The True Cost Of America's Diet
Originally published in Rolling Stone magazine (USA), Issue 794, September 3rd 1998.
By National Magazine Award winner Eric Schlosser
Part One of Two Part Two
After four decades, our obsession with fast, cheap food has transformed our towns and flooded the labor market with low-paying, dead-end jobs. Is this a healthy menu?
Cheyenne mountain sits on the eastern slope of Colorado's front range, rising steeply from the prairie and overlooking the city of Colorado Springs. From a distance, the mountain looks beautiful and serene, dotted with rocky outcroppings, scrub oak and ponderosa pine. And yet Cheyenne Mountain is hardly pristine. One of the nation's most important military installations is located deep within it, housing operational units of the North American Aerospace Defense Command, the United States Space Command and the Air Force Space Command. In the mid-1950s, high-level officials at the Pentagon worried that America's air defenses were vulnerable to sabotage and attack. Cheyenne Mountain was chosen as the site for a top-secret underground combat-operations center. The mountain was hollowed out, and about 700,000 tons of rock were removed. Fifteen buildings, most of them three stories high, were erected amid a maze of tunnels and passageways extending for miles. The four-and-a-half-acre underground complex was designed to survive a direct hit by a ten-kiloton atomic bomb. Now officially called the Cheyenne Mountain Operations Center, the facility is entered through massive steel blast doors that are three feet thick and weigh twenty tons each. Pressurized air within the complex prevents contamination by radioactive fallout or biological weapons. A heavily armed quick-response team guards against intruders. The place feels like the set of an early James Bond movie, with men in jumpsuits driving little electric vans from one brightly lighted cavern to another.
|A survey of American schoolchildren found that ninety-six percent could identify Ronald McDonald. The only fictional character with a higher degree of recognition was Santa Claus. The impact of McDonald's on the nation's culture, economy and diet is hard to overstate. Its corporate symbol - the Golden Arches - is now more widely recognised than the Christian cross.|
Fifteen hundred people work inside the mountain every day, maintaining the facility and collecting information from a worldwide network of radars, spy satellites, ground-based sensors, airplanes and blimps. The Operations Center tracks every man-made object that enters North American airspace or that orbits the earth. It provides early warning of missile attacks. It detects the firing of a long-range missile, anywhere in the world, before that missile has left the launch pad. Much of the work performed at the center is top-secret. The hallways of its inner sanctum are painted slate gray, the ceilings are low and there are combination locks on every door. The complex was built to be self-sustaining for one month. Its generators can produce enough electricity to power a medium-size city. Its underground reservoirs hold 6 million gallons of water; workers sometimes traverse them in rowboats. Inside the mountain there is a fitness center, a chapel, a hospital, a dentist's office, a barber shop and a cafeteria. When men and women stationed at Cheyenne Mountain are tired of the food in the cafeteria, they often send somebody over to the Burger King at Fort Carson, a nearby Army base. Or they call the Domino's on South Academy Boulevard in Colorado Springs.
Almost every night of the week, a Domino's deliveryman winds his way up the lonely Cheyenne Mountain Road, past the stern no trespassing signs, past the security checkpoint at the entrance to the base, driving all the way up to the fortified North Portal, tucked behind chain-link and barbed wire. At the spot where the road heads into the mountainside, the deliveryman drops off his pizzas and collects his tip. And should Armageddon come, should a foreign enemy someday shower the United States with nuclear warheads, laying waste to the continent, entombed within Cheyenne Mountain, along with the high-tech marvels, the pale-blue uniforms, comic books and Bibles, future archeologists may find other clues to the nature of our civilization - Big King wrappers, hardened crusts of Cheesy Bread, Barbecue Wing bones, and the red, white and blue of a Domino's pizza box.
During the last four decades, fast food has infiltrated every nook and cranny of American society. An industry that began with a handful of modest hot dog and hamburger stands in Southern California has spread to every corner of the nation, selling a broad range of foods wherever paying customers may be found. Fast food is now served not only at restaurants and drive-thrus but also at stadiums, airports, college campuses and elementary schools, on cruise ships, trains and airplanes, at Kmarts, Wal-Marts, gas stations and even hospital cafeterias. In 1970, Americans spent about $6 billion on fast food. Last year they spent more than $100 billion on fast food.
Americans now spend more money on fast food than they do on higher education, personal computers, software or new cars. They spend more on fast food than on movies, books, magazines, newspapers, videos and recorded music - combined.
The rapid growth of the fast-food industry has been driven by fundamental changes in the U.S. economy. The hourly wage of the average American worker peaked in 1973 and then steadily declined until last year. Women entered the work force in record numbers, often motivated less by feminism than by a need to help pay the bills. In 1975, about a third of American mothers with young children worked outside the home; today about two-thirds of such mothers are employed. As the sociologists Cameron Lynne Macdonald and Carmen Sirianni have noted, the entry of women into the nation's work force has greatly increased demand for the types of services that housewives traditionally performed: cooking, cleaning and child care. The fast-food industry has benefited from these demographic changes, supplying at low cost the meals no longer prepared in the home and hiring at low wages millions of young women in need of extra income.
The McDonald's Corp. has become a powerful symbol of America's service economy, the sector now responsible for ninety percent of the country's new jobs. In 1968, McDonald's operated about 1,000 restaurants. Today it has about 23,000 restaurants worldwide and opens roughly 2,000 new ones each year. An estimated one of every eight Americans has worked at McDonald's. The company annually trains more new workers than the U.S. Army. McDonald's is the nation's largest purchaser of beef and potatoes. It is the second-largest purchaser of poultry. A whole new breed of chicken was developed to facilitate the production of McNuggets. The McDonald's Corp. is the largest owner of retail property in the world. Indeed, the company earns the majority of its profits not from selling food but from collecting rent. McDonald's spends more money on advertising and marketing than does any other brand, much of it targeted at children. A survey of American schoolchildren found that ninety-six percent could identify Ronald McDonald. The only fictional character with a higher degree of recognition was Santa Claus. The impact of McDonald's on the nation's culture, economy and diet is hard to overstate. Its corporate symbol - the Golden Arches - is now more widely recognized than the Christian cross.
Almost twenty-five years ago, the farm activist Jim Hightower warned of "the McDonaldization of America." He viewed the emerging fast-food trade as a threat to independent businesses, as a step toward a food economy dominated by giant corporations and as a homogenizing influence on American life. Much of what he feared has come to pass.
The rise of the fast-food industry has been accompanied by important changes in how America's food is produced. The centralized purchasing decisions of large restaurant chains and their need for standardized products have given a small number of corporations an unprecedented degree of power over the nation's food supply. Moreover, the success of the fast-food industry has encouraged other industries to adopt its business methods, filling America's main streets and malls with Gaps and Coconuts, Maid Brigades, Pawn Marts and HobbyTown USAs.
Franchises and chain stores have in the last twenty-five years gained a forty percent share of all retail spending in the United States. Almost every facet of American life has now been franchised. From the maternity ward at a Columbia/HCA hospital to an embalming room owned by the Houston-based Service Corporation International - "the world's largest provider of death-care services," which since 1968 has grown to include 3,012 funeral homes, 365 cemeteries and 156 crematoriums, and which today handles the final remains of one of every nine Americans - a person can now go from the cradle to the grave without spending a nickel at an independently owned business.
The key to a successful franchise, according to many texts on the subject, can be expressed in a single word: uniformity. Franchises and chain stores must reliably offer the same product or service at numerous locations. Customers are drawn to familiar brands by an instinct to avoid the unknown. A brand offers a feeling of reassurance when its products are always and everywhere the same. "We have found out . . . that we cannot trust some people who are nonconformists," declared Ray Kroc, one of the founders of McDonald's, angered by some of his franchisees. "We will make conformists out of them in a hurry. . . . The organization cannot trust the individual; the individual must trust the organization. . . ."
One of the ironies of America's fast-food industry is that a business so dedicated to conformity was founded by iconoclasts and self-made men, by entrepreneurs willing to defy conventional opinion. Few of the people who built fast-food empires ever attended college, let alone business school. In many respects, the fast-food industry embodies the best and the worst of American capitalism at century's end - its constant stream of new products, its innovative technology, its sophisticated mass-marketing techniques, its widening gulf between rich and poor. While a handful of fast-food workers manage to rise up the corporate ladder, the vast majority lack full-time employment, receive no benefits and constantly float from job to job. The only Americans who earn lower wages today than fast-food workers are migrant farm workers.
