Disney and McDonald's

by Wade Sampson, staff writer

As the McDonald’s presence gradually disappears at Disney theme parks, there has been speculation that it was the result of Disney wanting to emphasize healthier eating and was concerned about McDonald’s being tied so closely to childhood obesity. Actually, the reason for the changes is much more related to dollars and cents.

The two companies had worked together in the 1980s until disagreements flared up over some of McDonald’s promotions like offering bargain videotapes of recent movies. Burger King was more than eager to step in, and its Lion King promotion for Disney was a phenomenal success. After that, McDonald's executives promised franchisees they would get Disney back and signed an exclusive deal in 1996.

The terms of the 10-year McDonald's-Disney agreement which officially expired on January 1, 2007 called for McDonald's to pay about $100 million in royalties to Disney and to conduct about a dozen promotions a year for Disney films, videos, TV properties and theme parks.

McDonald's agreed to sponsor the Dinoland section of Disney's Animal Kingdom theme park in Orlando, everything from the Dino Institute with the “Dinosaur” attraction to the Boneyard to Restaurantosaurus.

Disney promised to allow McDonald's to open food locations at Disney parks including actual restaurants at Walt Disney World at Downtown Disney and near Disney’s All-Star Resorts in addition to themed locations inside the theme parks as well.

For instance, at Disney’s Hollywood Studios, McDonald’s sponsors Fairfax Fries at the Sunset Ranch March. Fairfax is a reference to the street where the famous Los Angeles Farmers Market (the inspiration for the Sunset Ranch Market) is located.

At Epcot, on the World Showcase promenade, is the Refreshment Port where sometimes international cast members from Canada will bring Canadian Smarties (a candy similar to American M&Ms) for the food and beverage location to make a Smarties McFlurry.

The exclusive contract with Disney did not allow McDonald’s to tie in with other blockbuster movies such as the Star Wars franchise or Shrek thus leaving such titles to its fast food competitors even when those movie studios would have preferred to tie in with McDonald’s since it had a higher profile and market share.

In addition, while at the beginning of the deal, Disney was producing a number of blockbuster films, that situation slowly changed and kid-oriented animated films like Treasure Planet and Home on the Range didn’t match the drawing power of their more popular competitors in the marketplace.

The decision by Disney not to renew exclusively with McDonald’s doesn’t prevent Disney from marketing their films through the fast food chain. However, now Disney/Pixar will be only promoting certain films on a “case-by-case basis” through the chain. Disney, of course, is also free to see if it can find a better deal on certain films through Burger King or Taco Bell or any other fast food chain. McDonald’s is free to promote non-Disney animated films or live-action franchises.

McDonald’s said that Disney denied the claims that Disney wanted to end their relationship based on a fear of being associated with childhood obesity. Officially, both companies issued statements that not continuing the exclusive contract was by mutual agreement.

Again, the situation seemed to relate more to money than health concerns and menu options. Demand for promotional paraphernalia from such blockbusters as Disney's 101 Dalmatians can create an influx of customers during the promotions, which typically last about six weeks around the movie’s release. The restaurants see an increase in traffic as children ask parents for the latest toy or action figure associated with the movie. Over the last decade, some of the top-selling McDonald’s Happy Meals were tied in with Disney films and many Disney collectors (myself included) have enjoyed the well-designed collectibles that were issued.

While Disney netted more than $100 million dollars during the agreement, McDonald’s netted more than $1 billion dollars even promoting Disney’s box office bombs. McDonald’s promotion for a film might exceed Disney’s budget for advertising so in addition to the royalty money, Disney got additional visibility for its films.

"For both of us the world has changed, so any new relationship would reflect that,” stated Bob Iger while negotiations were ongoing.

However, the relationship between Disney and McDonald’s actually goes back decades earlier to Walt Disney himself.

“As school ended that spring, the United States entered World War I. I took a job selling coffee beans and novelties door-to-door," said Ray Kroc, who created the McDonald’s franchise system and guided it to huge success, in his autobiography Grinding It Out: The Making of McDonalds (Contemporary Books 1977). "I was confident I could make my way in the world and saw no reason to return to school. Besides, the war effort was more important. Everyone was singing ‘Over There’. And that’s where I wanted to be. My parents objected strenuously, but I finally talked them into letting me join up as a Red Cross ambulance driver. I had to lie about my age, of course, but even my grandmother could accept that. In my company, which assembled in Connecticut for training was another fellow who had lied about his age to get in. He was regarded as a strange duck, because whenever we had time off and went out on the town to chase girls, he stayed in camp drawing pictures. His name was Walt Disney.” 

It is well-known that Walt forged his date of birth on a passport application so that he would appear old enough to join the American Ambulance Corps that was part of the Red Cross. Along with his friend, Russell Maas, who also lied about his age, Walt received a uniform and was assigned to training at a burned down amusement park near the University of Chicago where he was taught by mechanics from the Yellow Cab Company how to repair motors and drive cars over rough terrain. Unfortunately, there was an influenza epidemic and Walt became sick and was sent home to recuperate.

