Ice-Cream Machine Startup Takes on McDonald’s with a Whopping $900 Million Lawsuit
The makers of a device that repairs ice-cream machines filed…
The makers of a device that repairs ice-cream machines filed a $900 million lawsuit against international fast-food chain McDonald’s on Tuesday. It’s a fairly common occurrence around the world that while ordering an ice-cream at McDonald’s, you might be told that the machine is, unfortunately, out of order.
Founded in 2018 by Jeremy O’Sullivan and Melissa Nelson, Kytch Inc. aimed to help solve this problem. They manufacture tiny cloud-connected computers that sit inside an ice-cream machine, giving companies a clear diagnostic on their machines’ health, how correctly employees are using them, while ensuring energy savings as well.
This was great, until McDonalds’ old corporate greed entered the mix.
McDonalds and Taylor
According to Kytch’s 133-page court filing, both Mcdonald’s and Taylor — the company that makes the actual ice-cream machines — are running a shady campaign to discredit Kytch’s products.
Taylor currently has exclusive rights to repair the soft-serve machines at McDonalds, which according to Kytch, results in a ‘lucrative scheme’ to ‘line their own pockets’ between the companies. They also claimed that Taylor allowed its own machines to malfunction for the sake of long-term profit — a case that was investigated directly by the US Federal Trade Commission, according to the Wall Street Journal.
It was even covered in a major 2021 story from WIRED:
In fact, the Taylor ice cream machines inside McDonald’s are infamous for being constantly out of order. According to stats collected by the website https://t.co/pohrSmycRZ, between 5% and 16% of all US McDonald’s ice cream machines are offline at any given time 3/ pic.twitter.com/kJNRoHp7BL— WIRED (@WIRED) April 21, 2021
While Kytch received an endorsement from the National Restaurant Association for their product, McDonald’s and Taylor hoped to develop a similar device of their own. Aiming to run Kytch off the market, they ran false advertisements that claimed Kytch was unsafe, according to the latter’s court filing.
“The damage to Kytch was instant and monumental,” the company said in the filing. “McDonald’s unlawful conduct had dire financial consequences for Kytch, its founders, investors, and its employees.”
“Kytch brings this action to set the record straight, to vindicate the company’s rights under civil law, to 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 court filings read
Meanwhile, McDonalds has lashed out with their own public statement on the affair.
“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,” said a company spokesperson. “Kytch’s claims are meritless, and we’ll respond to the complaint accordingly.”
Who knew a simple McFlurry could stir up so much trouble?
(Featured Image Credits: Unsplash)