The partnership that failed due to disagreements and conflicting perspectives over the course and growth of the
Question:
The partnership that failed due to disagreements and conflicting perspectives over the course and growth of the McDonald's fast-food franchise is an example of a business partnership: that of Ray Kroc and the McDonald brothers, Richard and Maurice McDonald. The McDonald brothers received a proposal from Kroc in 1954 to franchise their restaurant. After an agreement was reached, Ray Kroc was appointed the McDonald's brand's franchise agent. However, their visions were different which led to the dissolution. In order to have a national and ultimately worldwide presence, Ray Kroc envisioned the McDonald's franchise expanding quickly and widely. However, the McDonald brothers were happy with fewer, well-managed, and focused on quality restaurants. Conflicts developed over matters including franchise fees, menu modifications, and control. The McDonald brothers believed that Kroc was straying from their original concept with his ambitious ambitions for development.
The following legal factors led to the dissolution of the partnership:
Intellectual Property Rights
- Trade secrets and trademarks are only two examples of the many intellectual property rights that surround the McDonald's brand. The handling of these rights during the dissolution could potentially be covered by legal agreements, which would guarantee that the brand and related assets were transferred in compliance with the law.
Ownership and Control
- Legal paperwork would have specified each party's ownership interests as well as McDonald's constitutional framework. Under the provisions of formal agreements, Ray Kroc would have taken over ownership and management of the business from the McDonald brothers through the buyout.
Franchise Agreement
- The requirements and limitations for using franchising to spread the McDonald's idea were specified in the franchise contract signed by Kroc and the McDonald brothers. This agreement had clauses outlining each party's obligations and rights.
Make one comment on this post based on a legal basis.
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts