Behind the arches: our writer takes a sneak peek into the training grounds of McDonald's franchisees: hamburger university

Entrepreneur, Jan, 2006 by Geoff Williams

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

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

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

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

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

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

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

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

Class Act

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

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

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

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