In the fast-food restaurants of Colorado Springs, behind the counters, amid the plastic seats, in the changing landscape outside their windows, you can see all the virtues and destructiveness of our fast-food nation. The recent growth of Colorado Springs parallels that of the fast-food industry; during the last three decades, the city's population has more than doubled. Subdivisions, malls and chain restaurants are appearing in the foothills of Cheyenne Mountain and in the plains rolling to the east. The Rocky Mountain region as a whole has the fastest-growing economy in the United States, mixing high-tech and service industries in a way that may define America's work force in the century to come. And new restaurants are opening there at a faster rate than anywhere else in the country, an onslaught of new Subways, Schlotzky's, Waffle Houses, Popeye's and Taco John's.
The sociologist George Ritzer has attacked the fast-food industry for celebrating efficiency ahead of every other human value, calling the triumph of McDonald's "the irrationality of rationality." Others consider the industry proof of the nation's continued economic vitality, a quintessentially American institution that appeals worldwide to millions who admire our way of life. As McDonald's loses market share to competitors like Wendy's, Carl's Jr. and Jack in the Box, more is at stake than stock options and dividends. Perhaps no other industry offers, both literally and figuratively, so much insight into the nature of mass consumption. The typical American consumes about three hamburgers and four orders of french fries every week. Roughly a quarter of the nation's population buys fast food every day - and yet few people give the slightest thought to who makes it or where it comes from.
The changes prompted by fast food have occurred so quickly and have been so all-encompassing that it is now hard to conceive of a world without hamburgers served in brightly colored paper boxes, without drive-thru windows, without the same restaurants making the same food the same way in almost every American city and town. The basic thinking behind fast food has become the operating system of today's service economy, spreading identical retail environments throughout the country like a self-replicating code. The value meals, two-for-one deals and low prices on the menu disguise the real costs of fast food. As the old saying goes: You are what you eat.
The Founding Fathers
Carl N. Karcher is one of the fast-food industry's pioneers and, at age eighty-one, perhaps the last of its founding fathers. His career extends from the industry's modest origins in postwar Southern California to its current dominance of the American diet. His life story seems at once to be an old-fashioned tale by Horatio Alger, a fulfillment of the American dream and a warning about unintended consequences.
Karcher was born in 1917 on a farm near Upper Sandusky, Ohio. His father was a sharecropper. Carl had six brothers and a sister. Their father always told them, "The harder you work, the luckier you become." Carl dropped out of school after the eighth grade, working twelve to fourteen hours a day on the farm. In 1937, an uncle offered him a job in Anaheim, California. He was twenty years old and six feet four, a big, strong farm boy who had never set foot outside northern Ohio. The drive to California took a week. When he arrived in Anaheim - a small town surrounded by orange groves, lemon groves, ranches and modest farms - Carl said to himself, "This is heaven."
His uncle's business, Karcher's Feed and Seed Store, was located in the middle of downtown Anaheim. Carl worked there seventy-two hours a week, delivering goods to the local farmers who raised chickens, cattle and hogs. During Sunday services at St. Boniface Catholic Church, he met an attractive young woman named Margaret Heinz, who had grown up on a local farm. Carl became a frequent visitor to the Heinz farm, which had ten acres of orange trees and a Spanish-style house. After returning briefly to Ohio, Carl went to work for the Armstrong Bakery in Los Angeles. The job soon paid twenty-four dollars a week, six dollars more than he had earned at the feed store. Carl and Margaret were married in 1939 and had their first child within a year.
Carl drove a truck for the bakery, delivering bread to restaurants and markets in West L.A. He was amazed by the number of hot dog stands that were opening and by the number of buns they went through each week. When Carl heard that a hot dog cart was for sale on Florence Avenue, across from the Goodyear factory, he decided to buy it. Margaret strongly opposed the idea and wondered where he'd find the money. Carl borrowed $311 from the Bank of America, using his car as collateral, and persuaded his wife to give him fifteen dollars in cash from her purse. "I'm in business for myself now," he thought after buying the cart. "I'm on my way." Five months after Carl bought the cart, the United States entered World War II and the Goodyear plant became very busy. He soon had enough money to buy a second hot dog cart, which Margaret often ran by herself while their daughter slept nearby in the car.
From the maternity ward at a Columbia/ HCA hospital to an embalming room owned by Service Corporation International - 'the world's largest provider of death-care services,' which since 1968 jas grown to inlude 3,012 funeral homes, 365 cemeteries and 156 crematoriums - a person can now go from cradle to the grave without spending a nickel at an independently owned business.
Southern California in the 1930s and 1940s gave birth to a new lifestyle that revolved around the automobile. "People with cars are so lazy, they don't want to get out of them to eat!" said Jesse G. Kirby, the founder of an early drive-in restaurant chain. Kirby's first "Pig Stand" was in Texas, but the chain soon thrived in Los Angeles alongside countless other food stands offering "curb service." Drive-ins like Stan's, Paul's, Tiny Naylor's and Bob's Big Boy featured waitresses carrying trays of food to customers in their parked cars. The waitresses, known as car hops, often wore short skirts and skimpy uniforms. The drive-ins fit perfectly with the youth culture emerging in Los Angeles: They offered a combination of girls and cars and late-night food.
By the end of 1943, Carl Karcher owned four hot dog carts in Los Angeles. In addition to running the carts, he still worked full time for the Armstrong Bakery. When a restaurant across the street from the Heinz farm went on sale, Carl decided to buy it. He quit the bakery, bought the restaurant, fixed it up and spent a few weeks learning how to cook. On January 16th, 1945, his twenty-eighth birthday, Carl's Drive-in Barbeque opened its doors. The restaurant was small and rectangular, with red tiles on the roof. During business hours, Carl cooked, Margaret worked behind the cash register and car hops served most of the food. After closing time, Carl cleaned the bathrooms and mopped the floors. When World War II ended, business at Carl's Drive-in Barbeque boomed, along with the economy of Southern California. Carl soon added grills to his hot dog carts and began serving hamburgers topped with a "special sauce." Every week, Carl made the sauce on his back porch, stirring it in huge kettles and pouring it into one-gallon jugs.
Carl and Margaret bought a house in Anaheim five blocks from the restaurant, adding new rooms as the family grew. They eventually had twelve children. Anaheim slowly became less rural and more suburban. Walt Disney bought up thousands of acres of local orange groves and started to build Disneyland. Carl's Drive-in Barbeque prospered. And then Carl heard about a restaurant in the "Inland Empire," fifty miles east of Los Angeles, that was selling high-quality hamburgers for fifteen cents - twenty cents less than what Carl charged. He drove to E Street in San Bernardino, a working-class, largely agricultural town, and saw the shape of things to come.
Brothers Richard and "Mac" McDonald had run a successful San Bernardino drive-in for years. By the end of the 1940s, however, Richard and "Mac" had grown dissatisfied with the drive-in business. They were tired of constantly looking for new car hops and short-order cooks as the old ones left for higher-paying jobs elsewhere. They were tired of replacing the dishes and silverware their teenage customers broke or ripped off. The brothers thought about selling the restaurant. Instead, they tried something new.
The McDonalds fired all their car hops in 1948, closed their restaurant, installed a larger grill and reopened three months later with a radically new method of preparing food. They eliminated almost two-thirds of the items on the menu. They got rid of every item that had to be eaten with a knife, spoon or fork. The only sandwiches now sold were hamburgers and cheeseburgers. The brothers got rid of their dishes and glassware, replacing them with paper cups, bags and plates. They divided the food preparation into separate tasks performed by different workers. The guiding principles of the factory assembly line were applied to the workings of a commercial kitchen. The new division of labor meant that a worker had to be taught how to perform only one task. Skilled and expensive short-order cooks were no longer necessary. All of the burgers were sold with the same condiments: ketchup, onions, mustard and two pickles. No substitutions were allowed. The McDonald brothers now aimed for a family crowd, refusing to hire any female employees, who might attract teenage males. In Behind the Arches (1995), a history of McDonald's, John F. Love notes the real significance of the new self-service system: "Working-class families could finally afford to feed their kids restaurant food."
After visiting San Bernardino, Carl Karcher decided to open his own self-service restaurant. The first Carl's Jr. Restaurant opened in 1956 - the same year that McDonald's launched its first major franchising drive and America got its first shopping mall. Carl instinctively grasped that the car culture would change America; he saw what was coming. The star atop his drive-in sign became the mascot of his fast-food chain: a smiling star in little booties, holding a burger and a drink.
