her her and before long he filed for divorce with Ethel and proposed to Joan instead Joan had fallen for Ray as well but she was married with a family at the time so she told him she'd have to think about it while she did Ray set out to do something he'd wanted to do for quite a while he needed to finally get rid of the McDonald Brothers before we get to the next chapter it's time to answer one of the questions I get most how do we make these videos for magnetes media and how can you create highquality videos yourself on a budget well for years now

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com magnates or click the link in the description there are two sides to this story there's the official story and a much darker one told by the McDonald Brothers you see by improving on the Speedy service system without their written permission Ray had violated his contract with the brothers more times than he cared to count and this meant they could technically sue him at any time they were always unpredictable when it came to legal matters and so Ray decided to act before they had chance to ruin his plans he called them up and declared that he wanted to buy them out of McDonald's completely Ray told them to name their price and call him when they knew a few days later the phone

rang but when Ray heard the number his draw dropped to the floor $2.7 million that gives a million for me a million for mac and 700,000 for Uncle Sam Ray thought about it for a while this was everything he wanted he'd get the McDonald's name the original store in San Bernardino and the rights to everything McDonald's related so he'd be fully in charge but he had no idea where to get $2.

7 million sure things have been going well for Ray with this new real estate strategy but $2.7 million in 1960 is roughly the equ valent of $28 million today even for an upand cominging business that's a lot of money but Ry knew this was his chance so he agreed to the deal thankfully Harry had some powerful contacts on Wall Street so Ray was able to borrow the cash it meant taking on a lot of debt but Ray was so confident in the future of McDonald's he felt certain he'd make it back however the brothers suddenly decided that they didn't want to give up their own McDonald's store but they still insisted Ray paid the same price Ray was Furious

and it looked like the whole deal may fall apart but eventually it was agreed that the brothers would keep their store as long as they renamed their restaurant to the Big M so it was technically not associated with the McDonald's brand by now Ray hated the brothers with a passion but at least it seemed the deal was done but here is where the story splits into two paths the official story is the deal went well and the McDonald brothers were soon showing off their million dooll check to their friends and family however Richard McDonald tells a different story according to him a key

part of the deal was that the brothers wanted to keep the 0.5% royalty they'd received all this time Ray claimed that if this was written into the contract insurance companies would charge him too much so Ry supposedly agreed to pay the royalty out of his own income but that the deal would have to be done on a handshake basis rather than being official the brothers were nervous to take Ray at his word but they reluctantly agreed trusting that he wouldn't screw them over but Richard McDonald claims that when it came time for Ray to pay up the royalties the brothers were owed he refused never

paying them a single penny given how successful McDonald's went on to become that 0.5% of all revenue Vue would have been worth billions of dollars however since the agreement wasn't on paper there was nothing the brothers could do and they could never prove that the deal ever happened this way now it's entirely possible that Ray did make this handshake deal and then just completely backstabbed them knowing they could never prove it but many who have looked into the story of McDonald's believe that Richard's story is nothing but a myth either way a few things are certain 7 years of arguing with the McDonald

Brothers had cemented Ray's hatred for them and he definitely did want revenge as soon as Richard and Max signed that piece of paper to transfer all ownership of McDonald to Ray he told one of his employees I'm normally not a vindictive man but this time I'm going to get those sons of Ray's first order of business after negotiating the buyout was to open a McDonald's store a block away from the store owned by the brothers which they'd had to rename to the Big M Ray's intention for opening that store was purely to run them out of business it was cruel they weren't doing any harm by keeping their single store

as a passion project but it worked the big hem couldn't compete with a McDonald's right next to it and so the brother's dream of wanting to keep their store was shattered Ry also went about rewriting history by this point Ray and Harry had Consolidated McDonald's System Incorporated and franchise realy Corporation into a single entity the McDonald's corporation Ray called himself the founder of McDonald's and advertised his first franchise in Illinois as McDonald's number one essentially erasing the McDonald brothers and their original store from

the company's history with the brothers out of the way Ray then got the call he'd been waiting for it was Joan the woman he left his wife for but she didn't sound excited Joan said her mother was disappointed that she was even considering leaving her husband and Joan's daughter told her that if she got a divorce she could forget that she even had a daughter as a result Joan told Ry she couldn't marry him Ry put the phone down and sat in silence staring blankly at the floor he'd finally got the McDonald's business to himself but the love of his life was now gone at that

