Alabama stem explorers is made possible by the generous support of the Holle Family Foundation, established to honor the legacy of Brigadier General Everett Holle and his parents, Evelyn and Fred Holle Champions of servant leadership.

I don't know about you, but I love McDonald's and I know someone who can tell us all about it.

Come on, science, technology, engineering, math.

It's all coming up right now on Alabama's STEM Explorer.

Hi and welcome back to Alabama Swim explores.

I'm Anderson and this is my new friend Larry.

We're here at the one and the only McDonald's, except it's not the one and only since we're like a bunch of locations, but not the point.

Today we're going to learn some really cool stuff.

Well, I can tell you what the McDonald's that we're going to talk about today, Anderson, is so different from the McDonald's of 30, 40 years ago.

First of all, let me tell you how happy I am to be with you today when my good friend and long time friend, Mike Ousley, called me.

I was just too excited, but I didn't know that I'd have such an enthusiastic, passionate, bubbling with energy and passion.

This is going to be awesome and I'm looking forward to talking to you a little bit about some of the nuances and some of those adjustments that are different.

It's just not the McDonald's that people know.

So whenever you're ready, I can get started with some of that.

Oh, yeah, I'm ready.

All right.

Well, let's start by saying let me start with this one.

By the year 2024.

40% of our business will be transacted through mobile autopay, curbside service kiosks, unlike walking in and coming up to the front counte and ordering McDonald's.

That's very, very different.

It's different for the customer and it's different for the owner operators.

We're all having to get accustomed to this new way of doing business.

I think a lot of this talk is a little bit about steam.

Tell me what that is.

What is stem?

Stem.

I think I know what it is, but what is it?

It's science, technology, engineering and math.

Right?

Well, I hope that we can get some of that into this talk today, because if our business is anything, it's all about science, technology, engineering and a lot of math.

A lot of math.

Now, I will tell you that I am an artist by training.

I learned of my good friend Anderson, who is an artist by training.

So we're going to talk about steam today, but we're also going to talk about art before this is over with.

So let's start with the Kiosk The kiosk, the advent of our Kiosk started maybe six months before COVID.

So we get the chaos is inside.

Then we shut down this beautiful piece of this beautiful piece of equipment that we can't use for about a year and a half because the lobbies are closed.

Why do we get so excited about kiosks?

It is because a customer will upload him or herself upgrade upsell much more effectively than the young lady at the counter.

We have been able to deduct that we get a dollar and $0.50 on the average check when the customer orders at the kiosk versus when they order at the register.

So we want to get that percentage up.

We're probably around 18, 19% now, but I want to get it to about 35%.

That's our goal over the next year, year and a half.

Well, let's go look at the kiosks.

Let's do it.

Let's go.

So this is our kiosks, and we are excited as an owner operator to have a kiosk.

So now I'm going to bring in an expert that can show you much better than I can how this large oversize computer works.

We have Andrea.

Come on in.

Hi.

Hi.

I mean, this is our kiosk What would you like to order?

Um, I'll do a coke slushie.

Do you know where to go?

So you go up, and then you click on beverages.

Mm hmm.

And so you click on frozen coke.

That's what you like or whatever.

Or this is how you're going to work.

But what?

What is customize ingredients?

Do so customized ingredients.

If were you change if like special requests like if you want whipped cream or whatever, you decide that you want on it.

So that's wh special ingredient and you could do a special request the save changes and you can add to your order if you would like to.

So would you like it for here to go and see if you want to add on different things?

We have a main where you have seven things you can do and you can always have maybe like five play here to go.

So we can say to go and we get to go.

You can either pay right here or you can always go to the cash register, so pay for your order.

You want to add on something else?

I'm getting kind of hungry.

I think I'll have a burger.

What kind of burger would you like?

So here are your burgers.

So you have a fillet amount chicken or double quarter.

So which one would you like?

Okay.

You want a cheeseburger, a double hamburger, or just a regular hamburger?

This one looks okay.

That's a double cheeseburger.

Okay.

Would you like to add to your order?

Sure.

Okay.

What else you want to add to it?

I think that's it.

Fries on there.

Oh, got to have fries.

Yeah.

Yeah.

Okay.

So what would you like?

Oh, okay.

Yeah.

Now we do have the new basket on five.

It's a basket.

It's a little about it, but a piece of paper it's come with a bunch of fries.

