Jerry Bambery

March 1, 2007 Daniel Vance

Long-time McDonald’s owner/operator shares real-life experiences and Big Macs with humanity.

Jerry wore a happy face. But inside he was crying.

Through his company BAMCO, Inc., he owned and operated McDonald’s franchises in Northfield, Faribault, and three in Mankato. He had every reason to be hilariously happy, including his selling of Happy Meals, and having been with McDonald’s since 1958—billions and billions of sandwiches before Ray Kroc dreamed up two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun. Having been in on the ground floor of the greatest restaurant success story of all time, Jerry was so steeped in the happy ways of McDonald’s that he and it were as one.

His restaurants were thriving, actually booming, eventually grossing more than $12 million annually.

And yet on the inside he felt depressed as if in a bottomless pit.

History records a number of people having battles with the inner demons of major depression, including Abraham Lincoln, Beethoven, Charles Dickens, and Winston Churchill. Rest assured that hundreds more fighting major depression are reading this story right now. Our cover subject over the years not only had his depressive bouts, he was knocked down and hospitalized three times, as if he were Rocky Balboa and the depression the punching Apollo Creed.

Our story has a happy ending though, because Jerry Bambery rose from the canvas to seek help.

This chilly day in 2007 at age 65, he smiles a great deal more—though not too much nor too confidently about his business and mental health triumphs. He is a private person, yet one finally able and ready to fully share his heart concerning business and life.

CONNECT: What is your opinion of Morgan Spurlock’s documentary Super Size Me, in which a man ate every meal at McDonald’s over a month’s time and claimed his health worsened and that he gained weight?

JERRY BAMBERY: It’s simply another stab at McDonald’s. Super Size Me runs contrary to the notion that people have a right to choose. We don’t force big meals on people. Personally, I find it difficult to believe he gained that much weight. Testimony exists of people that have eaten two Big Macs a day for the last ten years, for instance, and they are in good, trim shape. But in our society the media seem to have the last word. Our packaging and sandwich sizes are made to appeal to what the customer wants—and customers eat what they like. Customers also have a general idea of the nutritional elements in our food because, more and more, we have made that information available. We don’t have any secrets, so why not put the information out there.

Do you see McDonald’s eliminating trans fat soon? And do you think local governments, such as New York City, should be legislating it?

McDonald’s was working on the trans fat issue before 1985, when I was with the corporation. Some of the top nutrition people in the industry are on the corporate staff. Eliminating trans fat isn’t something we are forced to do—it’s something we want to do.

We know there are products containing less trans fat. The problem for us is, that in order to maintain consistency with our french fries, which is our primary use for oil, there isn’t enough supply of the newer oils to meet our demand. Because of customer taste and acceptance issues, we just can’t begin using new oils in Minnesota and not in New York, for instance. As for the State of Minnesota mandating the use—that goes against my conservative nature. Responsible corporations should take changes like that upon themselves and they will do it in a far better way. I don’t think mandating its use is necessary. That’s too much government.

What if Mankato City Council suddenly decreed that restaurants could not use oils high in trans fat?

Before any type of local legislation occurs, you first have to examine all uses of oils, whether that is a first-class restaurant with a white tablecloth or a box of cereal purchased off the shelf. A ban would have to be unilateral. If there is a way to eliminate it unilaterally, then I’m all for it. I’m against the notion of our being singled out just because we are McDonald’s. It is not American to single out one company.

How much has the threat of being sued changed the way McDonald’s does business? I’m thinking of the customer winning a multi-million dollar lawsuit after spilling hot coffee on her lap.

McDonald’s doesn’t exist day-by-day fearing lawsuits. The real story about that 80-some-year-old woman spilling coffee in her lap was questionable then, and it is questionable now. The media said the settlement was for $8 million, but I guarantee you it wasn’t. The coffee served to that woman could not have been hotter than 190 degrees, which is the highest temperature coffee can come through the grounds and decanter and be served at. Our serving temperature is 175 to 180 degrees. I understand her daughter filed the lawsuit. It was not an $8 million settlement. We are insured against those things and we don’t have issues with legitimate claims. Accidents happen.

Not long ago, another fast-food chain had problems with its produce. What sort of protections along the line do you have to insulate customers from salmonella, E. Coli, and listeria, for instance?