moment Ray decided it was time to throw himself into the business even more which meant things were about to get crazy by 1961 the McDonald brothers were out of the way and so there was nothing stopping Ray from transforming McDonald's into everything he dreamed it could be Ray wanted an aggressive marketing campaign to cement McDonald's as a household name but with only 228 stores across the country most Americans had never even heard of McDonald's National advertising campaign would be Overkill the team decided that the best way to promote McDonald's would be locally with the help of their franchises it was a gamble for sure

selecting the right franchisee to run a restaurant was hard enough and now they were trusting them with McDonald's image but Ra's personal preference in franchises were the young entrepreneurial types and this became one of McDonald's strengths because they were always experimenting with new ideas on how to improve their own restaurants for example one operator wanted to use TV advertising to get children interested in his McDonald's he found a local show called Bozo circus and when it came time for the Bozo character to promote McDonald's the actor was a spectacular salesman and the local McDonald's was soon flooded with kids

when the TV show was canceled though they were left without their biggest promoter but realizing how successful targeting children had been McDonald's created a new mascot Ronald McDonald's and they made him a staple of every single McDonald's along with the whole cast of characters including the Hamburglar and Grimace McDonald's would later double down on this strategy further by introducing the Happy Meal which included a toy and thus helped get new customers hooked on McDonald's from an early age it was only in later years

that many would come to question the ethics of so aggressively targeting children with their fast foods but still individual McDonald's operators like this one were responsible for creating other Innovations like the Big Mac the drive-thru and plays and that was The Duality of Ray Croc whil he was very keen to ensure the same consistent quality of experience at every McDonald's he also encouraged his franchises to use their own creativity McDonald would then choose the best among these local experiments and Implement them into the system as a whole so every other restaurant would

benefit too for many companies growing larger can offer mean less Innovation but for McDonald's every new operator came with fresh new ideas to bring to the table so as more stores began to Market themselves across the country eventually McDonald's did begin to get national attention at this point Ray figured the next logical move was taking McDonald's public on the stock market something no other fast food company had done by 1965 and the timing was perfect America was in the thick of one of the most generous bull markets in history So within weeks of going public McDonald

stock Rose over 6 % in value Ray was now a multi-millionaire as was Harry who' been with Ray pretty much from the start however it wasn't all plain sailing for the McDonald's team in the 60s Harry had felt McDonald's needed to slow down its aggressive expansion due to fears of an upcoming recession but they main competitor Burger King did the exact opposite in 1967 Burger King opened over 100 restaurants and by the next year Burger King was only 100 total restaurants away from surpassing McDonald's seeing that McDonald's could lose its spot at the top of the fast

food industry Ray demanded they ignore the warnings and resume the expansion campaign immediately in truth tensions between Ray and Harry had been starting to grow for a while they had very different perspectives and often saw things very differently whilst Harry was technically the CEO Ray was the company president and owned the majority of company stock so he could replace Harry if he needed to and after the expansion argument he nearly did but luckily it didn't come to that as Harry stepped down from the company voluntarily and Ray took over a CEO himself but one day while giving a speech to a group of

operators Ray saw that Joan was in the crowd the woman who'd broken his heart years ago Ry worked into his speech that he'd now achieved all he ever wanted in life except one thing the crowd was confused what he meant but Ray was staring right at Joan as he said it to get her close Ray called for an Afterparty in his suite by the end of the night Ray and Joan were the only ones left singing old favorites at the piano Joan told Ry that this time she didn't care what anyone told her she was getting a divorce from her husband and wanted to marry Ry instead now for 15

years Ray's entire life had been consumed by McDonald's and it had paid off but now that he was starting a new marriage with the woman he'd been chasing for years he wanted to finally think a bit less about the business for a man as driven as Ray this certainly didn't mean he would retire it just meant he would only think about McDonald's while he slept and up to about 5:00 p.m.

