‘It was a natural transition’
Enterprising People Business Radio Talk presents
A BUSINESS CONVERSATION WITH RON SMITH
BY KIMBERLY BAILEY-TUREAUD
A onetime technology executive who worked at several Fortune 500 companies and now owns and operates six McDonald’s restaurants (three in West Las Vegas, three in Henderson), F. Ronald (Ron) Smith is a business icon. Currently serving as vice president of the Greater Las Vegas McDonald’s Operators Association, Smith shared his story in a revealing conversation with Las Vegas Black Image.
How did you transition from technology executive to McDonald’s owner-operator?
The short story would be that I have always had an entrepreneurial spirit, even before I started working at IBM and AT&T. I worked for several Fortune 500 companies after leaving the Air Force, and soon went on to own and operate my own flooring business in New York. My flooring business failed because of lack of funding, and I re-entered the corporate world — I went on to work for IBM on Integrated voice and data applications. Seeing how technology was developing, my wife and I discussed life after IBM. I didn’t want to go into business as a startup again. So we looked at franchises with credible reputations, mirroring the top technology companies I grew accustomed to. The number-one franchise company was McDonald’s restaurants, so it was a natural transition coming from the number-one technology businesses. We applied and got our first restaurant in 1993. We moved to Las Vegas, opened up our first McDonald’s in Henderson — and grew from there.
Why did you choose Las Vegas?
It has to do with a philosophy I have, that is similar to buying a home — because I would move quite a bit. That philosophy requires you to look at the back end of a deal when you make a purchase, and consider what is most marketable if you were to sell it. I took on the same ideology when I bought my McDonald’s franchise. We researched and found that the southwest, which included Arizona and Southern Nevada, was a desired location because of the climate and the fact that it was a great place to retire.
What are your feelings about McDonald’s diversity outreach as it pertains to owner-operators?
McDonald’s really has a wonderful diversity outreach initiative. McDonald’s wants to reflect the community that it serves, and the community it serves is a diverse community. So they certainly want the representation on the operator’s side and the executive side as well, reflecting the diversity of their customer and employee base.
How do you feel about the recent criticism of minimum-wage salaries for fast-food workers?
Let me answer this question from a hat that I wear. As a member Board of Directors and past Chairman of the Nevada Restaurant Association, I speak to the minimum wage matter from a restaurant industry perspective. In addition, I personalize it and go back to my first job at age 16. I was paid minimum wage, which back then was $1.25 an hour. Today, it is at $7.25 an hour. The point I make is that minimum wage is relative to the existing economy. If the federal minimum were to be increased to $10.25, $11.25 or even $15.00 an hour, it would still be “the minimum wage.” It would still be the entry-level and starting point in the workplace. In my opinion, the minimum wage was not intended by our lawmakers to raise a family of four. That would be a discussion that involves politics, standard of living and fair and legal business practices. It is so atypical for any business person to bring someone into the workplace and pay them minimum wage and expect to keep them. I have not experienced that in the restaurant industry. Where it does exist, I believe it is the exception rather than the rule. What I can say is at McDonald’s, one can start at minimum wage and work themselves up through the organization. I don’t know of any other Fortune 500 company where so many have started at the bottom wage scale and worked their way up to become president of regions, divisions and McDonald’s Corporation itself. Although Don Thompson, an African-American man, himself didn’t advance up through the McDonald’s employee system, his predecessors had. There are a number of Division Presidents and Regional Vice Presidents that take great pride in the fact that they “Started as Crew.” They even state that fact on their business cards. McDonald’s is one of very few companies where so many people have had the opportunity to start at an entry-level and work their way to the top. That’s The American Dream.