McDonald’s has stringent standards all the way to and with the producer. We go out in the fields, be it for tomatoes or lettuce for our salads, to make sure suppliers are doing their utmost. Once the product gets to the distribution center, the same standards apply. Once at the restaurant, we have very stringent standards. On every shift we have to have at least one qualified person with food safety class training. Hand washing is an absolute rule, God’s law, mandated by the health department. If an employee scratches an ear or touches their hair, for example, they have to go sanitize their hands. Of course, sanitizing alone doesn’t guarantee perfect sanitation, but it’s the best defense. The way we wash our utensils and care for them is done to exacting standards. Why we keep restrooms clean isn’t just so the customer can see a clean restroom—we want to keep it sanitary.

Do you yourself clean restrooms?

I started out at age 17 in McDonald’s cleaning restrooms. I do it today—and did it this morning. In the Madison Avenue store I noticed soap on the lavatory and wiped it off, and I told the manager about a light bulb out in the ceiling. That is my role. I don’t work in the kitchen anymore, though I travel through it because I want to say hi to the employees. I love doing that. These parts of the business I’m still passionate about because the passion has been ingrained in me. I have been at McDonald’s 48 years. I am privileged to have been in this environment, not so much for the length of time, but for the education, the exposure, the understanding of business, and the working with people, the latter being my true joy in the business.

This is all part of my strong personal philosophy of stewardship. Stewardship isn’t just about giving money. It’s about giving everything you have, including knowledge and wisdom. The best thing about this business is seeing everyone working here growing as people and being better prepared to go out into the world. That’s my number one priority. I’m not about profit. Sure I’m a capitalist, I’m in it for profit, but I’m not out to maximize it. I tell my people to optimize it. We try doing our best and let everything else, including the profits, fall in place.

Early on, McDonald’s taught me simple rules. In a penny business, if you watch the pennies, the dollars will take care of themselves. Don’t waste. Sell what you buy. Be aware of your expenditures. A good manager should know how many dollars of labor he has on the floor at all times. He or she should know what a minute’s worth of time costs. These are simple rules. Good managers know these rules.

When I started, we had a manual about a half-inch thick covering everything. Today, the ceiling isn’t tall enough to hold all our manuals stacked on top of each other. If you condense it all down though, really our business is all about those ten or twelve basic rules that some very astute businessmen taught me when I was 17, 18 and 19. I was given a managerial opportunity then, even though I didn’t have a college education. But we were dedicated and demonstrated a willingness to put forth the effort, trying to do better each day. Yesterday’s standard isn’t good enough for today or tomorrow. You have to always be improving.

Your life growing up?

I was born and raised in northern Minnesota in Cloquet. My father was the county attorney and in 1958 when I was 16 he lost the election. We were a family of nine children. His decision was to not move the family until I had graduated from high school, because I was a senior then.

We moved to St. Louis Park and a McDonald’s was five blocks away. My father ate there every evening, a hamburger, fry and a shake, which cost 45 cents. That store was one of the first in Minnesota. He sent his three sons in and they were hired. I was the oldest and began working part-time. During the summer there wasn’t a limit—like there is today—on the number of hours we could work. There were no overtime laws. We were paid a dollar an hour. We worked up to 90 hours a week and I mean we worked hard. When finding out how much time my friend and I were putting in, our boss said we couldn’t do it anymore because we were making more money than the assistant manager. So he cut us back to about 70 hours a week.

I didn’t know what I wanted to do with life. I entered the University of Minnesota in 1959-1960, but did not do well. I left college after being offered an assistant manager’s position at the McDonald’s. When I told my father I was dropping out, he just made me promise that if something better came along I’d take it. For the next eight or nine years, I remained there as that organization grew to seven restaurants. In 1969, they sold out to the McDonald’s corporation. By then I was a supervisor and remained with the corporation. One of my former bosses with the Minneapolis organization said we were in an industry that had politics, infighting and sandboxitis.

Sandboxitis?

