Hoping to fix McDonald’s broken ice cream machines, startup now sues for $900 million
A tech startup is suing McDonald’s after it says the fast food chain pulled the plug on a cloud-connected device it designed to fix the restaurant’s finicky ice cream machines.
Kytch, Inc. is seeking $900 million in a legal complaint filed Tuesday, March 1, against the fast food giant. The lengthy lawsuit, first reported by Wired, accuses the restaurant of false advertising and interfering with client contracts.
McDonald’s has called the company’s claims “meritless.”
“McDonald’s owes it to our customers, crew and franchisees to maintain our rigorous safety standards and work with fully vetted suppliers in that pursuit,” a restaurant spokesperson told McClatchy News in a statement. “Kytch’s claims are meritless, and we’ll respond to the complaint accordingly.”
‘Bogus safety claims’
California-based Kytch had hopes of solving the restaurant’s soft-serve woes once and for all, inventing a “phone-sized gadget” that would be installed inside the McDonald’s machines, Wired reported. The device connects to the machines to provide “remote control, real-time data & analytics, and AI-powered predictive maintenance” to cut machine downtime, according to Kytch’s website.
The company claims McDonald’s “joined forces” with Taylor Company, which manufactures the restaurant’s ice cream machines, to “drive Kytch out of the marketplace” by discouraging franchisees from using their technology.
“Together they fabricated bogus ‘safety’ claims to mislead Kytch customers into believing that safety testing determined that the Kytch Solution would cause ‘serious human injury’ to users” according to allegations made in the 133-page complaint.
McDonald’s has served “billions and billions” over the last eight decades and is perhaps best known for its famous French fries. But it has also become infamous for its shake machines going down, starving customers of their favorite hand-spun treats.
The seemingly perpetual issue led to the launch of McBroken.com, a tracker that provides real-time updates on which stores have a working ice cream machine and which don’t. Nearly 9% of machines in the U.S. were reported “broken” as of Friday, March 4, according to the website.
‘It was not dangerous, like they claimed’
In the lawsuit, Kytch co-founders Melissa Nelson and Jeremy O’Sullivan cited efforts by McDonald’s and Taylor to launch a similar ice cream machine “hack” technology for the “demonstrably false” safety claims made against the small startup. They also pointed to emails allegedly from McDonald’s executives directing franchisees to “remove the Kytch device from all machines and discontinue all use.”
McDonald’s warned the Kytch device could cause “potential equipment reliability issues,” according to the emails, and posed a “very serious safety risk to the crew ... attempting to clean or repair the machine,” given the remote-operated device may cause the shake machine to switch on during cleanings.
Speaking to Wired, Nelson said the allegations have resulted in still-broken McDonald’s ice cream machines and plummeting sales for Kytch.
“They’ve tarnished our name,” she told the outlet. “They scared off our customers and ruined our business. They were anti-competitive. They lied about a product that they said would be released.”
The co-founders said they intend to “set the record straight” after McDonald’s efforts to discredit them.
“Kytch brings this action to ... vindicate the company’s rights under civil law, curb McDonald’s anti-competitive conduct, to recover compensatory and punitive damages, to protect the consuming public from false and misleading advertisements and to finally fix McDonald’s broken soft-serve machines,” the lawsuit reads.
This story was originally published March 4, 2022 at 3:34 PM with the headline "Hoping to fix McDonald’s broken ice cream machines, startup now sues for $900 million."