Mr Davies died after a short illness, aged 67.

Mr Davies opened Ballarat's first McDonald's Restaurant at Bakery Hill in 1978, then set up a second store at Wendouree.

He was also on the Sovereign Hill board from 1993, serving as president from 2004 to 2006, and was a founding member and first chairman of the Committee for Ballarat, originally known as Ballarat Advantage.

He was also a Ballarat Community Enterprise chairman and the inaugural Ronald McDonald House Monash chairman.

Mr Davies' son Richard said his father believed passionately in the community of Ballarat.

"He wanted to give back as much as he could (and) if people follow his example then that's a wonderful legacy.

"He'd be prouder of that than anything he'd done."

Sovereign Hill chief executive officer Jeremy Johnson said it was a sad time for the organisation.

"Peter made a great contribution to the museum's development and was very generous with his time," Mr Johnson said.

"Beyond Sovereign Hill, he was a great contributor to the economic development of Ballarat."

Committee for Ballarat chairman Tony Chew said he was also saddened at Mr Davies' death.

"His commitment to the Ballarat community was a hallmark of his time in Ballarat," Mr Chew said.

"His legacy lives on, especially through the committee."

Fairfax Media regional manager Victoria, Bruce Morgan, said Mr Davies was a natural leader.

"He was always direct, but polite and he liked to get things done.

"Communities need people like Peter, they are few and far between," said Mr Morgan, who is also the general manager of The Courier.

Sovereign Hill board member and Art Gallery of Ballarat chairman Sari Baird said Mr Davies was a terrific supporter of women in Ballarat.

"I felt very supported and encouraged to express my views."

Mr Davies is survived by his children Richard, Kizanne, Samantha and Cameron, wife Pam and nine grandchildren.

A memorial service will be held at Doveton Park Funeral Service on Friday at 1pm. In lieu of flowers, the family has requested donations to the Sovereign Hill Foundation.