 and then keep the evenings reserved for Joan while Ray would remain the public face of McDonald's for many years he wanted to name a new driven CEO to lead the company forward and that responsibility fell to Fred Turner the young fry cook had picked out and promoted to Vice President of Operations all those years ago he'd become like the son Ry never had and after shadowing Ray for years Ray felt Fred was ready to take over a CEO and whilst Ray had left big shoes to F it's fair to say Fred delivered the first challenge Fred toon was expanding McDonald's globally none of their competitors had been able to succeed outside of America yet and even Ray had

tried to expand McDonald's into the Netherlands Canada and the Caribbean however their original mistake was trying to adapt their menu to the local culture and it failed horribly when Fred tried breaking McDonald's into Japan he knew he had to take a different approach instead of changing the menu he left it intact but like in America he left marketing to the locals and it worked the Japanese people loved the authentic McDonald's experience in fact they admired its Japan likee efficiency the same strategy worked in other countries as well and McDonald's became one of the

main exporters of American culture since they recruited locals to operate the restaurants and Market the brand the world received them with open arms next on Fred's List was putting expansion into to high gear Fred had climbed the ladder at McDonald's all the way from Burger flipper to CEO so he understood the business from all angles when he was younger he perfected every aspect of operations from finding the right temperature to cook fries in to the Way employees spoke to customers now though Fred was optimizing the process of finding a franchisee and opening a new store and it's fair to say he succeeded

with Fred a CEO there was no escaping McDonald's new stores were being built across the world faster than even Ry had ever dreamed was possible by 1974 they were opening more than 500 restaurants every year and the number only kept growing only a few years before Burger King had equaled McDonald's in terms of yearly growth but Fred broke McDonald's into the global market and more than tripled the number of stores Burger King was that far behind and McDonald's was fast becoming one of the largest and most iconic companies in the world however now that McDonald's was a global

conglomerate it was up against a new and dangerous caliber of challenges as the international face of fast food McDonald's was about to face some of the worst scandals in its history because of its enormous size McDonald's became a target for public humiliations and much much [Music] worse McDonald's began running a competition where Monopoly stickers were attached to many of its products if you found the right stickers you could win prizes most of these were simple items like a free Big Mac or soda but there were also a small smaller amount of high

value prizes you could win like cars Vacations or even the grand prize of a million dollar it was a fun Lottery that definitely helped increase sales of McDonald's but it just so happened that a former policeman and a member of an Italian crime family managed to rig the entire game and steal millions of dollars you see McDonald's Had hired an impartial third party company to manage the promotion so that McDonald's themselves would not have any control over who actually won the prizes the chief of security for this third party company was a former cop called Jerome Jacobson who was responsible for

Distributing the winning stickers to stores Across America when Jerome was transporting the winning stickers they were already in an envelope with a tamperproof seal and he was accompanied by a chaperone So in theory there was no way he could steal them however due to a mistake with their supplier one day Jerome received some of these tamperproof seals to his personal address instead of the company address Jerome realized that he could essentially open the sealed envelope containing the winning stickers switch them for different low value stickers

then reseal the envelope you using these tamperproof seals he'd received thus leaving no evidence behind that he' just stolen the winning pieces he simply had to go to the bathroom so that the shaon with him couldn't see what he was doing and make the swap over there and come out as if nothing had happened now of course even though he was able to steal the stickers Jerome couldn't just redeem the winning stickers himself that would be extremely obvious he'd stolen them so he started selling them to people he knew for example he sold one winning sticker to his brother-in-law and another to his local butcher in exchange

they gave him a cut of the prize money once they'd redeemed it at the McDonald's store where Jerome was supposed to have delivered it Jerome made some good money from this however the operation went to a whole new level when Jerome met an Italian mobster called Jerry Columbo Jerome and Jerry struck up a partnership where Jerry would sell the tickets to his Connections in the Columbo crime family and their Associates so Jerome began stealing more and more winning McDonald's Monopoly stickers gave them to Jerry who would then sell them off to

his Network and for years McDonald's and the general public were completely unaware that millions of dollars of prizes were in fact going to organized criminals for Jerome everything was going perfectly up until Jerry Columbo died in a car accident with his main partner in crime now gone Jerome cut ties with the Columbo family and many suspect this was ultimately Jerome's undoing you see in the year 2000 the FBI got an anonymous tip to look into the McDonald's Monopoly Prize winners when they did the FBI noticed that some of the winners were related they didn't

