What's in a name?
Tuesday, April 22nd, 2024
In 1961 Ray Kroc paid the McDonald brothers $2.7 million dollars to acquire their restaurant.
According to inflation calculators, $2.7 million would've equaled $28,203,892.98 in today's dollars.
I don't know the whole story, but I'm not sure why some people think Kroc was a crook and "stole" McDonalds.
If someone came to you and offered you 28 million dollars for your start up - would you say yes or no?
Well, the McDonald brothers said yes.
Makes me wonder...
Why didn't Kroc just start his own business? Why did he spend $2.7 million dollars ($28 million dollars today) to buy them out?
They weren't that big at the time.
Kroc was obviously the key salesmen and visionary behind the franchise (not the operations but the marketing and finances behind the "Speedee Service System").
I mean what the McDonald brothers were doing wasn't that complicated.
They just took the idea of an assembly line and made it into a restaurant.
As far as I know, nothing they had at the time was proprietary or "secret".
So why did he buy them out instead of just starting something new with his name on it?
Kroc needed something he couldn't make or get himself...
The name.
They had already built a strong reputation and brand for themselves the McDonalds name.
It already symbolized cheap, consistent, tasty fast food and he couldn't compete with that.
He realized it was starting to "go viral" and, with the right strategy, could really explode across the world.
They already had consistent, continuity cash flow with a proven process and system that was simple, fast and cheap.
Kroc had no intention of recreating the wheel so...
So he bought them out instead.
Spent $28 million dollars to do it.
Since 1961 McDonalds has grown to almost $200 BILLION dollars.
That's like trading $1 for $7,142.
Totally crazy.
Let's look at this another way.
How many domain names do you have?
C'mon, be honest.
Over the years I've bought dozens maybe even close to a hundred.
How many of those did I do something with?
Less than ten.
But those few have made me millions of dollars.
Picking and capitalizing on the right name can be the difference between making or losing money.
Don't think a name is important?
Here's another story from Dean Grasiozi.
Him and Tony Robbins partnered up to create a business training and creation software. Something to streamline start up entrepreneurs building their businesses.
They wanted to get the domain and brand "Mastermind.com" but someone already owned it and wasn't selling.
Russell Brunson (one of their pals) heard about their project and their dilemma, contacted the buyer and talked him down to a meager fee of 1 MILLION DOLLARS.
Yup, Russell Brunson bought Mastermind.com for $1,000,000 and then gave it to Dean and Tony as a gift.
Now Mastermind.com is grossing hundreds of millions of dollars every year.
Just getting started? Launching a new book, podcast or product?
Take some serious thought into your the name.
It's one of the highest-leverage things you could do.
Someone might even want to buy it off of you for some serious cash later...
Talk soon,
Josh
How did you decide on the name of your business?
Have you watched my latest video on youtube? If not, take a minute out of today to see what all of the buzz is about.
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