Case Studies

by Rosemary Hepözden

last updated 21/08/2019

Kiwi battlers - the pioneers who brought McDonald’s to New Zealand

by Rosemary Hepözden

last updated 21/08/2019

A book published in 2011 by Rosemary Hepözden tells the story of how McDonald’s came to New Zealand and documents its first 35 years here. In this extract, she describes the struggle to open the first restaurant in Porirua.

The 1976 opening of New Zealand's first McDonald's in Porirua.The first McDonald’s restaurant in New Zealand opened in Porirua in 1976. It was an unlikely setting for the start of a revolution: McDonald’s was not the first fast food outlet in New Zealand (KFC had opened five years before) nor was it the first franchise, but McDonald’s brought a commitment and an attention to detail to the food business that bordered on obsession.

The story was already a familiar one overseas, but it took the vision of Wally and Hugh Morris, founders of the Shoprite supermarket chain, to bring McDonald’s to New Zealand. Along the way they had had to convince an unenthusiastic Ray Kroc, the legendary creator of the modern McDonald’s franchise, that New Zealand was worth the effort. At an initial meeting in 1975, Kroc said, ‘New Zealand? We’re not going there… I cruised into New Zealand on a Saturday and there was no-one in the street anywhere, and on Sunday it was even worse. I never met a more dead-than-alive hole in my life. Where do all the people go on the weekend?’

It was not an auspicious start, but the Morris brothers and their team maintained contact and, following some hard negotiation, they were appointed joint venture partners in 1975. The race to launch McDonald’s was on, and in her new book Golden Arches Under Southern Skies author Rosemary Hepözden tells the story of the entrepreneurial Kiwis who made it happen. In this extract, she describes the challenges the little team faced to open that first restaurant.

Battling bureaucracy

The New Zealand economy of the mid-70s was not geared to overseas investment. It was tightly regulated and the labour force compulsorily unionised. Import licensing was a powerful protectionist bulwark against the establishment of any company that needed to bring in goods manufactured abroad. Rosalie Hawes, hired to be the first secretary for McDonald’s, was immediately thrown into the struggle to find the equipment for the restaurants before the opening day scheduled for 7th June 1976. ‘So I’d spend my days ringing around companies in Auckland to ask if they had any spare import licences for wallpaper, uniforms, anything that was going. I had to find the licence to cover what we were bringing in. It was very challenging – and it was fun, I guess. I was constantly ringing up members of Parliament and getting their assistance.’

Wally’s way of dealing with the restrictions was to circumvent them. ‘Every time I went to try and get something, they would say no,’ Wally recalled. The Labour government in power at the time was very reluctant to allow Wally to import a McDonald’s kitchen, declaring that it was nothing more than an assemblage of stainless steel and electrical parts that could be manufactured in New Zealand. When a search failed to turn up anybody that could produce the specified model, Wally was finally permitted to import a kitchen on the understanding that it could stay for only twelve months, as a template for a local manufacturer to copy, before being re-exported. But without a kitchen, there would be no McDonald’s. ‘And so, in order to open – and I remember making the decision, I remember it being a lonely one – I said we would put it into the Porirua store and say we were training from there. We could never, ever have got started if I hadn’t made that decision.’

Five weeks before opening, there was scant evidence of the new restaurant. ‘We really didn’t believe it was going to get off the ground,’ remembered Lionel Whitehead [one of the first trainee managers at Porirua, who went on to become a franchisee himself], ‘because there was no equipment, no furniture, nothing.’ Eventually, two vast containers – containing furniture, equipment, refrigerators, freezers, even a fountain – were offloaded in front of the Cobham Court site in Porirua.

Two American specialists, Marty McArthur and Dale Lawrence, arrived to help with the installation. ‘They were like a breath of fresh air,’ continued Lionel, ‘a necessary injection of sanity into the craziness of the task ahead. The local contractors were staggered by the speed of these two guys. They worked twenty hours a day if they could, as long as light was available. A lot of the locals were falling over. They weren’t used to working under that sort of pressure and couldn’t keep up the pace. But (the Americans) knew the deadline that we were up against to get the store open. It went together like a jigsaw puzzle.’ Returning the kitchen, Wally decided, was something to negotiate later. In the interim, he had it cemented into the floor. ‘Wally was born to frustrate bureaucrats,’ lawyer Jim Kingston observed. ‘It was his talent.’

If the energetic installations raised Kiwi eyebrows, it was the substandard quality of ingredients that disturbed the Americans. The qualitative gap between what was acceptable and what was available frequently proved cringe-worthy. The selection of pickles was meagre and even tomato sauce, a popular staple in New Zealand pantries, was a long shot off the prescribed tangy ketchup. Without the ability to import, however, existing local products would have to suffice until suppliers and manufacturers could bring their efforts up to scratch. McDonald’s in the United States were adamant about the standards they expected, but as long as there was demonstrable commitment to rapid and substantial improvement, the New Zealanders would be given time to find their feet.