Other entrepreneurs across the country were starting their own fast-food chains. The fast-food business seemed risky, but the start-up costs were low. Anyone willing to work hard had a shot. William Rosenberg was an eighth-grade dropout who delivered messages for Western Union, drove an ice cream truck and then in 1946 opened a doughnut shop in Quincy, Massachusetts, that he would call Dunkin' Donuts ("You pluck a chicken," he said, "you dunk a doughnut"). Glen Bell was a former Marine in San Bernardino who ate at the new McDonald's and decided to copy it, using the assembly-line system to make Mexican food. His first Taco Bell opened in 1962. Thomas S. Monaghan, the founder of Domino's Pizza, spent his childhood in a Catholic orphanage and in a series of foster homes, got kicked out of school in the tenth grade, joined the Marines, bought a pizzeria for $900 in Ypsilanti, Michigan, in the early 1960s, and met his wife while delivering a pizza to her college dorm room.
For every fast-food idea that swept the nation, there were countless others that never caught on. There were chains with homey names like Sandy's, Carroll's, Henry's and Winky's. There were chains with futuristic names like the Satellite Hamburger System and Kelly's Jet System. Most of all, there were chains named after their main dish: Burger Chefs, Burger Queens, Burgerville USAs, Yumy Burgers, Twitty Burgers, Dundee Burgers, Biff Burgers, O.K. Big Burgers and Burger Boy Food-O-Ramas. Biff Burgers were "roto-broiled" beneath glowing quartz tubes that worked just like a space heater.
During the 1960s and early 1970s, the fast-food chains spread nationwide, opening near strip malls in the new commercial districts of the suburbs. Between 1968 and 1974, the number of McDonald's restaurants tripled. Wall Street began to invest heavily in the business, and many of the early fast-food pioneers gave way to corporate management. The hamburger wars in Southern California were especially fierce. One by one, the old drive-ins closed, unable to compete against inexpensive fast-food joints.
Carl Karcher opened Carl's Jr. restaurants up and down the state of California, locating them near freeway offramps. In 1976, the new corporate headquarters of Carl Karcher Enterprises were built on the same land in Anaheim where the Heinz farm had once stood. Carl Karcher now controlled the largest privately owned fast-food chain in the United States. His nickname was Mr. Orange County. He considered many notable Americans to be his friends, including Ronald Reagan, Richard Nixon, Art Linkletter, Lawrence Welk and Pat Boone. He was a benefactor of Catholic charities, a Knight of Malta, a strong supporter of pro-life causes. He attended private masses at the Vatican with the pope. And then, despite all the hard work, Carl's luck began to change.
During the 1980s, CKE went public and opened Carl's Jr. restaurants in Texas. The new restaurants fared poorly, and the value of CKE's stock fell. In 1988, Carl was charged with insider trading by the Securities and Exchange Commission. He had sold large blocks of CKE stock right before its price tumbled. He vehemently denied the charges but agreed to a settlement with the SEC and paid almost $1 million in fines. A few years later, some of Carl's real estate investments proved unwise. When new subdivisions in Anaheim and the Inland Empire went bankrupt, Carl was saddled with many of their debts. He suddenly owed more than $70 million to various banks. The falling price of CKE stock hampered his ability to repay those loans.
Carl searched for ways to save his company. He proposed selling Mexican food at Carl's Jr. restaurants, but a number of top executives at CKE opposed the plan. Carl thought that CKE was being run into the ground. It now felt like a much different company from the one he founded. A new management team had ended the longtime practice of starting every executive meeting with the prayer of St. Francis of Assisi and the pledge of allegiance. Carl insisted that his Mexican-food idea would work and demanded that the board of directors vote on it. When the board rejected the plan, Carl tried to fire its members.
Customers are drawn to familiar brands by an instinct to avoid the unknown. 'We cannot trust some people who are noncomformists', declared Ray Kroc, a founder of McDonald's. 'We will make conformists out of them in a hurry... The organisation cannot trust the individual; the individual must trust the organization....'
Instead, on October 1st, 1993, the board voted 5 to 2 to fire him. Only Carl and his son Carl Leo opposed the firing. Carl felt deeply betrayed. He had known many of the board members for years; he had made them rich. In a statement released after his dismissal, Carl described the board as "a bunch of turncoats" and called it "one of the saddest days" of his life. At the age of seventy-six, after more than five decades in the business, Carl N. Karcher was prevented from entering his own office, and new locks were put on the doors.
The headquarters of CKE are still located on the property where Margaret Heinz's family once grew oranges. Today there are no orange groves in sight. The population of Anaheim is now about 275,000, almost thirty times larger than it was in the years before World War II. On the corner where Carl's Drive-in Barbeque once stood, there's a strip mall. Near the CKE headquarters there's an Exxon station, a discount mattress store, a Shoe City, a Las Vegas Auto Sales store and an offramp of the Riverside Freeway. The CKE building has a modern, Spanish design, with white columns, red-brick arches and dark plate-glass windows. When I visited recently, it was cool and quiet inside. After passing a six-foot wooden statue of St. Francis of Assisi on a stairway landing, I was greeted at the top of the stairs by Carl N. Karcher.
Carl looked like a stylish figure from the big-band era, wearing a brown checked jacket, a brown tie and jaunty two-tone shoes. He was tall and strong, and seemed in remarkably good shape. The walls of his office were covered with plaques and mementos. He removed a framed object from the wall and handed it to me. It was the original receipt for $326 confirming the purchase of Carl's first hot dog cart.
Eight weeks after being locked out of his office in 1993, Carl engineered a takeover of the company. Through a complex series of transactions, a partnership headed by financier William P. Foley II assumed some of Carl's debts, received much of his stock in return and took control of CKE. Foley became the new chairman of the board. Carl was named chairman emeritus and got his old office back. Almost all of the executives who opposed him left the company. His Mexican-food plan was adopted and has proved a tremendous success. During the past few years, Carl's Jr. has become one of the nation's most profitable fast-food chains. The value of its stock has risen from about $7 a share to $46 a share. In July 1997, CKE purchased Hardee's for $327 million, thereby becoming the nation's fourth-largest hamburger chain. Carl's Jr. restaurants will soon open all over the country, and the little star in booties may become a national icon.
Carl seemed amazed by his own life story as he told it. He has been married to Margaret for fifty-eight years. He has lived in the same Anaheim house for forty-eight years. He has twenty granddaughters and twenty grandsons. He shares the genial optimism and good humor of his old friend Ronald Reagan. "My whole philosophy is: Never give up," he told me. "The word can't should not exist. . . . Have a great attitude. . . . Watch the pennies and the dollars will take care of themselves. . . . Life is beautiful, life is fantastic." Despite the recent growth of CKE, Carl remains millions of dollars in debt. He has secured new loans to pay off the old ones. During the worst of his financial troubles, advisers pleaded with him to declare bankruptcy. Carl refused; he'd borrowed more than $8 million from family and friends, and he would not walk away from his obligations. Every weekday he attends Mass at 6 a.m. and gets to the office by seven. "My goal in the next two years," he said, "is to pay off all my debts."
I looked out the window and asked how he felt driving through Anaheim today, with all of its fast-food restaurants and malls. "Well, to be frank about it," he answered, "I couldn't be happier." Thinking that he'd misunderstood the question, I rephrased it, asking if he ever missed the old Anaheim, the ranches and farms.
"No," he said.
Carl grew up on a farm without running water or electricity, and he had escaped a hard rural life. The view out his window was not disturbing to him, I realized. It was a mark of success. "Progress," Carl said. "I believe in progress. When I first met my wife, this road here was gravel . . . and now it's blacktop."
Driving through the neighborhoods of Colorado Springs often seems like passing through layers of sediment in rock, each one providing a snapshot of a different era. Downtown Colorado Springs still has an old-fashioned, independent spirit. An eclectic mixture of locally owned businesses lines Tejon Street, the main drag. The Chinook Bookshop is as independent as they come - the sort of literate and civilized bookstore being forced out of business nationwide. An old movie palace that locals call the Peak, refurbished with lots of neon, has a funky charm that could never be mass produced. When you leave downtown and drive northeast, however, you head toward a whole new world.