Protecting your turf. That boss said we all should have a Plan B, meaning an exit strategy from the industry, and keep fine-tuning and tweaking it. He was right. Eventually, it took me about two years to put my Plan B into effect and I resigned in 1985 to be a McDonald’s owner-operator. I purchased the McDonald’s at Highways 169 and 14 in Mankato from the company, and six months later acquired Madison Avenue. When first coming to Mankato, all I wanted to do was run two restaurants the best way I knew. I had been teaching the running of restaurants for years, working with operators to get them to aspire to the highest standards of delivering quality, service, cleanliness and value. Teaching is one thing and doing it is something else I learned. Now I am blessed with two daughters and a son-in-law passionate about the business. I’m not fading into the sunset. But I am learning to give up control. And they are doing a fabulous job.

I’ve heard you went to a psychologist to help you with the transition?

Yes, about 18 months. The first thing we identified was that my communication wasn’t good or healthy toward my two daughters, their husbands, and employees. I thought I was good at communicating, but learned I really wasn’t. People were getting honest with me.

Would you define your management style then as old school?

I was autocratic and domineering, and always thought a little fear wouldn’t hurt. It wasn’t a style McDonald’s taught. I had grown into it, and it became acceptable because I was the boss. Of course, with old school you never tell the boss what you don’t like about him.

Here I had two daughters having to deal with my style for several years. I was wondering why they weren’t grabbing hold of the business and running with it. Finally, one day about four years ago, Keri, my daughter, the CFO, said we had to talk. Very emotionally, she explained that she and my other daughter were ready to quit because I was impossible to work with. I found out Colleen had the same feelings. How had I missed this? How had I been so blind to it?

Keri, on her own and to her credit, set up an appointment with a psychologist. We went through a series of interviews and profiles to help us understand where we each were coming from. I learned a lot about myself and have made adjustments. That was the starting point. I am not saying as for communication we are now perfect by any means, but we are closer to what we perceive to be the ideal than we were. I am far more sensitive to my daughters, where I really wasn’t before.

So are they now afraid of giving you their opinions?

Not now, and they do it pretty freely. They are doing such a good job running with it that they don’t always keep me tuned into everything going on. I sometimes have an issue with that. I am always appealing to them to keep me in the loop, but often it’s information I don’t really need. I have given them authority along with responsibility—and I have to accept they are doing their best to exercise that authority and responsibility. Yes, they are growing, but so is dear old Dad at age 65.

Dan, over the years, I’ve had my bouts with depression. For many years I tried containing and hiding it. After I came to Mankato, my oldest brother said I shouldn’t try hiding it, that it would be discovered.

Perhaps six or seven years ago we had a manager’s celebration at Country Inn & Suites to recognize manager achievements. We had applied for a grant from Ronald McDonald House for money to help Yellow Ribbon Suicide Prevention. When a person from the hospital was talking about suicide, I noticed two people get up and leave. Eventually, the speaker from ISJ and my daughter went out into the hall. As it turned out, the two people leaving were boyfriend and girlfriend, and the former had been depressed and had seriously talked of suicide. He had come very close.

Was there a time when you thought of suicide?

Not really. As I understand it, everyone thinks about it from time to time. I never seriously did because I’ve always had a sense of hope and a strong faith, which has carried me through many serious bouts of depression.

Let me finish with the gathering at Country Inn & Suites. I was asked to say a few words and became very emotional. I knew I had to talk to the managers about my own circumstance. This was the first time I had talked in public about my depression. I knew I had to be honest and straightforward about it, which was very difficult for me. I did the best I could and sort of stumbled through. Colleen held my hand. After my talk, she said, “Now you can understand why my father has been the way he’s been since 1985.” That comment about knocked me over.

I had been hospitalized at least three times for major bouts with depression. People don’t talk about depression, but they don’t talk about suicide either. It’s all in the closet. What value is there in keeping it there? I realized then that the only value in my life’s experiences are in sharing them.

I continued visiting my psychologist. At one point I was seeing him every week, then every two weeks, then once a month. I haven’t seen him now for maybe six months. I am a deep thinker and have always tried figuring things out. In that last meeting with him it came down to the point that we are the way we are because of every single decision we have made in life. I looked at my psychologist, and said, “So does that mean I chose depression?” He just nodded, yes.

