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Monday, March 29, 2010

McDonald's franchise owner has spent 50 years in fast food

Anthony J. Micale has worked for McDonald’s Corp. for 50 years.

Now, before you wonder why he never found a better job, you should know that he’s been a franchise owner for nearly all those years. He bought his first franchise in Binghamton, N.Y., in 1962 from the legendary Ray Kroc, before the Golden Arches became an American cultural icon.

That was 3-1/2 years after he’d first walked into a Long Island McDonald’s on Jericho Turnpike in Huntingdon, N.Y., looking for a part-time job. He was a sheet-metal worker commanding $8 an hour, enough to feed his young family. But he needed $500 to put a dormer on the Cape Cod house he’d bought.

A fast-food restaurant job wasn’t going to match the union wages of his full-time work. But Micale, now 72, said he was enamored with the speed, organization, uniforms, and overall concept of McDonald’s. “It had a life and a spark of its own,” he said.

Micale knew he wanted his own place. So when his father was ready to retire, Micale persuaded him to invest $80,000 - “every dime” he’d saved for retirement - in that Binghamton franchise. Opening day brought in only $162 in sales. Micale, his father, and his brother, Charles, who’d also joined the business, struggled terribly in those early days, living on hamburgers.

But Tony Micale’s timing and belief in the McDonald’s business model would make him a wealthy man.

The Micales wound up building and owning seven McDonald’s in the southern tier of New York. In 1970, McDonald’s bought Micale’s New York restaurants for stock.

Over the years, that stock has done very well. McDonald’s went public in 1965 at a price of $22.50. Shares have split 12 times since then. According to the company’s Web site, anyone who bought 100 shares for $2,250 (and held on to them) would have owned 74,360 shares worth more than $4.6 million at the end of 2009.

Of course, Micale wasn’t merely an investor.

He said McDonald’s operations vice president Fred Turner asked him in 1969 to help build the Philadelphia market. By 1971, he’d opened 16 locations here in an astounding 18 months - and ran out of money doing it.

In 1972, he sold 16 restaurants, and his father and brother left the business. Micale stayed in and kept building. “I had pickle juice in my veins,” he said.

Among the high points of his career was being among the franchise owners involved in the creation of the nation’s first Ronald McDonald House for the families of sick children needing hospital care.

Complaints about the paltry pay of “McJobs” and “supersize” meals contributing to obesity have been part of the ride, too. When people tell Micale he makes “junk food,” he asks them what they have in their refrigerator. “Do you have tomatoes? Lettuce? Bread? Meat? Bacon? Chicken? Then your house is full of junk food,” he said.

A particularly low point occurred in 1989, when Micale Management Corp. pleaded guilty to 301 violations of child-labor laws and paid a $30,000 fine in a settlement with the Pennsylvania Department of Labor and Industry.

Now, Micale and other chain restaurants are working to comply with the new menu-labeling law in Philadelphia. He estimated it will cost about $2,000 per store to do so. A particular challenge is squeezing calorie information on the drive-through menu boards.

Over his 50 years in fast food, he has owned 42 McDonald’s locations. After selling four within the last three years, he is down to six restaurants. But he is not looking to retire. “Retirement to me is death,” he said.
“I love this business. It’s so exciting.”

His son, Anthony J. Micale Jr., has been training to become an owner/operator. Right now, he is managing a restaurant, which is a prerequisite before the corporate office allows that to happen. Does Micale think one day he’ll be getting a call from his son seeking $80,000 to buy another franchise?

“I’d be lucky if I can get away with that,” Micale said.

These days, McDonald’s requires a minimum of $500,000 of “non-borrowed personal resources” to even consider someone for a franchise.

Those arches became golden, indeed.
Posted by Mike Armstrong @ 2:05 AM  Permalink | File Under: Consumer Products | | People | 7 comments
Comments   
  • 0 like this / 0 don't   •   Posted 9:59 AM, 03/29/2010
    Another example of "timing means everything in life". Well done.
    — The Baron
  • 0 like this / 0 don't   •   Posted 1:08 PM, 03/29/2010
    What % of the population has half a million laying around in a bank account to invest in a hamburger joint? And that is the minimum. How many franchises do you need to buy into, just one? You would need to control an area with several to make sure someone does open up within miles of yours.
    — Fernando08
  • 0 like this / 0 don't   •   Posted 1:59 PM, 03/29/2010
    Apparently the McDonalds guy doesn't eat what he sells. If he had he would have died a food related illness death years ago.
    — riverhealer
  • 0 like this / 0 don't   •   Posted 4:33 PM, 03/29/2010
    That $162 in first-day sales came when hamburgers were 15¢ and sodas were a dime. He probably had a couple hundred people come through the doors--not bad for a small first-day business.
    — RickB
  • 0 like this / 0 don't   •   Posted 4:34 PM, 03/29/2010
    Everybody please come in.
    — Jeffy3
  • 0 like this / 0 don't   •   Posted 9:52 PM, 03/29/2010
    Business success stories are great to read. Luck is a part of it but you make your own luck in life. It would be great to be able to pick the brains of successful small business owners like the Micales.
    — Phillies2008WSChamps
  • 0 like this / 0 don't   •   Posted 1:10 PM, 03/30/2010
    I worked for Tony late 70's early 80's in Philly. Started as mgr trainee, went to GM in several years. Loved him, hated him, but knows how to run a business. Developed much of my work ethic during my time with Tony.
    — marcthib


7 comments
About Mike Armstrong
Mike Armstrong, a business editor and writer for nearly two decades, is the Inquirer's business columnist and PhillyInc blog editor. Contact Mike via e-mail or at 215-854-2980
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