The north end of the city, near Colorado College, is full of old Victorian houses and mission-style bungalows from the early part of this century. Then come Spanish-style and adobe houses, which were popular between the world wars. Then come split-level colonials and ranch-style houses from the golden age of suburbia. Once you cross Academy Boulevard, you're engulfed by the hard, tangible evidence of what America became in the 1980s and 1990s.
Immense subdivisions with names like Sagewood, Summerfield and Fairfax Ridge blanket the land, thousands upon thousands of nearly identical houses - the architectural equivalent of fast food - covering the prairie without any respect for its natural forms, built on hilltops and ridge tops, just begging for a lightning strike, ringed by gates and brick walls and puny, newly planted trees that bend in the wind. The houses seem not to have been constructed by hand but manufactured by some gigantic machine. Roads end without warning, and sidewalks run straight into the prairie.
Both the physical and the cultural landscape of Colorado Springs seem up for grabs; it is the fastest-growing city in one of the nation's fastest-growing states. Since 1970, the population of the metropolitan area has increased from about 230,000 to about 500,000. Many of the people who have moved to the city once lived in Southern California. Longtime residents of Colorado Springs often complain that the town is being "Californicated." They blame recent arrivals for the new subdivisions, the rush-hour traffic and the fledgling youth gangs. Hewlett-Packard has come to the city from California, and so has Focus on the Family, one of the nation's richest conservative Christian groups. All of the wild, contradictory impulses of the American West are on display in this modern boomtown. The city has old hippies, environmentalists, a large gay community - and the headquarters of the state's anti-gay movement. It has twenty-nine Charismatic Christian churches and almost twice as many pawnbrokers; a Lord's Vineyard bookstore and a First Amendment adult bookstore; a Christian Medical and Dental Society, and a Holey Rollers tattoo and body-piercing parlor.
A century ago, Colorado Springs was a playground for the wealthy, nicknamed Little London, populated by the offspring of Eastern financiers, penniless aristocrats and miners who'd struck it rich in nearby Cripple Creek. Until recently the local economy was for the most part dependent upon tourism and the military. In addition to the Cheyenne Mountain Operations Center, Colorado Springs is surrounded by installations belonging to the Air Force, the Army and the U.S. Space Command. The advanced communication networks installed to serve the military and the high-tech nature of the local air bases have encouraged computer manufacturers, telemarketers and software companies to locate in the city. The quality of life is a big draw, as is the local attitude toward labor. A publication distributed by the chamber of commerce notes that among the city's private-sector manufacturing and office workers, the rate of union membership is 0.0 percent.
The restaurant industry is now the largest private employer in the state of Colorado - as it is in the rest of the country. In Colorado Springs, the restaurant industry has grown at a much faster rate than the city's population. In 1968, Colorado Springs had a total of twenty chain restaurants. Today it has twenty Pizza Huts and twenty-one McDonald's.
The McDonald's Corp. has used Colorado Springs as a test site for some of its latest restaurant technology. Steve Bigari, who owns five McDonald's restaurants in town, showed me the new contraptions at his place on Constitution Avenue. It is a rounded, postmodern McDonald's in a year-old shopping center on the eastern edge of the city. The drive-thru lanes have automatic sensors buried in the concrete to monitor the progress of traffic. Robotic drink dispensers select the proper-size cups, fill them with ice and then fill them with soda. Ketchup dispensers powered by compressed carbon-dioxide gas shoot out uniform spurts of red liquid. An elaborate machine empties frozen french fries from a white plastic bin into wire-mesh containers for frying, dumps the containers into hot oil, lifts them a few minutes later, shakes them, lowers them back into the oil until the potatoes are perfectly cooked, and then dumps them under heat lamps, ready to be served. Computer screens in the kitchen instantly display the customer's order. And advanced computer software not only assigns food orders to various workers in order to maximize efficiency but also predicts future orders on the basis of ongoing customer flow. Bigari was cordial, good-natured, passionate about his work, proud of the new devices. He told me the new software brought the "just in time" production philosophy of Japanese automobile plants to the fast-food business - a philosophy that McDonald's has renamed Made for You. As he demonstrated one contraption after another - including a wireless, handheld menu that uses radio waves to transmit hamburger orders - a group of construction workers across the street put the finishing touches on a new subdivision called Constitution Hills. Streets in the subdivision have patriotic names, and the cattle ranch down the road was for sale.
The business historian Alfred D. Chandler believed that a high rate of "throughput" is the most important aspect of a mass-production system. A factory's throughput is the speed and volume of its flow - a much more important measurement, Chandler argued, than the number of workers it employed or the value of its machinery. With innovative technology and the proper organization, a small number of workers could produce an enormous amount of goods inexpensively. Throughput is all about velocity and speed, about doing things faster in order to make more. Although the McDonald brothers had never encountered the term or studied "scientific management," they grasped the underlying principles. The fast-food industry's obsession with throughput has turned kitchens into small factories, changed the way millions of Americans work and transformed familiar foods into commodities that are manufactured. At Burger King restaurants, frozen hamburger patties are placed on a conveyor belt and emerge from a broiler ninety seconds later, fully cooked. The ovens at Pizza Hut and at Domino's also use conveyor belts to ensure a standardized cooking time. The ovens at McDonald's look like commercial laundry presses, with big steel hoods that swing down and grill hamburgers on both sides at once. The only fresh ingredients at most fast-food restaurants are the salad greens, the tomatoes and some toppings. At Taco Bell, the beef arrives frozen and precooked in vacuum-sealed plastic bags. The beans are dehydrated and look like brownish cornflakes. The cooking process is simple. "Everything's 'add water,' " a Taco Bell employee told me. "Just add hot water."
Although Richard and "Mac" McDonald introduced the division of labor to the restaurant business, it was a McDonald's executive named Fred Turner who created an operating system of unusual thoroughness and attention to detail. In 1958, Turner put together an operations-and-training manual for the company that was seventy-five pages long, specifying how almost everything should be done. Hamburgers were always to be placed on the grill in six neat rows; french fries had to be exactly 0.28 inches thick. The McDonald's operations manual today has ten times the number of pages and weighs about four pounds. Known within the company as "the Bible," it contains precise instructions on how various appliances should be used, how each item on the menu should look and how employees should greet customers. Operators who disobey these rules can lose their franchises.
The regimentation and standardization at fast-food restaurants gives managers an enormous amount of power over their employees. "When management determines exactly how every task is to be done . . . and can impose its own rules about pace, output, quality and technique," the sociologist Robin Leidner has noted, "[it] makes workers increasingly interchangeable." The management no longer relies upon the talents or skills of its workers - those things are built into the operating system and machines. Jobs that have been "de-skilled" can be filled cheaply. The need to retain any individual worker is greatly diminished by the ease with which he or she can be replaced.
Fast-food employees are the largest group of low-paid workers in the United States today. The nation has about a million farm workers, who earn an average of $5.58 an hour - and 2.5 million fast-food workers, who earn an average of $5.74 an hour. Although picking strawberries is far more difficult than cooking french fries, both jobs are filled by people who are generally young and unskilled. Moreover, the turnover rates for both jobs are among the highest in the American economy. The annual turnover rates in the fast-food industry now range from 200 percent to 400 percent, meaning that the typical fast-food worker quits or is fired in three to six months.
Teenagers have long provided the fast-food industry with most of its work force. The industry's rapid growth coincided with the baby-boom expansion of that age group. Teenagers were in many ways the ideal candidates for such jobs. Since most teenagers still lived at home, they could afford to work for wages too low to support an adult, and until recently their limited skills attracted few other employers. A job at a fast-food restaurant became an American rite of passage, a first job soon left behind for better things. The flexible terms of employment in the fast-food industry also attracted many housewives who needed extra income. As the number of baby boomers declined, the fast-food companies began to recruit other marginalized workers: recent immigrants, the elderly and the handicapped.
The fast-food industry has created millions of new jobs at a time when other businesses have been firing workers. It now employs some of the poorest, most disadvantaged members of American society. It often teaches basic job skills to people who can barely read, whose lives have been chaotic or shut off from the mainstream. But the fast-food industry's attitude toward unions, overtime pay and the minimum wage suggests that its motives in employing the poor and the handicapped are not entirely altruistic.
