15 May 1940: McDonald’s first restaurant opens

Maurice and Richard McDonald set up a fast food restaurant in San Bernardino, California, on this day in 1940, and named it McDonald’s Bar-B-Q.

In 1940 two brothers, Maurice and Richard McDonald, set up a fast food restaurant in San Bernardino, naming it "McDonald's Bar-B-Q". Eight years later they streamlined the menu to focus on a few key items, such as burgers, fries and milkshakes. They also dropped the second part of the name, renaming their restaurant McDonald's.

Then in 1952 the brothers commissioned architect Stanley Meston to produce an efficient, modern design, with the location of every piece of equipment planned out beforehand.

Armed with this concept, they began to seek out franchisees. While they quickly found several takers, it wasn't until Ray Kroc (who had sold milkshake machines to the original branch) suggested nationwide franchising that McDonald's really began to take off.

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After securing franchising rights for most of the United States in return for a 1.9% royalty on gross sales, Kroc set up McDonald's Corporation. Frustrated with the brothers' lack of ambition, Kroc later purchased the entire business from them. On 21 April 1965, he listed the company on the New York Stock Exchange.

In 1967 the first international branch opened in British Columbia, Canada, and by 1968 McDonald's had 1,000 restaurants.International expansion in Asia and Europe began in 1971. During the 1980s the company managed to fend off the competition from rival chains, while continuing to expand: branches in Moscow and Shenzhen opened in 1990. But more recently, criticism that the company's food is unhealthy and causes obesity has resulted in falling sales.

However, McDonald's has made investors rich. While the price of a Big Mac, which debuted in 1967, has gone up just over ten-fold from $0.45 to $4.79 (in the US), the adjusted stock price is now 488 times its value in 1970.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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