have the same surname but it was still a very odd coincidence so they dug deeper and found that even though the prizes had been claimed all across the US the majority of winners seemed to be actually living in Jacksonville clearly something was going on there were millions of dollars at stay here so the FBI contacted the heads of McDonald's who wanted to stop the game immediately when they heard the news but instead the FBI convinced them to run the promotion one final time so they could do an undercover operation and thus when the next million-dollar winner claimed his

reward a man named Michael Hoover the FBI approached him pretending to be a film crew and asked him some questions about which store he'd got the winning sticker from of course he hadn't actually got the sticker from a McDonald's store he' got it from Jerome but right after the undercover agents left Michael made a phone call in which he mentioned Jerome's name and literally said they bought it all of them so he was bragging about how his lies had worked completely unaware he hadn't really spoken to a film crew but instead undercover FBI agents who had wiretapped him and were now hearing everything he

was confessing over the phone the FBI now had concrete evidence and they swooped in in total 50 people were convicted in association with the scam with the main leader Jerome pleading guilty and having to pay back all the millions of dollars he'd stolen along with a three-year jail sentence however Jerome had run this scam from 1988 to 2001 and by the time they were caught by the FBI McDonald's had already paid out $24 million to illegitimate winners not just that because the big prizes had been paid out to scammers real McDonald's customers had missed out on the prizes so McDonald's gave away

around $25 million to random customers to try and make up for this they also paid 16.6 million in IL legal settlements in total the scammers cost McDonald's over 65 million but the real losers were all the customers who'd been participating in the contest hoping to win prizes unaware they couldn't possibly win them as most of the big prizes were being illegally given to the mafia and their connections this fraud was undoubtedly a huge controversy for McDonald's however just a couple of years later the company would be involved in an even bigger

scandal [Music] in 2004 Morgan Spurlock released his documentary supersize me at the time several people were suing McDonald's claiming their food made them overweight and caused them health problems but none of them could prove McDonald's was really to blame as they obviously ate food other than McDonald's as well when Morgan learned about these cases he challenged himself to eat only McDonald's every day for a month that meant breakfast lunch and dinner and if an employee offered to superp siiz his meal he'd take the largest possible option from the menu Morgan knew eating

only McDonald's would have some strange effects on him but he underestimated the challenges true health risks today there's a widespread understanding that eating fast food can be detrimental to your health fast food usually contains lots of sugar saturated fats and preservatives so most health professionals agree that it's better to avoid fast food not surprisingly Morgan's 1month McDonald's binge worried his doctors by the end of 30 days Morgan put on 27b his cholesterol and blood pressure were through the roof and he felt depressed for a good portion of the challenge there were scenes of him vomiting after eating a full super siiz

option meal and he even developed serious heart complications all within the span of a month after the documentary aired the public image of McDonald's was never the same 6 weeks after the documentary was released McDonald's removed the super size option from the menu they even started the Go Active Campaign which promoted healthier options and exercise McDonald's claimed these decisions were not influenced by the documentary but the damage was already done super siiz me portrayed McDonald's as junk food and the reputation stuck to them and it is interesting to look at the data here in

the 1960s when McDonald's Had merely 228 restaurants Americans obesity rate stood at just 133% whereas today more than 40% of Americans are obese over three times what it was 60 years ago and many correlate the rise of fast food chains like McDonald's with the global Trend towards obesity now of course it's important to note that this is influenced by a wide range of factors and fast food is only one of many contributing elements and ultimately consumers choose what they eat but there's no doubt that as the largest fast food chain in the world and the one who perfected it the story of fast food

is closely tied with the story of McDonald's but that certainly hasn't stopped McDonald's success with a market cap of over $200 billion today it's one of the 50 largest companies on the planet what's interesting though is that every year the company has its annual Founders Day events a celebration to honor Ray Croc not the McDonald's brothers who really started the company but whil they were the true Founders it's also true that the business would never have been as big as it is without Ray Croc it was Ray who constantly wanted to keep expanding whilst the

brothers wanted an easier more relaxed life besides while Ray and the brothers did grow to hate each other that's nothing compared to what happened with the owner of KFC and you can click here to watch that story next I'll see you there cheers