The McDonald's Corp. insists that its operators follow directives on food preparation, purchasing, store design and countless other minute details. When it comes to labor practices, however, the company's policy is strongly laissez faire. This allows operators to set wages according to local labor markets - and it absolves the McDonald's Corp. of direct responsibility for roughly three-quarters of the company's work force. McDonald's' decentralized hiring practices and the high turnover rate at its restaurants have helped thwart efforts to organize the company's workers. Whenever unions have threatened to overcome these obstacles, the McDonald's Corp. has suddenly shown tremendous interest in the well-being of these workers.
The restaurant industry is now the largest private employer in the state of Colorado - as it is in the rest of the country. In Colorado Springs, the restaurant industry has grown at a much faster rate than the city's population. In 1969, it had a total of twenty chain restaurants. Today it has twenty Pizza Hits and twenty-one McDonald's.
During the late 1960s and early 1970s, McDonald's organized a "flying squad" of experienced managers who were sent to a restaurant the moment that the company suspected union activity. The group was led by John Cooke, McDonald's' head of labor relations. According to author John F. Love, "Cooke's job was to keep the unions out." Some employees were forced to take lie-detector tests, allegedly to root out union sympathizers. Cooke confronted union organizers on 400 separate occasions and defeated them every time. Robert Beavers, a longtime McDonald's executive and board member, acknowledged that the flying squad's efforts in the early 1970s prevented unions from gaining a foothold at the company.
In April of this year, workers at a McDonald's in Macedonia, Ohio, went on strike for five days. Led by Bryan Drapp and Jamal Nickens, two college students employed at the restaurant, the workers demanded better pay and protested the behavior of an assistant manager with a banner that read, "Did Somebody Say Unqualified Management?" After the leader of a Teamsters union in Cleveland expressed support for the strikers, the owner of the McDonald's agreed to most of the workers' demands. Drapp and Nickens later attempted to help unionize the restaurant, without success. The two were fired in June after arriving for work with the word union painted on their faces.
The federal Fair Labor Standards Act mandates that employees who work forty hours a week must be paid overtime for any additional hours. Few employees in the fast-food industry qualify for overtime - and even fewer are paid it. Roughly ninety percent of all fast-food workers are crew members. They are paid an hourly wage, scheduled to work as needed and often sent home during slow periods. Managers try hard to make sure that crew members work less than forty hours a week, thereby avoiding overtime payments. A small number of fast-food employees are paid regular salaries. At a hamburger restaurant with sixty-five workers, perhaps four or five have a contract and fixed terms of employment. They usually receive medical benefits and participate in some form of profit sharing. They have an opportunity to rise up the corporate ladder. But they also work long hours for low pay. A little-known provision of the Fair Labor Standards Act excludes "executives" from receiving overtime. Fast-food assistant managers have for years been classified as executives, despite the fact that much of their work involves preparing food, serving customers and mopping the floors alongside their employees. According to Marc Linder, a professor at the University of Iowa Law School who specializes in labor-law issues, fast-food assistant managers working sixty to seventy hours a week may actually earn a lower hourly wage than some of their own crew members. A promotion may be the eventual reward for such hard work; yet most assistant managers will never receive that promotion.
A class-action suit was filed against Taco Bell in October 1996 by 800 of its former and present restaurant managers in California. The suit contended that managers were routinely forced to perform nonsupervisory tasks, to work fifty to seventy hours a week without overtime and to destroy employment records as a matter of company policy. It also alleged that Taco Bell threatened to fire managers who sought to be paid for their overtime hours and encouraged the hiring of illegal aliens to control costs. In 1997, Taco Bell agreed to pay eligible managers for any uncompensated work.
Alan B. Krueger, a professor of economics and public affairs at Princeton University, estimates that one-quarter of the workers in the restaurant industry are paid the minimum wage - a higher proportion than in any other American industry. Between 1968 and 1990, the years of the fast-food industry's rapid expansion, the real value of the federal minimum wage declined by almost fifty percent. Despite the U.S. minimum wage's recent increase to $5.15 an hour, its real value is still twenty-seven percent lower than it was in 1968. Nevertheless, the National Restaurant Association strongly opposes any increase of the minimum wage at the federal, state or local level. The organization has joined with other business groups, such as the U.S. Chamber of Commerce, to fight against any new minimum-wage legislation in Congress. According to a survey in Nation's Restaurant News, an industry trade publication, the average corporate-executive salary in the restaurant industry increased by roughly nine percent last year, while the average corporate-executive bonus rose by twenty percent to reach $131,000. Restoring the federal minimum wage to its 1968 level would add less than a dime to the cost of a fast-food hamburger.
In southern Colorado, the average worker earns about $25,000 a year; the average restaurant worker earns about a third of that amount. Almost every fast-food restaurant in Colorado Springs has a banner or a sign that says, now hiring. The competition between chains has led to price wars. Fast-food operators have little control over their fixed costs: their leases, franchise fees and purchases from company-approved suppliers. As a result, they are under constant pressure to keep wages as low as possible. From opening time until early afternoon, most of the fast-food workers appear to be immigrants, high school dropouts, middle-aged housewives and senior citizens. After that the work force behind the counter seems entirely adolescent, with teenagers taking orders, manning the grills and collecting plastic trays late into the night.
Jane Trogdon is a guidance counselor at Harrison High School, which is located near the interstate on the south side of town. She has worked at Harrison since 1968 and has observed some significant changes in the daily lives of its students. They are much poorer today and much more likely to be employed for long hours after school, mainly at fast-food restaurants. About sixty percent of the students at Harrison High come from low-income families. "More of our students now feel that they need to work in order to help their families and to help themselves," Trogdon said, "buying clothes, a car or things for their younger sisters and brothers." Although much has been written about the entry of women into the work force during the 1980s, less attention has been paid to the effects of declining American wages on the nation's young people. Trogdon worries about the consequences of working six- or seven-hour shifts after school. The academic performance of these kids is bound to suffer. About a third of the students at Harrison High now attend trade school, college or beauty school after graduation; the other two-thirds join the military or go to work.
There is also the issue of workplace safety. The most common workplace injuries at fast-food restaurants are minor burns from the fryers, broilers and grills. The industry's expansion, however, has coincided with a rising incidence of workplace violence in the United States. In 1996, more than twice as many salesclerks, cashiers and retail managers were killed on the job than police officers. Many of the features that make fast-food restaurants so convenient - such as their locations near highway offramps - also make them attractive targets for armed robbery. The same demographic group that is widely employed at fast-food restaurants is also responsible for much of the nation's violent crime. A robbery is most likely to occur early in the morning when the restaurant is empty or late at night near closing time. Employees are usually herded into the freezer; then robbers empty the cash registers and the safe, and hit the road.
The 1984 massacre at a McDonald's restaurant in San Ysidro, California, received nationwide attention. Twenty-one people were killed by a lone gunman, and McDonald's later donated the property to the local community. But crime and fast food have become so ubiquitous in American society that their all-too-frequent combination often goes unnoticed. In just the past couple of years: Armed robbers struck nineteen McDonald's and Burger King restaurants along Interstate Eighty-five in Virginia and North Carolina. A former cook at Shoney's was arrested in Nashville, suspected of being a fast-food serial killer who had murdered as many as fifteen people, including employees at McDonald's, Shoney's, Baskin-Robbins, Captain D's and Brown's Chicken & Pasta. A dean at Texas Southern University was shot and killed during a carjacking in the drive-thru lane of a Kentucky Fried Chicken in Houston. The manager of a Wal-Mart McDonald's in Durham, North Carolina, was shot during a robbery by two masked assailants. A nine-year-old girl was killed during a shootout between a robber and an off-duty police officer waiting in line at a McDonald's in Barstow, California. A twenty-year-old manager was killed during an armed robbery at a Sacramento, California, McDonald's. The manager had recognized one of the robbers, a former McDonald's employee; it was the manager's first day in the job. After being rejected for a new job at a McDonald's in Vallejo, California, a former employee shot three women who worked at the restaurant; one of the women was killed; the murderer left the restaurant laughing. And in Colorado Springs, a jury convicted a former employee of first-degree murder for the execution-style slayings of three teenage workers and a female manager at a Chuck E. Cheese restaurant. The killings took place in Aurora, Colorado, at closing time, and police later arrived to find a macabre scene. The bodies lay in an empty restaurant as burglar alarms rang, game lights flashed, a vacuum cleaner ran and Chuck E. Cheese mechanical animals continued to perform children's songs.
