Kevin O’Brien
President, Creative Management Inc.

O’Brien Family McDonald’s

 

By Dave DeWitte
dave@corridorbusiness.com

O’Brien Family McDonald’s of Coralville, the area’s largest McDonald’s franchisee, is expanding in the Corridor with the recent purchase of five Cedar Rapids locations from longtime franchisee Jerry Mrozinski. It’s a bigger story than simply growing from 18 to 23 restaurants, however. As franchisee Kevin O’Brien explains, it’s one that goes back more than 60 years, to 1958 – just three years after founder Ray Kroc opened his first McDonald’s franchise, and when his parents built their first McDonald’s on Riverside Drive in Iowa City.

How did the O’Brien family become some of the first McDonald’s franchisees?

My folks, Bill and Dorothy O’Brien, were originally from Chicago, and had a good friend, Fritz Casper, who owned a clothing store in Libertyville, Illinois. My dad worked for him, and Fritz played golf with a guy by the name of Ray Kroc.

So, Fritz had heard about the McDonald’s business and ended up moving to Florida. He told my parents about it and my parents got interested. They actually met with Ray and were offered a franchise, an opportunity to bring the kids up in a small town. So they originally offered them Cedar Rapids, Iowa. And the funny thing is, most of my relatives at the time hadn’t been across the Mississippi, so they thought this was the hinterlands.

McDonald’s was a small company at the time – there were less than 50 restaurants in the system. They kept trying to put a deal together and couldn’t. So they [McDonald’s] said, “why don’t you take a look at Iowa City, a small college town there?” And that’s what they did. And so here we are eventually, but at that time the Cedar Rapids market didn’t work out.

How did you get involved in the business?

My parents opened the restaurant in Iowa City. Most of my siblings worked in the business and left. I thought it was a crazy life, you know – a lot of hours and stuff. So I left to go to college – my goal was politics – and I came back to help my folks. I told my father I’d stay for six months to a year, and that became 40 years.

So, I think I made the right choice. It’s been a great company to be associated with, and I got to be business partners with my parents, which was a pretty good deal.

What kept you from leaving?

They opened their second restaurant, which was the older Coralville store. And it was 100 hours a week. They had their hands full with that second restaurant, and, being the last kid, I felt guilty and stayed. At first, I kind of got pulled into it, and then I really started to enjoy it.

Several years later, I went to McDonald’s and said, “If I’m going to stay, I need to have my own restaurant.” They had offered me locations outside of Iowa. But because of my folks and the reputation they had built here in the community, I just wanted to stay here. They told me to go find the site.

The Williamsburg McDonald’s was my first restaurant. We worked with McDonald’s, the city of Williamsburg and the state of Iowa to develop the site where McDonald’s and Tanger Outlets [now Outlets Williamsburg] is – and by the way, we never had any idea Tanger was coming. It was just going to be a gas station, a hotel and a McDonald’s.

What happened to bring Tanger Outlets to your doorstep?

I just happened to be there one day when the real estate rep from Tanger stopped in for lunch. He said, “What are you doing here?” and I showed him the traffic counts. Within a month they had purchased the land behind us, and the Tanger Outlets came. I think it shows the power of the McDonald’s brand.

How did you acquire their other restaurants?

Actually, I continued to work for my folks. After the Tanger Outlet, we were in Williamsburg. Then we did another one in Iowa City, which my parents owned. We did Sycamore Mall, and then West Branch – and those were my restaurants – then Coral Ridge Mall and Washington and North Liberty. I continued to manage them for my folks when my dad passed away, and then when my mom passed away, I bought the rest of the three restaurants from the estate.

So how many restaurants does your family own in all?

I have 23 now, with the acquiring of the five in Cedar Rapids. We go from Muscatine and Walcott all the way to Carroll, Iowa. We have the two large college markets – Ames and Iowa City – and then the restaurants in-between along Highway 30, including Marshalltown and Nevada. We also have Boone and Story City.

What was it that you liked about the Cedar Rapids opportunity?

Jerry is – and I can’t speak for him – but I think he’s at a point in his life where he wants to go and enjoy what he’s worked for. He and I have been friends for a long time, and we’d always talked about if the restaurants became available, I’d like to take a shot at buying them. And it makes sense, because Coralville and Cedar Rapids are growing together, with North Liberty in the middle.

