Golden Arches Live Up to Their Name : Hard Work and Risks Prove Profitable for One Franchisee

When Carlton Hargrave was 8, he collected soda pop bottles and exchanged them for cash. By the time he was 12, he had two friends working for him on his paper route.

He worked his way through college in a small Ohio town, moved to California with 58 cents in his pocket and took two jobs and a wife.

With both of them working as teachers during the day and at odd jobs at night, the couple made ends meet. But it was a struggle.

Hargrave’s diligence has paid off. He now owns three McDonald’s fast-food franchises with a combined staff of 300. He is one of only two black franchisees in San Diego County--the corporation has 67 stores in the county, owned by 21 franchisees--and he said he has plans to expand.

Purchasing a McDonald’s store wasn’t easy, said Hargrave, 42. The initial cost of franchising a new store is $450,000 and, depending on location and volume, an existing store can cost $500,000 and up. Neither the company nor Hargrave would say how profitable a franchise can be.

“Once you’ve applied for a store, you’re selected from among thousands of applicants,” he said. “You don’t get to pick, they pick you.”

Hargrave said franchise applicants are subjected to rigorous training. After an initial interview, they are placed in a McDonald’s store for 40 hours, where they are taught and must perform the basic operations. During that time, corporate training and licensing managers evaluate the applicants’ communication skills and ability to adapt to the fast-paced environment.

If their evaluations are favorable, the applicants move into the “registered applicants program,” which takes one to two years to complete and covers all aspects of the corporation’s fast-food operations. Participants work a minimum of 20 hours a week at a store close to home so they can maintain a regular job while training.

Hargrave was working as an independent appraiser in Los Angeles when he decided to venture into a McDonald’s franchise. He was accepted into the registered applicants’ program in 1975 and, within 18 months, was offered a store in San Diego.

He said the decision to accept was a difficult one because he had to sell most of his property in order to purchase the store. Worse, he had to leave his wife, Alma, and sons, Kevin and Carlton, in Los Angeles while he settled in San Diego.

‘I Was Scared Stiff’

“I was scared stiff,” he said. “I was going to a new city, into a new business venture, and I had to leave my family in Los Angeles. Because of the image McDonald’s has had over the years, I decided to make the move. It had the reputation of being a quality company. I was willing to take the risk.”

The first three years were tough, he said. His first store, at Euclid and Logan avenues, was unsuccessful because of poor visibility and location.

“I was definitely struggling while running the Euclid store,” he said. “I survived the loss because I planned around the risks, and I made sure I didn’t owe any debts before investing.”

The corporation offered Hargrave another store, at 1260 12th Ave., which he opened in 1978. Things went smoothly, and, within two years, he franchised another store, at 929 Broadway Circle downtown.

“The downtown store wasn’t doing well for a while because of the demolition of the older building which would make way for what was to be Horton Plaza,” he said. “It took three years for the Horton store to pick up; it started getting busy when construction of Horton Plaza began in 1983.”

Most Lucrative of 3

By 1985, he had purchased another franchise at the 32nd Street Naval Station, the most lucrative of the three he now owns.

“Owning a franchise has its ups and downs,” Hargrave said. “But I live and breathe what I do, so I love it--it’s exciting. You meet a lot of different types of people, especially at the downtown stores. There’s the shoppers, the military, the business people and the homeless. It’s a diverse crowd down there.”

Hard work began at an early age for Hargrave.

“I remember as a kid collecting soda pop bottles from the neighbors’ back porches,” he said. “We worked out a deal where I would clear off their back porches if I could keep their empty pop bottles.”

Father Had 2 Jobs

He said much of his drive and determination came from his father.

“My father worked two jobs for over 11 years. He worked as a social worker in the day and a janitor at night; he was always doing something to support the family.”

Although Hargrave has experienced racial prejudice in business and life in general, he said, he is not one to dwell on negativity. He believes in overcoming obstacles by “keeping a positive mental attitude and knowing you can do it. If you believe in something, it’s obtainable.”