The American restaurant industry is now preoccupied with labor issues. Surveys of owners and managers consistently find that workers are their greatest source of worry. At the thirty-eighth annual Multi-Unit Food-Service Operators Conference, held last October in Los Angeles, the theme was "People: The Single Point of Difference." Most of the 1,400 attendees were chain-restaurant operators and executives. The ballroom at the Century Plaza Hotel was filled with men and women in expensive business suits, a well-to-do group whose members looked as though they hadn't grilled a burger or mopped a floor in a while. The conference workshops had names like "Dual Branding: Case Studies From the Field" and "Segment Marketing: The Right Message for the Right Market." Awards were given for the best television and radio ads. A restaurant chain was selected Operator of the Year. Food-service companies filled a nearby exhibition space with their latest products: dips, toppings, condiments, high-tech ovens, breaded cheese sticks, the latest in pest control. The leading topic of conversation in the meeting rooms, hallways and hotel bars was how to find inexpensive workers in an American economy in which unemployment had fallen to a twenty-four-year low.
James C. Doherty, publisher of Nation's Restaurant News and the organizer of the event, gave a speech urging the restaurant industry to move away from a reliance on a low-wage work force with high levels of turnover and to promote labor policies that would create long-term careers in food service. How can workers look to this industry for a career, he asked, when it pays them the minimum wage and provides them no health benefits? Doherty's suggestions received polite applause.
The keynote speech was given by David Novak, vice chairman and president of Tricon Global Restaurants. His company operates more restaurants than any other company in the world - 30,000 Pizza Huts, Taco Bells and Kentucky Fried Chickens. A former advertising executive with a boyish face and the earnest delivery style of a motivational speaker, Novak charmed the crowd. He talked about the sort of recognition his company tries to give its employees: the pep talks, the prizes, the special awards of plastic chili peppers and rubber chickens. He believed the best way to motivate people is to have fun. "Cynics need to be in some other industry," he said. Employee awards create a sense of pride and esteem, they show that management is watching, and they do not cost a lot of money. "We want to be a great company for the people who make it great," Novak announced. Other speakers talked about teamwork, empowering workers and making it "fun."
During the President's Panel, the real sentiments of the assembled restaurant operators and executives became clear. Norman Brinker - a legend in the industry, the founder of Bennigan's and Steak and Ale, and the current owner of Chili's - spoke to the conference in language that was simple, direct and free of platitudes. "I see the possibility of unions," he warned. The thought "chilled" him. He asked his listeners to support the industry's lobbying groups, the National Restaurant Association and the Employment Policy Institute.
"And [Senator] Kennedy's pushing hard on a $7.25 minimum wage," he continued. "That'll be fun, won't it? I love the idea of that. I sure do - strike me dead!" As the crowd applauded Brinker's call to fight against unions and the government, the talk about teamwork fell into the proper perspective.
Your Trusted Friend
Ray Kroc was the man who took the McDonald brothers' Speedee Service System and turned it into a fast-food empire. Kroc was not a button-down corporate executive. He was a high school dropout and jazz musician who played the piano at speakeasies and, on one occasion, at a bordello. He was funny, charismatic and indefatigable. Most of all, he was a brilliant salesman and promoter. Born in 1902 and raised in Oak Park, Illinois, Kroc worked at his uncle's soda fountain as a high school freshman. The job taught him the joy of selling. "That was where I learned you could influence people with a smile and enthusiasm," he recalled in his autobiography, Grinding It Out, "and sell them a sundae when what they'd come for was a cup of coffee." He left school a year later, served in a World War I ambulance corps with Walt Disney, returned home and became a traveling salesman. Over the years, Kroc sold ribbon novelties, paper cups, Florida real estate, low-fat malted-milk powder and a table-and-bench combination that folded into the wall like an ironing board. He used the same basic technique to sell all of these products: "I'd learn what the buyer's taste was and sell to it." He was selling milkshake mixers in 1954 when he first visited the McDonalds' San Bernardino restaurant. The brothers were two of his best customers. They were satisfied with their wealth and had little ambition to work harder for more. Kroc saw their restaurant "through the eyes of a salesman" and dreamed of putting a McDonald's at intersections across the country. Like his friend and fellow Midwesterner Walt Disney, Ray Kroc had an obsessive concern for cleanliness and control, created an American institution out of the optimistic ethos of postwar Southern California and brilliantly marketed products to the parents of young children.
In the early years of McDonald's, the company could not afford national advertising. Kroc used his talents as a promoter to charm reporters. His feelings about McDonald's developed an almost religious intensity, helping to convey a powerful, well-defined sense of the brand. McDonald's was to remain a place for children and families. Kroc soon discovered an effective way of bolstering McDonald's' family image and simultaneously getting free publicity. The company began to link itself with various charities, especially those involving children. Fred Turner, the executive who put together the McDonald's operations manual, later admitted that the company's early charitable work had a hidden agenda. "We got into it for very selfish reasons," Turner said to author John F. Love. "It was an inexpensive, imaginative way of getting your name before the public and building a reputation to offset the image of selling fifteen-cent hamburgers. It was probably ninety-nine percent commercial." Over the last three decades, the well-known Ronald McDonald House Charities have provided housing for more than 2 million families of seriously ill children. The concept was developed by a Philadelphia advertising agency in 1974.
Ray Kroc innately understood that the marketing of his company was as important as the food it sold. "A child who loves our TV commercials," he explained, "and brings her grandparents to a McDonald's gives us two more customers." McDonald's now runs dozens of radio and television ads every day in major American markets. The fast-food industry as a whole spends about $4 billion a year on advertising.
In addition to children, companies today aim many of their ads at "heavy users" - men between the ages of eighteen and twenty-four, who often eat fast food three or four times a week. The wry and ironic Jack in the Box ads featuring Jack, the violent Del Taco ads and the Carl's Jr. ads with sauce dripping onto a beautiful woman's dress have been extremely popular within this key demographic group. Companies are also increasing the size of their portions to attract heavy users. Hardee's offers the Monster Burger, Burger King sells the Big King, McDonald's is introducing the Big Xtra, and Little Caesar's gets right to the point, describing its pizzas as "Big! Big!" The Monster Burger contains a half pound of beef, three slices of cheese and eight strips of bacon.
The competition for young customers among the fast-food chains has led to a wide range of marketing alliances. McDonald's has joint promotions with the National Basketball Association and the Olympics. Tricon Global Restaurants has a three-year deal with the National Collegiate Athletic Association. Pizza Hut has linked with Discovery Zone, a chain of children's play centers. Burger King and the children's network Nickelodeon, Subway and The Simpsons, Denny's and Major League Baseball, McDonald's and the Fox Kids Network have all signed agreements that will mix fast-food advertising with children's entertainment. America's fast-food culture has become indistinguishable from the popular culture of its children.
In May 1996, the Walt Disney Co. signed a ten-year global-marketing agreement with the McDonald's Corp. A few months later, Disney hired a former Burger King executive to run its film-marketing division. The deal with McDonald's followed a decade in which toys inspired by Disney films proved extraordinarily successful at attracting children to fast-food restaurants. The target audience for these promotions is children between the ages of two and seven. According to the Los Angeles Times, the budget for the Disney film George of the Jungle doubled after the alliance with McDonald's was signed. The script was rewritten to include a scene in which the lead character eats a Big Mac, and a representative from McDonald's visited the set to ensure that the hamburger was properly displayed.
Confidential documents from a recent McDonald's advertising campaign reveal some of the thinking behind fast-food marketing today. The McDonald's Corp. was facing a long list of problems. "Sales are decreasing," one memo notes. "People are telling us Burger King and Wendy's are doing a better job of giving . . . better food at the best price," another warns. Consumer research indicated that future sales were at risk. "More customers are telling us," an executive wrote, "that McDonald's is a big company that just wants to sell . . . sell as much as it can." An emotional connection to McDonald's that customers had formed "as toddlers" was now eroding. The new advertising had to make people feel that McDonald's still cared about them. "The challenge of the campaign," wrote a company vice president, "is to make customers believe that McDonald's is their 'Trusted Friend.' "
According to these documents, the marketing alliances with other brands are intended to create positive feelings about McDonald's, making consumers associate one thing they like with another. Ads would link the company's french fries "to the excitement and fanaticism people feel about the NBA." The feelings of pride inspired by the Olympics would be used in ads to help launch a new hamburger with more meat than the Big Mac. The link with the Walt Disney Co. is considered by far the most important, designed to "enhance perceptions of Brand McDonald's." A memo seeks to explain the underlying psychology behind many visits to McDonald's: Parents take their children to McDonald's because they "want the kids to love them. . . . It makes them feel like a good parent." Purchasing something from Disney is the "ultimate" way to make kids happy, but it is too expensive to do every day. The advertising needed to capitalize on these feelings, letting parents know that "only McDonald's makes it easy to get a bit of Disney magic." The ads would be aimed at "minivan parents" and would carry an unspoken message about taking your children to McDonald's: "It's an easy way to feel like a good parent."
