When Ray Kroc attempts to buy McDonald's from Dick and Mac, one of the brothers' demands is "1% if the company's profits in perpetuity". However, when negotiating, Ray Kroc refuses to put this demand in writing, in the form of a contract, and instead offers a handshake deal.

I wonder why the brothers, and most importantly their lawyer, did not object to this. Mac seemed to be reluctant while shaking Ray's hand, but no one from their party said anything.

All throughout the film we see how Ray slowly pushes the brothers out of their own company. In a scene before that, Ray even makes clear in a call to Dick, saying that he is ruthless in competition. Surely they would have known by that point that Ray wasn't trustworthy.

So why did they not refuse a non-contractual deal?


For the same reason that they agreed to sell the name in the first place: they had no leverage to fight it; even though they knew they were getting screwed over.

By that point, Ray had enough resources and determination to win any legal battle. Even though the brothers were in the right and could have gotten whatever they wanted from the legal standpoint; they didn’t have the means to go to court and fight for it. Ray says something to this effect shortly before the deal is made.

So even if the commissions had just been outright refused instead of promised in a non-binding way; there’s not much that the brothers could have done about it. Agreeing to the commission helped to move the deal along; but Ray had the power by that point to simply refuse it.

So the brothers had 2 choices at that point… take the money along with a hope of maybe getting the commissions also; or end up getting a new deal that didn’t involve commission. They didn’t have the power to force a third option of getting the money and the commissions in a legally-binding way.


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