Scrambling to prepare the Porirua restaurant

Lionel Whitehead was an instrumentation engineer for Kodak for twelve years before accepting a position as trainee manager for McDonald’s in Porirua for $7000 a year. It was 30 per cent less than he’d been earning at Kodak, but an interview with Ray Kroc in Time magazine impressed him so much that he wanted to join the company. ‘A lot of things about it appealed to me and I determined then to pursue it a bit further. I’d heard that Wally Morris was looking for managers and I managed to get an interview with him in the old Shoprite warehouse in Petone. Wally was full of enthusiasm. He pulled out all these brochures he had on McDonald’s and he had a great vision. In fact, I think that’s what inspired me even further. He saw it as being the ultimate in family dining in New Zealand.’

Other applicants for trainee manager positions were recruited through advertisements in Wellington’s Evening Post, and crew positions were advertised in the local Porirua paper. ‘We were looking for sixty-five people who could run and smile at the same time,’ said Ray Stonelake. ‘I’d mentioned it to Wally when I came back (from training in the United States). I said, “Where the hell are we going to find these people that are so enthusiastic about their work that they actually look as though they are enjoying it?”’ [Ray Stonelake had worked for Wally Morris since leaving school in 1962. He and Bruce Peploe, another trainee, had been the first New Zealanders to train at McDonald’s in the US and to graduate from the company’s renowned Hamburger University where the pair finished first and second in their class of 118.]

Irene Kilgour was an early applicant for a crew position. She was new to the Wellington area, having moved from Westport with two young children. With a mortgage to cover, she was hunting for a part-time job. ‘The biggest surprise was being interviewed in a Blue Heron hotel bedroom,’ she remembered. ‘I sat on one side of the bed and the interviewer, Rick Durey, who was one of the managers, sat on the other.’ Sheets of paper listing applicants’ names were strewn across the bed, leaving Irene doubtful of her chances. Nevertheless, the phone call came and Irene accepted.

Two weeks out from the opening, training began. With their American experiences to call on, Ray Stonelake and Bruce Peploe were charged with instilling in the new employees a sense of the McDonald’s work ethic. Ray recalled: ‘We’d figured out from our training in the States that Bruce was damn good at the back in the kitchen and I was damn good at the front – so, basically, I left him to do all the training in the back area.’ With no fresh meat patties to practise with, wooden patties and cardboard French fries were used in lieu. ‘On the front counter it was a little more difficult,’ Ray continued. ‘We’d had to have night classes, because there was no way you could train during the day. I think there were thirty or more people working in the restaurant, screwing, drilling, hammering and jack hammering, so it was just impossible. The builders finished at six, so we would bring all the staff in at six-thirty and begin the training process. We just made up orders and did the best we could with fictitious trays of food, but it was not easy.’

The day before the opening, the families of all the successful job applicants were invited to the restaurant for a trial run. Hugh Morris recalled the event: ‘Lionel Whitehead had said to an American guy who was a resident in Porirua that he would open the restaurant for him for free because he was having a special birthday. What a wonderful opportunity to get our people flowing…’ The American man, said Hugh, descended on the treat as a delectable encounter with comfortingly familiar flavours. ‘But it was free,’ Hugh added, ‘and that hurt me to the quick.’ Nevertheless, the occasion had proved illuminating. ‘It was the first time we’d been in the store and actually worked with the equipment,’ said Irene. ‘We opened the next day. How we ever opened, I don’t know sometimes.’

On Monday 7th June 1976, McDonald’s opened its doors for the first time in New Zealand with no fanfare. Management had deliberately chosen to open on the quietest day of the week, wisely preventing an onslaught when building was still incomplete, systems not established and crew still not fully trained. Only fourteen people walked in during the first hour – somewhat to the staff’s disappointment, Hugh Morris recalled. However, the presence of topline staff from Australia and the United States helped maintain a buoyant mood throughout the week, said Lionel Whitehead. ‘Everybody wanted to see this new store in the new country open.’

To celebrate the Grand Opening that would take place the following Saturday, an advertisement with a tear-off coupon was placed in the newspaper: Buy a Big Mac and get one free. Extraordinarily, there was snow in the hills surrounding Porirua throughout the week – ‘Goodness me, we’ve really broken some records here,’ thought Lionel Whitehead – and the poor weather was persistent enough to give rise to predictions that the turnout would be minimal. But the newspaper advertisement had struck a chord. It proved to be a master stroke of inducement to which hundreds would respond.