The fundamental goal of the "My McDonald's" campaign stemming from these proposals is to make a customer feel that McDonald's "cares about me" and "knows about me." A corporate memo introducing the campaign explains: "The essence McDonald's is embracing is 'Trusted Friend.' . . . 'Trusted Friend' captures all the goodwill and unique emotional connection customers have with the McDonald's experience. . . . [Our goal is to make] customers believe McDonald's is their 'Trusted Friend.' Note: This should be done without using the words 'Trusted Friend.' . . . Every commercial [should be] honest. . . . Every message will be in good taste and feel like it comes from a trusted friend." The words trusted friend were never to be mentioned in the ads because doing so might prematurely "wear out a brand essence" that could prove valuable in the future for use among different national, ethnic and age groups. Despite McDonald's' faith in its trusted friends, the opening page of this memo says in bold red letters: "Any unauthorized use or copying may lead to civil or criminal prosecution."
Matthew Kabong glides his '83 Buick LeSabre through the streets of Pueblo, Colorado, at night, looking for a trailer park called Meadowbrook. Two Little Caesar's pizzas and a bag of Crazy Bread sit in the back seat. "Welcome to my office," he says, reaching down, turning up the radio and playing some mellow rhythm & blues. Kabong delivers pizzas four or five nights a week and earns the minimum wage, plus a dollar for each delivery, plus tips. On a good night he makes about fifty bucks. We cruise past block after block of humble little houses, whitewashed and stucco, built decades ago, with pickup trucks in the driveways and children's toys on the lawns. Pueblo is the southernmost city along the front range, forty miles from Colorado Springs, but for generations a world apart, largely working-class and Latino, a union town with steel mills that was never chic like Boulder, bustling like Denver or aristocratic like Colorado Springs. No one ever built a polo field in Pueblo, and snobs up north still like to call it "the asshole of Colorado."Kabong was born in Nigeria and raised in Atlanta. He's twenty-nine years old, studies electrical engineering at a local college and hopes to own a Radio Shack someday. We turn a corner and find Meadowbrook. All the trailers look the same, slightly ragged around the edges, lined up in neat rows. Kabong parks the car, and when the headlights and radio shut off, the street feels empty and dark. Then somewhere a dog barks, the door of a nearby trailer opens, and light spills onto the gravel driveway. A little white girl with blond hair, about seven years old, smiles at this big Nigerian bringing pizza, hands him fifteen dollars, takes the food and tells him to keep the change. Behind her there's movement in the trailer, a glimpse of a tidy kitchen, the flickering shadows of a television.
The wide gulf between Colorado Springs and Pueblo - a long-standing social, cultural, political and economic division - is starting to narrow. As you drive around the streets of Pueblo, you can feel the change coming, something palpable in the air. Throughout the 1980s, the unemployment rate in Pueblo hovered at about twelve percent, steel mills closed and nothing new was built. New things now seem to appear every month: an Applebee's, a Lone Star Steakhouse & Saloon, an Olive Garden, movie theaters, a Home Depot. The subdivisions are creeping south from Colorado Springs along the interstate, turning cattle ranches into acres of ranch-style homes. Pueblo has not boomed yet; it seems right on the verge, about to become more like the rest, to be remolded. A recent strike at the city's last steel mill ended with all the strikers being fired and then replaced by scabs from out of state. The Oregon Steel Co. broke the local union, once and for all. Out of about 1,500 steel workers who went on strike in Pueblo, less than 150 got their old jobs back. The rest are out of work, out of luck, and the scabs are doing just fine.
The Little Caesar's where Kabong works is in the Belmont section of town, across the street from a Dunkin' Donuts and not far from the University of Southern Colorado campus. The small square building that the Little Caesar's occupies used to house a Godfather's Pizza and, before that, a Dairy Bar. The restaurant has half a dozen brown Formica tables, red-brick walls, a gumball machine near the counter, white-and-brown-flecked linoleum floors. The place is clean but has not been redecorated for years. The customers who drop by or call for pizza are students, people with large families, ordinary working people and the poor. Little Caesar's pizzas are large and inexpensive, often providing enough food for a few meals.
Five crew members work in the kitchen, putting toppings on pizzas, putting the pizzas in the oven, getting drinks, taking orders over the phone. Marisio, a nineteen-year-old kid with two kids of his own, slides a pizza off the old Blodgett oven's conveyor belt. He makes $6.50 an hour. Adam, another driver, waits for his next delivery, wearing a yellow Little Caesar's shirt that says think big! Dave Feamster, the owner of the restaurant, seems completely at ease behind the counter, hanging out with his Latino employees and customers - but at the same time he seems completely out of place here.
Feamster was born and raised in a working-class neighborhood of Detroit. He grew up playing in youth-hockey leagues and later attended college in Colorado Springs on an athletic scholarship. He was an all-American during his senior year, a defenseman picked by the Chicago Black Hawks in the college draft. After graduating from Colorado College with a degree in business, Feamster played in the National Hockey League. The Black Hawks reached the playoffs during his first three years on the team, and Feamster got to play against some of his idols, like Wayne Gretzky and Mark Messier.
On March 14th, 1984, Feamster was struck from behind by Paul Holmgren during a game with the Minnesota North Stars. Feamster never saw the hit coming and slammed into the boards headfirst. He felt dazed but played the rest of the game. Later, in the shower, his back started to hurt. An X-ray revealed a stress fracture of a bone in his lower back. For the next three months, Feamster wore a brace that extended from his chest to his waist. The cracked bone didn't heal. At practice sessions the following autumn, he didn't feel right. The Black Hawks wanted him to play, but a physician at the Mayo Clinic examined him and said, "If you were my son, I'd say, 'Find another job; move on. . . .' " Feamster worked out for hours at the gym every day, trying to strengthen his back. He lived with two other Black Hawks players. Every morning the three of them would eat breakfast together, then his friends would leave for practice and Feamster would find himself just sitting there at the kitchen table.
The Black Hawks never gave him a goodbye handshake or wished him good luck. He wasn't even invited to the team Christmas party. They paid off the remainder of his contract, and that was it. He floundered for a year, feeling totally lost. He had a business degree but had spent most of his time in college playing hockey. He didn't know anything about business. He enrolled in a course to become a travel agent. He was the only man in a classroom full of eighteen- and nineteen-year-old women. After three weeks, the teacher asked to see him after class. He went to her office, and she said: "What are you doing here? You seem like a sharp guy. This isn't for you." He dropped out of travel-agent school that day. He drove around aimlessly, listening to a Bruce Springsteen tape and wondering what the hell to do.
At a college reunion in Colorado Springs, an old friend suggested that he become a Little Caesar's franchisee. Feamster had played on youth-hockey teams in Detroit with the sons of the company's founder. He was too embarrassed to call them and ask for help. His friend dialed the phone. Within weeks, Feamster was washing dishes and making pizzas at Little Caesar's restaurants in Chicago and Denver. It felt a long, long way from the NHL. Before gaining the chance to own a franchise, he had to spend months learning every aspect of the business. At first he wondered whether this was a good idea. The Little Caesar's franchise fee was $15,000, almost all the money he had left in the bank.
Becoming a franchisee is an odd combination of starting your own business and going to work for someone else. Franchising schemes have been around in one form or another for more than a century. It was the fast-food industry, however, that turned franchising into a business model that would transform the retail economy of the United States. At the heart of a franchise arrangement is the desire by two parties to make money while avoiding risk. The franchiser wants to expand an existing business without spending its own funds. The franchisee wants to run a business without going it alone and risking everything on a new idea. One provides a brand name, a business plan, expertise, access to equipment and supplies. The other puts up the money and does the work. During the 1950s, franchising provided an effective means for fast-food chains - an entirely new form of business - to quickly expand using other people's money. Traditional methods of raising capital were not easily available to the founders of these chains, the dropouts and drive-in owners who lacked "proper" business credentials.