So that's pretty cool.

And that's.

I like.

Yeah.

Oh, okay.

Like, what is this?

It comes.

What is this?

Is this like if you want to add one or two, three, four, so you can add on several say, okay, around seven, five.

And we like that and you like and so then you just click here or if you move out of the amount order.

And then you can here maybe next time, if you don't want any of these, then you here maybe make five.

Would you like a for here to go for here?

Okay.

So you I mean, here you want to it here.

So I've complete your order and what is this Ronald McDonald .

Make a contribution.

Yeah.

If you were always seeking to take care of the Ronald McDonald House, that's not round up exactly what it is.

All right.

And you go and then you go to I always go to complete my order so you can fill it to the cash register.

Right.

So this is really easy to operate and really accessible if you have any and you never have to approach the front counter.

So that's the kiosk now, Anderson, let me show you something else exciting.

Okay.

All right.

Okay.

So, Anderson, we still have more cool stuff at McDonald's that we're going to talk about.

Let's talk about the ABS.

We're going to talk about our automated menu board.

All of that has made life so much simpler for us as operators in the McDonald's world.

But first of all, I got to take a break to tell you how much I'm enjoying and sort of getting an opportunity to work with you.

You are doing this.

You are awesome.

You are awesome.

So the ABS that is an acronym for the Automatic Beverage System one a customer places the order, then the attendant takes that order.

As soon as he or she hits medium, large or small, it kicks in, it goes up, grabs the large, medium or small cup, drops it, ices the cup, and it automatically knows what flavor of drink to fill that cup with.

Is that not cool?

It's really cool.

And that adds a good 15 to 20 seconds deduction from the overall experience because it's owner operators, it's all about the speed at McDonald's, it's all about the speed.

So whenever we can take seconds out of the process, that means that the customer gets a better overall experience then we have and is on the automated menu board.

I remember when we would have to manually go out, change times, get the numbers, had the roller type, all of that is over.

Now we get in to a home office system, whatever our pricing is, and our pricing is predicated upon what prices are all around that one particular store.

So you're subject to pay more or less at a store a mile and a half away because the statistics will tell you that food away from home index.

I want to say that again, we try to stay within a margin of a food away from home index.

So any food that is ever packaged and sold and consumed, whether that's a grocery store that's a competitor of ours now, a convenience store that's a competitor, it's not just our competitors anymore that we would know as a fast food.

So with that, we're looking for ways to automate everything that we do for the customer, just like the one we had with the kiosk.

The menu board works the same way we turn the reports in automatically from the Home Office.

It happens systematically and the prices are changed.

So like quick and quality, quick and quality and a key word, accurate, because nothing is more frustrating for a customer to see one price on a menu board and then our system has a different price.

That can be frustrating unless it's less than what they were expecting to pay on the menu.

And yeah, right.

Right now we're talking about stem and I can't wait to get to the art side of our conversation.

But the Steam program is so important.

And I will tell you, with my experience, I'm an artist.

I studied art.

Majored in art.

Everything that I did in the first 15 years of my career was in the arts arena.

So I never thought that I would need math and science and engineering and technology that was not going to be my words.

All I ever wanted to do was to be a little black Rembrandt.

I grew up wanting to be a little black Rembrandt and became quite proficient.

But life changes.

And while I was very good with art, I never knew that I was going to be advertising manager.

So now I have to write memos.

Deduct memos, understand memos.

I'm taking Anderson unnecessarily.

Had I paid attention in English, I've got a dictionary and thesaurus and I'm taking 45 minutes just to write a five minute memo because I didn't pay attention and never thought that I would need it.

What else do you need?

You need math on our systems and on the process of running a profitable McDonald's.

Just about anybody can run a McDonald's, but a profitable McDonald's, right?

We have to live within yields.

So the two highest costs on our PNL panels, an acronym for profit and loss statement.

On our PNL we have to hit a 32.5 PAC that is mandated by my son and I to all of the managers and the restaurants.

So the two highest, most expensive items on any menu, on any panel profit in last statement is food cost labor.

So food costs you can look at it this way for every dollar that we take in, 27.5% of that goes to food, right?

24% of that goes to labor.

So when you take that amount out of your dollar, then that leaves three and a half percent for advertising.

Another 3% for women are for maintenance and repair.

