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in everything from the auto parts business (Meineke Discount Mufflers) to the weight control business (Jenny Craig International). Some chains grew through franchised outlets; others through company-owned stores; and McDonald’s eventually expanded through both. In the long run, the type of financing used to grow a company proved less crucial than other aspects of the McDonald’s business model: the emphasis on simplicity and uniformity, the ability to replicate the same retail environment at many locations. In 1969, Donald and Doris Fisher decided to open a store in San Francisco that would sell blue jeans the way McDonald’s, Burger King, and KFC sold food. They aimed at the youth market, choosing a name that would appeal to counterculture teens alienated by the “generation gap.” Thirty years later, there were more than seventeen hundred company-owned Gap, GapKids, and babyGap stores in the United States. Among other innovations, Gap Inc. changed how children’s clothing is marketed, adapting its adult fashions to fit toddlers and even infants.

As franchises and chain stores opened across the United States, driving along a retail strip became a shopping experience much like strolling down the aisle of a supermarket. Instead of pulling something off the shelf, you pulled into a driveway. The distinctive architecture of each chain became its packaging, as strictly protected by copyright law as the designs on a box of soap. The McDonald’s Corporation led the way in the standardization of America’s retail environments, rigorously controlling the appearance of its restaurants inside and out. During the late 1960s, McDonald’s began to tear down the restaurants originally designed by Richard McDonald, the buildings with golden arches atop their slanted roofs. The new restaurants had brick walls and mansard roofs. Worried about how customers might react to the switch, the McDonald’s Corporation hired Louis Cheskin — a prominent design consultant and psychologist to help ease the transition. He argued against completely eliminating the golden arches, claiming they had great Freudian importance in the subconscious mind of consumers. According to Cheskin, the golden arches resembled a pair of large breasts: “mother McDonald’s breasts.” It made little sense to lose the appeal of that universal, and yet somehow all-American, symbolism. The company followed Cheskin’s advice and retained the golden arches, using them to form the M in McDonald’s.

free enterprise with federal loans

TODAY IT COSTS ABOUT $1.5 million to become a franchisee at Burger King or Carl’s Jr.; a McDonald’s franchisee pays roughly one-third that amount to open a restaurant (since the company owns or holds the lease on the property). Gaining a franchise from a less famous chain — such as Augie’s, Buddy’s Bar-B-Q, Happy Joe’s Pizza & Ice Cream Parlor, the Chicken Shack, Gumby Pizza, Hot Dog on a Stick, or Tippy’s Taco House — can cost as little as $50,000. Franchisees often choose a large chain in order to feel secure; others prefer to invest in a smaller, newer outfit, hoping that chains like Buck’s Pizza or K-Bob’s Steakhouses will become the next McDonald’s.

Advocates of franchising have long billed it as the safest way of going into business for yourself. The International Franchise Association (IFA), a trade group backed by the large chains, has for years released studies “proving” that franchisees fare better than independent businessmen. In 1998 an IFA survey claimed that 92 percent of all franchisees said they were “successful.” The survey was based on a somewhat limited sample: franchisees who were still in business. Franchisees who’d gone bankrupt were never asked if they felt successful. Timothy Bates, a professor of economics at Wayne State University, believes that the IFA has vastly overstated the benefits of franchising. A study that Bates conducted for a federal loan agency found that within four to five years of opening, 38.1 percent of new franchised businesses had failed. The failure rate of new independent businesses during the same period was 6.2