The relationship has its built-in tensions. The franchiser gives up some control by not wholly owning each operation; the franchisee sacrifices a great deal of independence by obeying the company rules. Everyone is happy when the profits are rolling in, but when revenues fall, the arrangement often degenerates into a mismatched battle for power. The franchiser almost always wins.
The franchise agreement that Dave Feamster signed gave him the right to open Little Caesar's restaurants in the Pueblo, Colorado, area. In addition to the franchise fee, he had to promise the company five percent of his revenues and contribute an additional four percent to an advertising pool. Most Little Caesar's franchisees have to supply the capital for the purchase or construction of their own restaurants. Since Feamster did not have the money, the company gave him a loan. Before ever selling a single pizza, he was $200,000 in debt.
Although Feamster had spent four years in college at Colorado Springs, less than an hour away, he'd never visited Pueblo. He rented a small house near his new restaurant, in a neighborhood full of steelworkers, the sort of neighborhood where he'd grown up. He expected to stay there for just a few months but wound up living there alone for six years, pouring all his energy into his business. He opened the restaurant every morning and closed it at night, delivered pizzas, took the receipts to the bank. His lack of experience in the restaurant business was balanced by his skill at getting along with all sorts of different people. When an elderly customer phoned him and complained about the quality of a pizza, Feamster listened patiently, appreciated her concern and hired her to handle future customer complaints.
It took Feamster three years to pay off his initial debt. Today he owns five Little Caesar's restaurants, three in Pueblo and two in the nearby small towns of La Junta and Lamar. His annual revenues are about $2.5 million. He employs fifty-three people, five of them full time. He earns a good income but lives modestly and without pretension. When I visited a restaurant operated by a rival pizza chain, the company flew a publicist from New York to Colorado Springs to accompany me at all times. Feamster gave me free rein to interview his employees in private and to poke around his business for as long as I liked. He said there was nothing to hide. His small office behind the Belmont store, however, is in an advanced state of disarray, crammed with stacks of sagging banker's boxes. While his competitors use computerized operating systems that take a customer's order and instantaneously display it on television monitors in the kitchen, Feamster's restaurants remain firmly planted in the era of ballpoint pens and yellow paper receipts. He worries that Papa John's will soon enter his area. Papa John's is one of the fastest-growing fast-food chains in the country, selling deluxe pizzas from shiny new stores. The Little Caesar's chain has been losing market share for the past few years. Feamster's continued success now depends largely on how his employees treat his customers every day.
Feamster has established roots in the local community. His girlfriend is a fifth-generation native of Pueblo, a schoolteacher. He's coached local youth-hockey leagues for years. And he recently helped to organize the city's first high school hockey team, which is composed of players from all the schools in the district. Feamster paid for their uniforms and equipment, and serves as assistant coach. The majority of the players are Latino, from the sort of backgrounds that do not have a long and illustrious tradition on the ice. The team's record last year against Colorado Springs high schools, which have popular and well-established hockey programs, was 10-6.
Fourteen of Feamster's employees meet at the Belmont store around seven o'clock on a Tuesday morning. Feamster has tickets to an event called Peter Lowe's Success at the McNichols Sports Arena, in Denver. It starts at 8:15 in the morning, runs until six in the evening and features a dozen guest speakers, including Henry Kissinger, Barbara Bush and former British Prime Minister John Major. The event is being sponsored by a group called Peter Lowe International, the Success Authority. The tickets cost Feamster ninety dollars each. He's rented a van and given these employees the day off. He doesn't know exactly what to expect from the event but hopes to provide a day to remember. Feamster wants his young workers to see that "there's a world out there beyond the south side of Pueblo."
The parking lot at the McNichols Arena is jammed. The event has been sold out for days. Men and women leave their cars and walk briskly toward the arena. There's a buzz of anticipation. Public figures of this stature don't appear in Denver every week. The arena is filled with 18,000 people, and almost every single one of them is white, clean-cut and prosperous. They are small-business owners, salespeople, middle managers. In the hallways and corridors where you'd normally buy hot dogs and Denver Nuggets memorabilia, Peter Lowe's Success Yearbook is being sold for $19.95, American Sales Leads on CD-ROM are available for $375, and Zig Ziglar is offering Secrets of Closing the Sale (a twelve-tape collection) for $120 and Everything of Zig's (forty-seven tapes, five books and eleven videos) for the discount price of $995.
Peter Lowe has been staging these large-scale events since 1991. He's a thirty-nine-year-old Canadian "success authority" with a home in Tampa, Florida. His parents were Anglican missionaries who gave up the material comforts of middle-class life in Vancouver to work among the poor of India and Pakistan. Lowe was raised in Mussoorie, India, but he chose a different path. In 1981, he quit his job as a computer salesman and organized his first "success seminars." The appearance of Ronald Reagan at one of these events soon encouraged other celebrities to endorse Peter Lowe's work. In return he pays them a fee of between $30,000 to $50,000 for a speech - for about half an hour of work. Among those who've recently joined Lowe onstage are George Bush, Oliver North, Barbara Walters, Mikhail Gorbachev, Colin Powell, Charlton Heston, Dr. Joyce Brothers and Mario Cuomo.
Rachel Vasquez, the manager of the Belmont Little Caesar's, can hardly believe that she's sitting among so many people who own their own businesses, among so many executives in suits and ties. The Little Caesar's employees have seats just a few yards from the stage. They've never seen anything like this. Although the arena is huge, it seems as though these fourteen fast-food workers from Pueblo can almost reach out and touch the famous people onstage.
"You are the elite of America," Brian Tracy, author of The Psychology of Selling, tells the crowd. "Say to yourself: 'I like me! I like me! I like me!' " He is followed by Henry Kissinger, who tells some foreign-policy anecdotes. And then Peter Lowe's attractive wife, Tamara, leads the audience in a dance contest; the winner gets a free trip to Disneyland. Four contestants climb onstage and dozens of beach balls are tossed into the crowd as the sound system blasts the Beach Boys' "Surfin' USA." Thousands of people start dancing and bouncing the striped balls into the air. Barbara Bush is next, arriving to "Fanfare for the Common Man," her smile projected onto two gigantic television screens. She tells a story that begins, "We had the whole gang at Kennebunkport. . . ."
When Peter Lowe arrives, fireworks go off and multicolored confetti drops from the ceiling. He is a slender, red-headed man in a gray double-breasted suit. He advises the audience to be cheerful, to train themselves for courage, to feed themselves with optimism and never quit. He recommends his tape series, Success Talk, on sale at the arena, which promises a monthly interview with "one of the most successful people of our time." After a short break, he reveals what is ultimately necessary to achieve success. "Lord Jesus, I need you," Peter Lowe asks the crowd to pray. "I want you to come into my life and forgive me for the things I've done."
As the loudspeakers play the theme song from Chariots of Fire, Lowe wheels Christopher Reeve onstage. The crowd applauds wildly. Reeve's handsome face is framed by longish gray hair. A respirator tube extends from the neck of his blue sweat shirt to a square box on the back of his wheelchair. Reeve describes how it once felt to lie in a hospital bed at two o'clock in the morning, alone and unable to move and thinking that daylight would never come. He thanks the crowd for its support and confesses that the applause is one reason he appears at these events; it helps to keep his spirits up. He donates the speaking fees to groups that conduct spinal-cord research. He has a strong voice but needs to pause for breath after every few words. "I've had to leave the physical world," he says. A stillness falls upon the huge arena. "By the time I was twenty-four, I was making millions," he continues. "I was pretty pleased with myself. . . . I was selfish and neglected my family. . . . Since my accident, I've been realizing . . . success means something quite different." Members of the audience start to weep. "I see people achieve these conventional goals," he says in a mild, even tone. "None of it matters."
His words cut through all the snake oil of the last few hours, calmly and with great precision. All of those in the arena, no matter how greedy or eager for promotion, all 18,000 of them, know deep in their hearts that what Reeve has just said is true - too true. Their latest schemes, their plans to market and subdivide and franchise their way up, the whole spirit now gripping Colorado, seem to vanish in an instant. Men and women up and down the aisles wipe away tears, touched not only by what this famous man has been through but also by a sudden awareness of something hollow in their own lives, something gnawing and unfulfilled.
Moments after Reeve is wheeled off the stage, nutritionist Jack Groppel, the next speaker, walks up to the microphone and starts his pitch: "Tell me, friends, in your lifetime, have you ever been on a diet?"