When young Walt Disney had just recovered from influenza, he was assigned to a new American Red Cross Ambulance Corps unit in Sound Beach, Conn., where he awaited passage to France. However, shortly afterward on November 11, 1918 was the Armistice, the official end of World War I. There was still the need for motor pool drivers not only for ambulances but for driving supply trucks and chauffeuring military brass.

On the night of November 18, Walt shipped out for France on the ship Vaubin and ended up having some life-changing adventures as a teenager overseas. Kroc did not go to France. Like many of the other volunteers, he went marching back home to Chicago, wondering what to do next.

Decades later, in 1954, Walt received a letter from Kroc. The Disney Archives has a copy of the letter and Walt’s response.

Kroc wrote the following:

“Dear Walt, I feel somewhat presumptuous addressing you in this way yet I feel sure you would not want me to address you any other way. My name is Ray A. Kroc….I look over the Company A picture we had taken at Sound Beach, Conn., many times and recall a lot of pleasant memories…I have very recently taken over the national franchise of the McDonald’s system. I would like to inquire if there may be an opportunity for a McDonald’s in your Disneyland Development.”

Walt responded with a warm letter informing Kroc that his request had been sent to the vice president in charge of Disneyland concessions because Walt was currently confining his activities to the creative side as the Disney Company raced to complete the theme park on time.

Kroc claimed he never received a response from the vice president and went on to open his first McDonalds franchise in June 1955, mere weeks before the opening of Disneyland.

However, decades later, McDonald’s did find a presence in the food and beverage locations at the Disney theme parks. However, since the Disney parks are theme parks that tell a story, even the McDonald’s location had a back story to blend them into the surroundings.

One of my favorite stories was the one for the McDonald’s Fry Cart that opened in Magic Kingdom’s Frontierland in 1999. Disney Imagineers wrote the following back story for that location:

With the rush of prospectors passing through Frontierland in search of gold, lots of folks in town started looking for ways to cash in on all the excitement. Back in 1853, ol' McDonald (who had a farm, ei-ei-o), a potato farmer, decided to set up his cook wagon on the hill under the big oak tree, just off the main trail. To drum up interest in his French fried delicacies, McDonald even came up with a catch phrase and posted it on the front of the wagon: "There's gold in them thar fries!" (with a symbol of a golden arch to emphasize the fact).

Business was booming for a couple of good years, right up until the great flood of 1855. Legend has it that white men disturbed the spirits of the mountain by removing gold from Big Thunder, causing all sorts of havoc from earthquakes and avalanches to storms and floods. In fact, the nearby river rose so much, the water reached right up to McDonald's wagon on the hill. The wagon survived, but when the water receded, the wagon started to go with it. It slid down the hill, crashed through a fence (and sharp-eyed guests could see the poorly repaired fence), and got lodged in the mud down below.

This didn't stop ol' man McDonald, though. He just laid down some planks so folks wouldn't get their boots muddy, and he has kept right on selling his delicious French fried potatoes to this day.

There was also a sign placed nearby that proclaimed, "Same location since '53." The "53" was scratched out and painted over with a "55." Not only did this help support the story, it was also a reference to McDonald's history. Brothers Dick and Mac McDonald opened their original restaurant in San Bernardino, Calif., in 1953. Kroc, who pitched the idea to the brothers of expanding their restaurant into a franchise, opened his first location in Des Plaines, Ill., in 1955.

The Frontierland Fry Cart closed in late 2008. A new food service location is being built in its place, expected to be completed this spring. It will be named the Golden Oak Outpost, a tribute to Disney's Golden Oak Ranch in California, an 800-acre movie ranch where Disney filmed a great many television shows and films from Spin and Marty to Darby O’Gill and the Little People to The Love Bug and many, many more.

McDonald’s supported a restaurant at Disney’s Animal Kingdom, as well. The Restaurantosaurus backstory is that it was a former fishing lodge near where the first dinosaur fossil was found in 1947 by an amateur fossil hunter. That person, along with a group of scientist friends, bought the land because they realized it could be a valuable site for further discoveries. Since its days as a fishing lodge, the building served as a visitor’s center, a makeshift museum with fossils on the wall, the first incarnation of the Dino Institute (with a small lab), and a clubhouse for student volunteers.

Today, it serves primarily as a commissary (that’s the McDonald’s connection) and dormitory for grad students who live there while they work on uncovering new fossil finds. The grad students are enrolled in classes at the Dino Institute while working at the nearby Boneyard dig site. Being college students, they get a little creative, including modifying the name on the restaurant marquee with “osaurus”. There are lawn chairs on the roof of Restaurantosaurus and plunger arrows on the side of the nearby water tower to also reference their youthful hi-jinks.

Each room has evidence of its previous use. The Quonset hut was a vehicle maintenance building with adjacent auxiliary storage. The plastering room has remnants of the prepping and shipping of fossils. The recreation room features a basketball hoop, dartboards, soda cans on the wall and poster of pop culture items, including a variety of awards for the students (including the “Zip” Award for the student you worked the hardest all summer only to find nothing—zip).

Both Disneyland and McDonald’s have become worldwide icons of America (just like Coca-Cola, another long time Disney participant) but few Disney fans know how closely the two empires have had their histories entwined over the decades.