And there's uniforms, landscaping, electricity, waste removal.

It goes on and on and on.

And we hope that by the end of the day, we can have about a 10 to 12% left for the whole reason for us doing this is the Ronald McDonald foundation.

You got the Ronald McDonald Foundation, which as an operator, I don't mind tell you I'm embarrassed to tell you this, but I was an owner operator for probably two, three years and I never knew what the Ronald McDonald House did.

And when I learned what they did to make life tolerable for moms and dads who had a sick baby, who lived within 50 to 75 miles away from Birmingham, it was awesome to me because we had so many people,ANDERSON, Sleeping on floors, sleeping in their cars.

The Ronald McDonald House allows a family to stay and concentrate on getting their baby well.

And I couldn't have been more proud than to have that opportunity.

So, Anderson, I can't tell you how much fun I'm having.

You're just a delight to work with.

I'm just happy to be here for this stem program.

I was just wondering, like, how many McDonald's are there?

Okay, Art, so how many are there?

In the Birmingham Co-op, we have about 104.

But if you want to ask that question from a regional perspective, about 785, if you want to ask that same question on a national basis, we have up to approximately 14,000 McDonald's and we want to be within eyeshot as often as possible for our customers to use us.

So how many customers do you get a day like any like normal McDonald's?

How many?

Well, let's just do it on an average.

We do about 53,000 transactions in the run of a month.

And we want every single one of those, Anderson, to be perfect.

Now, if my son and myself am I director of operations and perhaps the store manager do all of that, that's exactly what we would do.

But in our restaurants, of the seven restaurants that we own, six of those restaurants are 24 hours drive through, and it takes about 45 to 50 employees on an average store to deliver the service that we like to deliver at a McDonald's.

However, what we've seen over the past two years, it's been unprecedented.

We've not seen that kind of shift and labor interest in the 30 years that I've been in business.

And oh yes, this is my 30th anniversary.

We opened in 1992, the first McDonald's, the first black owned McDonald's.

And here we are 30 years later, unfortunately, with a 56, 57% black demo, we still only have my son and myself as African American owner operators here in Birmingham.

That's that's really sad, honestly, we've got to do better.

And we're working on that.

We're working on that.

We've had two others to come in, Anderson, but for one reason or another, they did not last because it takes a lot to make this business to make it float.

Right.

So, matter of fact, and tell you a little bit about my story and how I got started with McDonald's.

So I'm visiting Chicago with friends and I have an opportunity to meet the very first African-American owner of a McDonald's franchise.

His name is Herman Petty.

And I would visit Herman stores.

They had three stores at the time, and I'll tell you what fascinated me now.

This must have been in the early eighties that I merman.

And as we would travel those three stores, as strange as it sounds, I could never get past the fact that you had all of these white patrons coming into a black owned business, and Herman is trying to convince me to get started with McDonald's.

And I asked him the question, Anderson.

I said, Herman, do you really believe that in Birmingham, Alabama, white customers are going to come into a black owned business?

You know what his response was?

Absolutely, yes.

It's not about you.

It's the strength of the brand.

Yeah.

What a tremendous message that is for all of us.

And the very store that we are filming in right now has about a 92% white traffic count.

And I have to tell you, given my history and I'll tell you about some of that in the second, I'm still amazed.

I'll sit in the corner from time to time, and I'm still amazed at the fact that these customers are coming in and nobody cares who the owner is.

As long as they're getting good service and they're definitely getting good service, we'd like to think so.

We have our days, but we certainly would like to think so.

So I have one more question.

Sure.

So since you guys are really technology based and are starting to really get up and technology, do you think that in the future when like this whole place is ran by technology, like what is going to happen to the employees?

Well, if those employees have not advance just to the extent that they understand more completely science, technology, engineering and math, then it's not going to be a pretty picture.

And that's what's so important about this whole program that we're working on now.

Any opportunity that I get to spend in STEM and Steam, which has the A for art.

Yeah, it's so credible.

It's so necessary because that's where our world is moving.

I might have mentioned to you earlier that as much as 40% of our business by the year 2024 will happen.

Not at the front counter, but preordering mobile order, the automatic delivery, the kiosk machines, all of that is going to be the new McDonald's, very different from what we have known in the past.

But in getting started in Birmingham and we know our history, Birmingham, of course, has a very storied and sordid history that hadn't been so favorable to the African-Americans.