Man, did that light switch go on. At that moment I had to hold myself accountable. No one else had gotten me to that point. It was a final moment of knowing myself well enough to know that what I have been saying about personal responsibility, what I’ve been talking about, that what I fully believed applied to me as well.

What about people saying depression is biologically based?

Sure that’s part of it. But it’s not the sole factor. No one can convince me that depression is totally physical. In certain cases it may be a factor. What separates lower animal life from humans is a will to choose. We either choose good or bad. There is no in between.

I became involved with Yellow Ribbon Suicide Prevention because of a good friend losing his 21-year-old son. He was a very good college student, well adjusted by all accounts, and had a lovely girlfriend. He had been in the school counselor’s office three days prior to hanging himself. It was devastating. Yellow Ribbon exists for the purpose of educating people that it’s all right to ask for help. Usually, depression precedes suicide.

I was invited onto the Yellow Ribbon board. I’m developing a relationship with Gov. Tim Pawlenty and when seeing him I give him my McDonald’s business card, my business card with EPS Technologies, which is another business I’m involved in, and lastly I tell him never to forget mental health issues. This country does not accept mental health as important. You can break nineteen bones in your body and get care, but if you’re depressed, you are a leper.

What are the necessary steps for acquiring a McDonald’s franchise?

Obviously, I had an advantage because I was a McDonald’s corporate employee for twenty-five years. For a new licensee coming in, he or she has to spend the equivalent of six months full-time working in a McDonald’s learning the fundamentals of the kitchen, the customer, and core operations. That’s most critical. The next piece is having the financial wherewithal, and if it’s a new store, to finance the equipment, fixtures, and exterior. Currently, McDonald’s has a non-refundable $45,000 franchise fee.

If you have an outstanding candidate without the financial wherewithal, the company can lease the entire operation, and then the candidate can have an opportunity to buy it once it’s up and running. That arrangement is the exception rather than the rule. Then there are acquisitions of existing stores. There is a guideline you use to price the business based on cash flow, physical condition, and reinvestments required. It’s negotiated.

Where are your locations?

Three in Mankato, at Highways 14 and 169, Madison Avenue, and Adams Street across from River Hills Mall. We are in Faribault and Northfield. Our five locations gross $12 million a year, and no one store is that much better than the others in terms of sales.

Who owns the locations in St. Peter, Fairmont, Blue Earth, Waseca, St. James and New Ulm?

Margaret Kropinski, the sister-in-law of Elliot Eisman, who owns Medford, Owatonna, and Waseca, owns St. Peter and New Ulm. Wes Clerc, a former corporate employee and also a top-notch operator, with his son Rick, owns Fairmont, Windom, Blue Earth, and St. James.

Will a higher minimum wage affect your stores?

Sure it will. In the end, in order to stay in business you have to make a fair profit. We continually stay mindful of balancing costs against retail pricing. You can’t just arbitrarily raise your prices. There are other considerations, such as competition and the convenience factor.

Also price points on certain items?

Yes, definitely. There is federal legislation to raise the minimum wage to $7.25. It goes back to the consumer having to fund a minimum wage hike, because we can’t just raise our labor factor by a significant percentage and then shrink our bottom line.

So in a way it’s an indirect tax on the customer?

I like to say that when I’m dealing with legislators, because really they are imposing it on the public. As businesspeople, we have to figure out how to incorporate the dynamic of higher wages into the operation. So we take a look at all the items we sell, and figure out which of them have more resistance to increases than others, and we try coming up with ways of having a minimal impact on sales. We just don’t arbitrarily raise the price of french fries to $3, for instance. We will survive a minimum wage hike because everyone else has to do it. So there is some kind of a sick equality there.

Will you be shrinking your workforce because of it?

No, absolutely not. But higher wages does push us to invest more in equipment that will replace humans, such as automated fryers and automated basketing machines for potatoes and clam-shell grills that cook two sides at once—a patty in 38 seconds or a quarter-pound patty in 60 seconds. Also, by raising our prices even a bit because of minimum wage, we will lose a percentage of customers. That’s the dynamic.

You are an investor in EPS Technologies?

Yes, and I do consulting for Sam Roy, the CEO. We have a good relationship with MSU President Richard Davenport. The University qualified as a Center of Excellence, and the University picked EPS Technologies as a focus. We are happy and grateful.