So you’re a believer in the Corridor as one market?

We’re excited about it. Iowa City is kind of a place where, because of the Hawkeyes, a lot of people come, and a lot of them come from Cedar Rapids. Both communities are growing and we like to be part of it – so, awesome!

Do you approach the Cedar Rapids market any differently than the Iowa City market?

They’re a little different. The first thing we do is we come in and start working with schools and helping teachers and, and then the community. Iowa City and Coralville will have different needs than North Liberty and Cedar Rapids, so we will adapt our support and fundraising and things like that to the community. So, there are similarities but there are differences. And we go in and talk to the community leaders and find out what the priorities are to make the community better, because we want to be part of it.

You announced some hiring would be done in Cedar Rapids, maybe about 150 people. How can you do that in a tight job market like this?

There were people working in the current restaurants that, for one reason or another, decided they didn’t want to stay with us. As we continue to market and bring the O’Brien family touch to those restaurants, we think will be busier and we will need more people to help us provide the best customer service in town.

I think we’re about halfway there. One thing is, we offer attractive benefits. We offer 401(k) retirement and other good benefits. We want to be a good employer, and we also offer a tremendous amount of career opportunities. I have had people stay with me for 25 years.

How has the workforce shortage affected the company? Do you just keep adjusting the wage scale to meet your needs?

We do. The challenge for us is that we have two of the lowest unemployment counties in the United States in Story County and Johnson County. I think the latest unemployment numbers are 1.4 [percent] in Ames and 1.8 in Johnson, and I think the learnings are that it’s more than pay. It’s about being a good place to work.

We have fun. I mean, I’ll sit in the dunk tank. We have community company picnics, and we do awards, banquets, and do a really good job of taking care of our people. We’re always trying to get better and make the job more fun. So whether our employee has worked for us for three months or 20 years, you’re still a customer and we want to treat you like a respected customer. We try really hard to do that.

We have an incredible team at the headquarters, as well as our managers and crew members at the restaurants who are responsible for our success. Most of the people I have in the organization have started as crew people, team members and work their way up to manager, supervisor, director of operations. We have a close to 1,400 employees, and we have a lot of growth, and we have marketing people and HR and also facilities management.

There’s a perception that being a franchisee puts you in kind of a straightjacket, and there’s no chance to be creative. But your company name has the word “creative” in it, am I right?

Creative Management is the corporate [name], but we also use the O’Brien Family McDonald’s, because that’s really who we are.

What’s the good thing about being a franchisee?

Well, the good thing is that it’s been 60-plus years. Because of the length of time that that my family’s been in the system, there’s a trust between the company McDonald’s and the O’Brien Family group, and they allow us to try some new things out. They want us to be creative to bring the best ideas possible, because the Big Mac was an owner-operator’s idea – so was the Egg McMuffin, Filet ‘o Fish, those kinds of things. And so, it’s to their benefit, as well as ours, to keep us young and energized about the business. And we are.

Is McDonald’s making any big changes now to improve the dining experience?

Yes, it’s an $8 billion initiative. McDonald’s is co-partnering, co-investing with us, and all of our restaurants are in the process of being remodeled and upgraded. We’ve got a bit more work to do in Cedar Rapids, because there’s a new dining experience with kiosks, fresh beef and faster service, and we’re constantly looking to go after our competition. So there’s a huge push to modernize our buildings. We should be done with most of our modernization by the end of 2021.

You’re in Ames and Iowa City. Who do you root fall when the Hawkeyes play the Cyclones?

I’ll stay neutral on that. I love my customers – love my Cyclones and my Hawkeye fans. My dream is for them to be playing each other in the national championship. CBJ

BIO BOX
Age: 63
Hometown: Born in Waukegan, Illinois, but I consider Iowa City my hometown
Education: Left Marquette University to help parents open their second restaurant
Family: Three children, Alexander (24), Lauren (21), Lillian (19); a brother and a sister; many nieces and nephews, and a dog named Crosley.
Interests: Travel, our local schools, motorcycles, architecture, art and history