Ronald descends to warm up the crowd

No opening festivities would be complete without an appearance by Ronald McDonald. A helicopter was chartered to chopper in the iconic clown, who was accompanied by Radio Windy’s mascot, Roland the Bear. It was a tight squeeze for the two broad-shouldered characters and the helicopter’s door had to be removed to accommodate them as best as could be managed. Ronald was grateful for a sturdy seat belt when he noticed that at least a quarter of his body was actually hanging outside the helicopter. ‘As we circled around the area, I could not believe it. There were thousands of people waving and jumping up and down, waiting for the arrival of Ronald,’ he said. As pilot Peter Button steered the helicopter away and landed a safe distance from the crowd, he issued a frantic instruction to Ronald: ‘Get out of the bloody helicopter now ’cause they’re coming!’ The crowd had broken down the barriers and were charging towards them. ‘I jumped out with the umbrella in my hand. I was thinking, “I’ve got to smile, I’ve got to be happy, I’ve got to get out of the helicopter … Oh, the umbrella!” I put it up and the ferrule went through the helicopter’s blades. All I felt on my arm was this almighty bang! And the ferrule disappeared somewhere into the grass of this field in Porirua.

‘The next minute the public relations people came running towards me, an arm under each of my armpits, and I was frogmarched away. I don’t know what happened to the bear. The PR people ran me across the grass towards a truck on the back of which was a band. Russ Wilson (from the advertising agency) said, “Get that bloody band off the truck!” I was supposed to walk behind the band, but I had to ride on the back of the truck, because people were grabbing and touching me, wanting to talk to Ronald.’

Once Ronald reached the stage set up in the shopping centre’s car park, Wally Morris introduced him to the crowd before the magic show began. With his mind in a whirl, he was grateful for instructions held up in front of him. ‘Peter Harvo (from the ad agency), being very clever, had taken a sheet of paper and written a list. One: Say hello; Two: Wave; Three: Smile; Four: Keep talking. I think he had about five magic tricks and the six or seventh one was a donut-eating competition. We had a pole with donuts hanging off the end of the cord. Round donuts – can you imagine that? McDonald’s doesn’t even sell donuts.’

‘But the impact of Ronald’s first visit and first show in New Zealand was just massive. I just couldn’t believe the popularity.’

New country, new store – pandemonium in Porirua

The stampede that ensued was greater than anything the team had anticipated, even at their most optimistic. ‘We hadn’t even learned to cook a hamburger and here were people at the door in their thousands, waving these newspaper coupons,’ said Lionel, to whom the job fell of serving the country’s first Big Mac. ‘We had to lock the doors and let in people in shifts of about twenty because the restaurant only seated 140. It was already bulging at the seams, and the crowd in front of the counter would have exceeded 140 by themselves. To stop a riot occurring, we actually had to lock the doors and let some people out before we let new people into the restaurant.’

The pandemonium at the front was matched only by the bedlam at the back. Ray Stonelake recalled trying to push fry racks over eighteen or twenty electrical leads that were still lying on the floor at the back of the kitchen, ‘where installers of various sorts were still screwing lights in, adjusting timers and fixing things’. It was almost a physical impossibility to push a trolley on wheels over all the electrical cords, he said. ‘It was a nightmare. God, it was terrible!’ Irene Kilgour remembered her wrists aching so badly from repeatedly squeezing the ketchup dispenser that she had to appeal for help. But a worse affliction than pain was the sensation of undiluted fear. ‘Looking up at these masses of people, I’d never been so scared in all my life, and it just went on hour after hour.’

When they couldn’t cope any longer, the doors were locked. It was ten o’clock before the last customers were finally despatched – and four o’clock the following morning before the kitchen was cleaned up. ‘Suddenly,’ said Lionel Whitehead, ‘we realised we had about two hours to get home and have some sleep before coming back and getting ready for the next day.’ McDonald’s had opened. Wally’s great dream had become a reality.

Today, McDonald’s has over 160 restaurants in New Zealand which are 80%  owned by local franchisees, employ over 10,000 Kiwis and serve one million customers a week. Not bad for Ray Kroc’s ‘more-dead-than-alive hole!’

About the book

The new book on the history of McDonald's in New ZealandGolden Arches Under Southern Skies was produced by Renaissance Publishing to celebrate the first 35 years of McDonald’s in New Zealand. A portion of the proceeds of sale went to Ronald McDonald House Charities. Our thanks to Renaissance Publishing, author Rosemary Hepőzden and McDonald’s Restaurants NZ for permission to reproduce this extract. Read our review here.

Competition winners

Thanks to McDonald's, we had 10 copies of Golden Arches Under Southern Skies to give away to readers who signed up for our email newsletter or completed a survey on our website. The lucky winners were:

  • Richard Avery
  • Alasdair Baxter
  • Rex Cuff
  • Noel Delahunt
  • Bhavna Patel
  • Eben Potgeiter
  • Shannon Potroz
  • Savneel Sharma
  • Nicola Tang
  • Brad White
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