How McDonald's Original CEO Betrayed The Founders (We're Sorry, McDonald Brothers)

Ask someone to picture a fast-food burger and they'll probably think of a Big Mac. That's because the Golden Arches has been the undisputed top dog of the fast-food industry since its inception in 1940 by brothers Richard and Maurice McDonald. But with over 40,000 McDonald's locations in operation around the world and millions of burgers sold each day, there lies a betrayal at the heart of its founding — one of the most infamous tales in business history. The betrayal? A broken deal that cost the McDonald brothers millions.

Richard and Maurice McDonald founded McDonald's with the core tenets of the fast-food system we know today: small menus, disposable packaging, and assembly-line-style preparation. This model was a success, and in 1954, Ray Kroc — a milkshake machine salesman — entered the scene. He saw potential in the brothers' profitable restaurant and became McDonald's first franchise agent, but this lucrative deal was the beginning of a bitter feud. Differing views on how the brand should be run caused tensions to skyrocket between the brothers and Kroc, who eventually bought the brothers out for $2.7 million — the equivalent of approximately $29 million in 2025. A verbal commitment by Kroc also promised the brothers 0.5% (sometimes cited as 1%) of the business' profits for life, but the family says neither brother ever saw a penny of it.

Kroc died in 1984 with an estimated $500 million to his name — more than 185 times the amount he paid the brothers. From a strictly business perspective, Kroc clearly came out on top.

The $2.7 million buyout was lucrative for the McDonald brothers. But compared to the explosive success the chain would see in later decades — and a series of broken promises that culminated in Ray Kroc officially putting them out of business — it's clear that Richard and Maurice fell victim to corporate ambition and greed.

While Richard and Maurice McDonald did receive their fair share of the $2.7 million, they reportedly never received any money from their agreed-upon share of future profits. However, despite already having taken advantage of them, Kroc made sure to put the final nail in the brothers' coffin. The brothers had retained their original restaurant in San Bernardino. In response, Kroc opened a McDonald's right across the street from their location — now renamed the Big M — which whittled down their customer base and eventually forced them to close, officially ending their decades-long stint with the McDonald's business. Today, the San Bernardino location still stands, having been turned into a vintage McDonald's museum.