And so imagine my being the first black to own a McDonald's in Birmingham, Alabama, in 1967-68, I integrated schools in this state, becoming one of six black students to attend this otherwise all white school.

And growing up in that segregated circumstance really created some indelible memories for me.

I remember that first year that I attended that school.

Dr. King was killed in 68, and I could never calibrate, for instance, Anderson, the sad, somber tone in our community that evening.

My mom crying, my dad visibly different, and then coming to school the next day into this joyous, jubilant, jubilant, celebratory atmosphere.

It was very difficult for a 13 year old to process, but having learned how to become comfortable in that very uncomfortable setting made a difference.

Now I hear that you go to this middle school.

Yes, that is the system where I started my career.

I taught art at the Vestavia high school there, and learning how to function in that setting really made a difference.

In the career that I get tave today makes all the difference in the world.

And I'm sure you mention all of this in your book that I heard you writing.

You heard that little book?

Yeah.

All right.

Well, let's talk about the book for just a second.

So having an opportunity to open the first restaurant in 1992, shortly after that, I was invited to join the board of directors of Synovus Bank.

It was then first commercial bank, and I'm still consulting with Coca-Cola, so things were happening really fast for me and from there, about six, eight years later, I'm elected to the board of directors of Coca-Cola.

Things were happening.

I've got my third store, and today my son and I owned seven restaurants.

But here's an interesting thing and a point that I want you to remember, Anderson.

Communication skills, relationship skills, demeanor, deportment, disposition, those are the drivers.

Those are the drivers.

What's the difference than a guy who has a degree in art?

And I have friends who have master's degrees in business and can't run a lemonade stand.

What's the difference?

Great communication skills, relationship skills.

What's your demeanor?

How do you deport yourself and your demeanor?

Anyone that masters those, Anderson, can pretty much write his or her ticket in life, even though this program is designed to focus on science, technology, engineering and math, but minus good communication, good relationship, it's all for naught There's a story that a friend of mine who was the first black chief justice in the state of Alabama, who tells a story about how many cases his firm litigate on an annual basis for no other reason than poor bedside manners.

So when you think about that, Anderson, four years of undergrad sit for the four or five years of medical school, three or four years of residency, passing the medical bar.

But you never learn how to talk to people.

So simple, so basic, so true, yet so very misunderstood.

And so I was inclined as I looked around and I didn't see very many people doing some of the things that I'm doing.

So I need to capture those rudiments of thought, those personal disciplines that I thought lead to a winning experience.

The name of the book is Why Not Win?

And the mantra to that book is Work hard, relate hard.

You'll get no better piece of life admonition than that.

And I fear that too many people work harder than they should when they should be relating just a little bit because other people, other people will get you to your goals when you get there.

So we wrote the book.

The book has now been adopted by seven colleges, eight colleges and universities as a mandatory read.

We are currently producing the book and audio form.

We are producing a Braille version and we're about halfway through with an illustrated graphic novel which is going to allow us to reach a more younger demographic.

And that book is going to be unveiled by the end of this year at Restoration Academy.

So we're so excited about this.

Why not win space?

We certainly want to thank Coca-Cola, Alabama Power and so many others of our sponsors for making that program happen.

I love what I do for Coca-Cola.

I love what I do for the bank.

I love what I do at McDonald's, but I really love making a difference.

One thing to make a dollar, but making a difference.

It's kind of where my focus is right now and we're enjoying that process.

That's amazing.

So I'm so glad that we got to spend this time with you, Larry.

It was amazing.

Honestly, you were amazing.

Thanks.

Appreciate you.

I had so much fun learning all about McDonald's, all about the technology and the advancements and everything that's happening.

So we'll see you next time on Alabama STEM Explorers and make sure you come back.

Great.

Thanks for watching.

Alabama STEM Explorers, if you missed anything or you want to watch something again, you can check out our website at Alabama STEM Explorers dot org.

Maybe you have a question you could answer here on the show and you might grab a cool T-shirt, feel free to send us a video question or an email on our website.

Alabama STEM Explorers dot org.

Thanks again for watching.

We'll be back next week.

Alabama STEM Explores is made possible by the generous support of the Holle Family Foundation, established to honor the legacy of Brigadier General Everett Holle and his parents, Evelyn and Fred Holle champions of Servant Leadership.