Day 001 - 28 Jun 94 - Page 03

     
     1        complained of in the leaflet which is the subject of the
              libel action, or else reassert the truth of the original
     2        allegations or does both.  My Lord, I will return to all
              of this in more detail at a later stage.
     3
              First, I wish to say something about the McDonald's -- not
     4        very much because, of course, there will be a good deal of
              evidence about it during the course of the case -- my
     5        Lord, to understand why it is that McDonald's have sued
              these two individuals on this leaflet, and why they have
     6        pressed this action to trial, it is necessary to know
              something of their business.
     7
              My Lord, the company, an American company, was founded in
     8        1955 by a Mr. Ray Kroc.  It is called McDonald's because
              the original store in Des Plaines, Illinois, which sold
     9        hamburgers, milk shakes, french fries and so forth, was
              inspired by a fast service restaurant in California which
    10        Mr. Kroc had visited which was owned by two brothers
              called the McDonald's.  Mr. Kroc acquired the right to
         franchise the operation from the McDonald's brothers and
              eventually was able to buy the whole business.
    12
              The nature of the business, that is to say, hamburgers,
    13        milk shakes, french fries and so on, has remained the same
              in the intervening 39 years, but it has grown somewhat in
    14        size.  The 1993 Annual Report of the McDonald's
              Corporation which is in volume 3 of the trial bundles at
    15        tab 5 -- I do not ask your Lordship to get it out; I will
              read it out -- shows at page 135 of the bundles that there
    16        are now about 14,000 McDonald's restaurants worldwide,
              there having been only short of 8,000 in 1983; that these
    17        extend in 70 countries throughout the world as compared
              with 32 10 years before and their annual turnover is
    18        US $23.5 billion.
 
    19        In consequence, my Lord, McDonald's is now the largest
              food service organisation in the world.  My Lord, I note
    20        in passing (because this may be of some significance later
              on in the case) that worldwide about 70 per cent of the
         restaurants are operated by franchisees and under 20 per
              cent by the company itself and its subsidiaries.
    22
              There is a further ten per cent which are operated by what
    23        are called affiliates.  That is, roughly speaking, joint
              venture partnerships.  My Lord, that said, it should not
    24        be thought that McDonald's is likely to tolerate any
              departure by their franchisees or joint venture partners
    25        in the high standards they set for themselves.  On the
              contrary, any serious deviation in quality of foods or 
    26        service or in the treatment of their employees is quickly 
              and sometimes severely dealt with. 
    27
              My Lord, it is the fact that this is one of the principal
    28        reasons why this action has been brought, that McDonald's
              has for all the years of its existence set and maintained
    29        the highest standards in those areas as well as in the
              area of responsibility to various communities, large and
    30        small, in which it operates throughout the world.