INTERVIEW—The Big McCheese

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As McDonald’s top executive in L.A., Jeff Schwartz oversees 360 franchises for the fast-food chain, where he has worked since he was 15. And he still flips burgers every once in a while.

In an age when many workers have resumes that cover two or three pages, Jeff Schwartz, 46, has only one entry. It says, “McDonald’s Corp., 31 years.”

At the age of 15, Schwartz walked into a McDonald’s in Bloomington, Minn. in November 1968 with some buddies and lied about his age to work behind the lines. Today, he is a regional vice president in charge of 360 Los Angeles-area McDonald’s restaurants in other words, he’s the Big McCheese when it comes to McDonald’s in Los Angeles.

On the way up, Schwartz has done everything from mopping floors to managing restaurants to heading the human resources division for the corporation. But all the promotions haven’t gone to his head; when he’s inside a restaurant, he’ll still sometimes take off his jacket and start flipping burgers.

Question: Do you allow your kids to eat at McDonald’s?

Answer: Oh, all the time. It is interesting, people ask how often I eat at McDonald’s and I tell them four times a week, maybe. And my kids are the same way. I come home and ask, “Where do you want to go?” and my son says, “McDonald’s.” I say, “Well, can we have something a little different I was there today.” But it is my son’s favorite place. They have a lot of loyalty.

Q: Yet McDonald’s and other fast-food restaurants are seen as being unhealthy.

A: I think it is like everything, you need to have a balance in your life, too. We didn’t let them have only McDonald’s, it was always a treat for them. We have basic fare at home fruits, vegetables and everything else.

Q: Does the company feel any responsibility for the fact that Americans eat too much fast food?

A: Our position is that McDonald’s is good food; everything is in balance. We would love for people to eat more McDonald’s, but everything must be in balance. We have alternatives, too: our salad, the parfait and the grilled chicken sandwich.

Q: The company has run into resistance, though, particularly in France.

A: Because we are big and the most recognizable brand, we have a tendency to be the lightning rod. If ever there is an issue, go after McDonald’s, McDonald’s will fall in line and everyone else will follow suit. So the issue in Paris is about McDonald’s ruining the French traditional way. What they don’t realize is, 95 percent of the products used and sold in Paris are all French products. From the cement to the food to the buns, it is all French. We try to do that in all 120 countries. We try to use Brazilian beef and Argentine wheat. We source within the countries that we do business in, and it is good because people can see the benefit of not only having a McDonald’s restaurant, but the benefit of using local products and creating local jobs.

Q: How many McDonalds are owned and how many are franchised?

A: We are predominately a franchised company. We, the company, own about 13 or 14 percent of the stores. Eighty-six or 87 percent of all of the McDonald’s are owned by independent licensees. In Los Angeles there are 360 McDonald’s, and we the company own 75, so the remaining 285 are owned by 70 individual licensees in the Los Angeles region.

Q: Is there any single owner of a large portion of those 285?

A: We have about 10 different operators who own 10 or 12 (franchises each) in Los Angeles. There are some bigger (owners) on the East Coast that own 50. There is one in Florida and one in New York. The average owner worldwide owns 3.5 McDonald’s.

Q: Do people say that McDonald’s should stick to what it does best, like burgers?

A: In the early ’90s we introduced pizza into all the Las Vegas stores. In blind test tastes, our pizza would rank clearly above all the contenders, but when you branded it with McDonald’s, people said that you couldn’t do pizza. Clearly, we had stepped over the line with the consumers. We just could never get it off the ground.

Q: Yet now you’re trying Mexican food with the Fiesta menu.

A: It is a case study on how to do it right. We had focus groups, but before that we sent a group down to Mexico City to take a look at their alternatives and different menus. We developed about 100 different products and we had focus group after focus group. It was all consumer-based, specifically in Southern California. Los Angeles, traditionally, has always been a lead region in McDonald’s. If we are going to try it, test it or do it it will be in L.A.

Q: These days, you rarely hear of people staying with a company so long. Why have you stayed with McDonald’s your whole career?

A: You don’t see that type of loyalty but you see a lot of that in McDonald’s Corp. There are a lot more of me in the corporation. People start out as hourly employees and just stay with the company. Like me, it is their one and only job. I mean, I fill out a resume and it says, “McDonald’s, 31 years,” and they say, “What did you do before that?” I tell them, “I babysat and I shoveled snow.”

Q: Could you jump back on the line right now and keep up?

A: Oh yes, and I do, and when I make a mistake the crew laughs. What I really like to do is get on the front counter I have a little trouble with the new registers. I enjoy taking orders. If we got a bus right now and 100 people came in, I would go right up to the fry station and start working. If I am in a McDonald’s restaurant and I am not comfortable with what I see, my jacket goes off, because that is the mentality that I have. It is about the restaurant and the customer. Every decision we make is about the customer.

Q: What was the company like when you started?

A: I started in Bloomington, Minn. I just turned 15 and I went in with my friends and filled out an application. You had to be 16, so I lied about my age all right, everyone in management already knows I lied and I have been reprimanded. Anyway, they kept saying, “Next time you come in we need your birth certificate,” and then they forgot. It has been my job ever since. Things were different, there were probably 300 or 400 McDonald’s. The Big Mac had just been introduced and everything was much simpler then, with a smaller menu. McDonald’s was just the craze.

Q: Did you know Ray Kroc?

A: I met Ray Kroc on three different occasions, and he has many ties with Minneapolis. Also Dick McDonald, the namesake of the company, and I went to one of the original McDonald’s in Phoenix that he opened. We drove by it and he was reminiscing. We ended up becoming good friends and writing letters. I visited him twice in the mid-’90s. He died about two years ago. Early on, Ray bought the McDonald’s brothers out for $1 million, but to the end Dick loved McDonald’s. He used to be in the movie-theater business and one time when we were visiting he told us that he was the first to put butter on popcorn, and that it went crazy. In the car, my daughter was laughing and said, “Can you believe he said he invented buttered popcorn?” and I said, “Honey, you just had dinner with the guy who invented McDonald’s and McDonald’s hamburgers and french fries. If he said he invented buttered popcorn, I believe him.”

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