EPS Technologies has a patented catalyst—intellectual property—that, when introduced to a flame or combustion, increases the amount of energy that unit of energy can produce. In other words, it’s about fuel efficiency. We make no specific claim about fuel efficiency—we know it happens. Most importantly, our technology reduces unhealthy emissions, the single biggest being nitrous oxide, one of the primary greenhouse gases. Even though there is great debate going on about what causes the holes in the ozone layer—I think the argument has merit, but among scientists it is undecided. I’m not going to wait around for the scientists to decide, because we know that if we reduce emissions it’s going to be a healthier world, whether that means less nitrous oxide, or sulfur dioxide, which is heavily produced by coal, or carbon dioxide, carbon monoxide, or other unburned hydrocarbons—and we can affect all those.

Why not license your product to someone like General Motors, rather than developing and manufacturing it yourselves?

That’s a possibility down the road. We will not move forward even attempting to sell a product until it’s been tested and verified to our satisfaction. With every client we want to do business with, we test the product with their equipment, using their testing machines and ours side by side, measuring five key gases.

We are in infancy. A unique situation occurs in the Midwest. Recently, legislation was passed eliminating any standard for emissions in ethanol plants, particularly of nitrous oxide. There is no standard now, so there isn’t any pressure for ethanol plants to comply. That takes away from our ability to sell product to them. So we are working with Dow, Conoco, and Mitsubishi. We are having remarkable results with straight diesel fuel.

We have some of the world’s top scientists in this field. They are on stipends, which they don’t collect, but accrue. They aren’t interested in monetary gain, but in the science and doing something for humanity. None of us in the company are or will be dependent on it to provide for an economic livelihood.

What do you miss most about Ray Kroc, founder of McDonald’s?

Oh, the inspiration. At home I have some very dear pieces from him, including a hand-written note congratulating me on twenty years with the corporation. I also have a hand-written note congratulating me on being the recipient of the President’s Award, which only went to the top one percent of people in the company. I attended dinners with him, sat beside him. In 1970, my wife Marilu on her own called Ray Kroc one day to invite him to our employee Christmas party. He flew up in the company plane. That night he declared Minneapolis a new district, which gave us more authority to build and organize. The next day I became the director of operations. In every venue I saw him in, he was always an inspiration—and he never once talked about profits. He only did it in the context of our making sure we helped the licensees make money, because if they did, McDonald’s would.

Do you eat at McDonald’s?

All the time. I still like the regular hamburger. I go right to the front counter to order because I don’t like going through the drive-thru.

And do you pay?

Absolutely. We have a credit card system that takes only four seconds to ring up an order. It used to take 30 seconds. I went to McDonald’s this morning for coffee. I bought breakfast for our group. It came to $5.68.

Remote Service

You now have off-site order takers for your Madison Avenue drive-thru. Why? Is this another example of becoming more efficient?

Only our Madison Avenue store is linked to a call-in center. It is a test store. Customer orders at the speaker go to order takers in North Dakota. Here are the advantages: 1) There is more clarity in getting the order because that’s all that particular order taker does is take orders, and they become proficient at it; and 2) That person displaces a person in the restaurant. So instead of needing 18 people working lunch hour, we need only 17. The call-in center costs a certain amount of money per transaction. —Jerry Bambery.

Good Abilities

I champion those agencies and efforts dealing with suicide and mental health issues. I’m also involved at MSU funding research that is trying to determine what special populations of mentally and physically disabled people can do. Society has done a good job learning what they can’t do; I want to find out what they can do. I am also involved with an MSU study trying to learn more about successful special education teachers and what keeps them in the occupation after others have long burned out. —Jerry Bambery.

Getting To Know You: Jerry (Gerald) Bambery

Born: October 26, 1941, in Cloquet, Minn.

Education: Cloquet High School graduate. Attended Univ. of Minnesota.

Home: Madison Lake, Minn.

Married to Marilu, children are Keri and Colleen.

Organization involvement: Salvation Army, MSU Foundation, Yellow Ribbon Suicide Prevention, Kids Against Hunger, MSU College of Business Advisory Council, Ronald McDonald House, Boy Scouts of America, Mankato Area Catholic Schools.