castilloYou’ve probably never heard of Tony Castillo. Even if you live in West Michigan and have eaten at one of his three McDonald’s franchises you probably don’t recognize the name. But an inspiring profile of Castillo by MLive provides a number of lessons about economics and business that everyone should learn from this entrepreneur.

Lesson #1: To be a successful business owner you should care about your stakeholders (customers, employees, suppliers, etc.)

Ask Tony Castillo what he loves about owning and operating McDonald’s franchises, and he will tell you it’s the people.

By that, he means both his customers and employees.

The purpose of a business is to serve the needs and wants of people. While that may sound like an obvious point, it is surprising how many people—including many business owners—tend to overlook or ignore that reality. Sure, one of the goals of business is to make a profit. But if all you want is to make money there are easier ways to do it than owning and operating a business, especially a customer-service oriented business.

Lesson #2: Serving the poor doesn’t always look like you’d expect

He sees his restaurants as places that remain affordable dining experiences, even for those of the most modest means.

In a perfect world, there would probably be no McDonalds (though in a perfect world, broccoli would taste like McDonald’s fries). But we live in an imperfect world where people have to make imperfect choices and tradeoffs. If the option is to regularly eat a healthy, balanced diet or subsist on fast food, you’d be wise to choose the former. But that is not the choice many poor people have to make.

A 2007 University of Washington survey found that while junk food costs as little as $1.76 per 1,000 calories, fresh vegetables and healthier foods can cost more than 10 times as much. Generally speaking, poor people aren’t choosing a McDonalds cheeseburger over a vegetable plate; they’re choosing the burger over a bologna sandwich.

Some people even argue the McDonald’s McDouble cheeseburger may be the “cheapest, most nutritious and bountiful food that has ever existed in human history.” Whether that is true or not, it’s certainly the case that Mr. Castillo’s businesses helps the poor by providing them cheap food.

Lesson #3 Social mobility matters more than income inequality or low wages

They are places where people with limited work experience or skills can find employment and potentially launch careers, he believes.
While McDonald’s – and the fast food industry in general – are often lambasted for unhealthy food options and low wages, Castillo says critics are missing the point.
“It’s not about where you start in your career but where you end,” Castillo said. “It’s not about minimum wage; it’s about maximum opportunity. I have some pretty good store managers who knock down some pretty good bank.”
[. . . ]
“I feel like I do more teaching in McDonald’s than I did formally in the classroom, which is kind of cool,” said Castillo, who regularly speaks at schools about the importance of education, hard work, setting goals and having an attitude of gratitude.

Our primary economic concerns should be for the well-being of the poor and for the creation of conditions that lead to greater human flourishing for all our neighbors. Focusing on income inequality and entry-level wages does neither. What does is social mobility, the ability of an individual or family to improve (or lower) their economic status.

Research has show that there is little or no correlation between social mobility and the sort of stuff that left-liberals might prefer to focus on: taxes (tax credits for the poor or higher taxes for the rich), college tuition rates, or the amount of extreme wealth in a region. One factor that does matter for social mobility is having the opportunity to increase one’s productivity, which requires gaining acquiring marketable skills. As an owner of a McDonalds, Mr. Castillo is not only running a restaurant, he’s operating a school for remedial work skills.

Lesson #4 To get ahead, give back to the community

. . . [Castillo and his wife] and their organization go above and beyond the call of duty to make significant contributions in the West Michigan community, particularly in Holland and the Hispanic community throughout Michigan.

Castillo is a role model for other Hispanic business leaders when it comes to philanthropy, says Carlos Sanchez. . . “He has a great heart and has done a lot of good stuff in Holland.”

See Lesson #1. The community is a stakeholder too.

There are other lessons that can be gleaned from the article about economic development, taking a chance on the “unemployable,” appreciating the dignity of work, etc. I recommend reading the profile even if (like me) you don’t live in West Michigan.

Castillo may be, as the article notes, among the top one percent—the “Best of the Best”—when it comes to McDonald’s owners, but in many ways he is typical of American entrepreneurs. Whether admired or despised (as many owners of a fast food restaurant are) they are quietly going about their business: helping the poor, serving their communities, and giving people an opportunity to have a better life. They are improving the world in little ways that often go unappreciated. Learning how to properly value their contributions is a lesson we all need to learn.

The Call of the Entrepreneur Study Guide

The Call of the Entrepreneur Study Guide

The Call of the Entrepreneur Study Guide examines several core themes of the documentary including the pernicious effects of zero-sum-game thinking, the role of entrepreneurs in creating new wealth, the risk-taking element of enterprise, and the role of limited government, property rights, and the rule of law, and free markets in unleashing the wealth-creating capacity of entrepreneurs as well as some topics beyond the material covered in the Film

Visit the official Call of the Entrepreneur website for more information.


  • RocksCryOut

    Whoa, whoa, whoa. You DO realize that Tony Castillo serves factory raised and slaughtered chicken in his restaurant, right? Perhaps a review of past columns is in order. I wasn’t aware that a social conscience toward human beings trumped detestable practices in the treatment of animals and the exploitation of their products.

  • srlucado

    = Some people even argue
    the McDonald’s McDouble cheeseburger may be the “cheapest, most
    nutritious and bountiful food that has ever existed in human history.” =

    Probably. It was certainly more true when they were a dollar (now they’re $1.19 in my neck of the woods). Two of those, a large drink, you’ve got a pretty filling meal for under four bucks.

    Thanks for highlighting that a McDonald’s franchise isn’t just some cog of a giant (therefore, according to some, “evil”) corporation, but very often a family business that is about a lot more than just slinging burgers.