McDonald’s sued by startup for $900 million over broken ice cream machines

McDonald's sued by startup for $900 million over broken ice cream machines

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  • Kytch, a startup using technology to control ice cream machines, is suing McDonald’s.
  • The complaint accuses the channel of false advertising and interference in its customer contracts.
  • McDonald’s reportedly sent an email to franchisees saying the Kytch devices violated the machines’ warranties.

McDonald’s is being sued for $900 million by a startup, which created a device it says was designed to fix the chain’s ice cream machines.

In one trial filed March 1, Kytch accused McDonald’s of sending emails to franchisees saying Kytch’s devices violated machine warranties and intercepted their confidential information.

McDonald’s also said the device could pose a safety threat and cause injury, according to the lawsuit.

Kytch, which provides remote controls, maintenance and other tools for ice cream machines, called both claims false and defamatory. His lawsuit also criticized Taylor Company, which is the chain’s main supplier of ice cream machines.

Kytch co-founders Melissa Nelson and Jeremy O’Sullivan are seeking $900 million in damages. In addition to defamation, they accused McDonald’s of false advertising and interference with its contracts with its customers, according to the lawsuit.

In a statement sent to Insider, McDonald’s said it owes its customers, crew and franchisees to maintain its “rigorous safety standards and to work with fully vetted vendors in this pursuit.” The company added, “Kytch’s claims are without merit, and we will respond to the complaint accordingly.”

After learning that Kytch’s unauthorized device was being used at some McDonald’s restaurants, the fast-food chain said it issued a warning to franchisees about the possibility of injury to crew or maintenance personnel. This was due to the remote operating system that Kytch enables in its soft-serve machines, the company said.

McDonald’s said the safety certifications mentioned in Kytch’s complaint did not meet the chain’s strict requirements for all equipment in its restaurants. McDonald’s also said there were many different scenarios that could lead to possible injuries, which Kytch did not address.

In a statement, the founders of Kytch told Insider that McDonald’s had “destroyed” its business and that “nothing can undo this damage.”

O’Sullivan and Nelson added in the statement, “McDonald’s has worked closely with its serving machine maker, Taylor Company, to spread misinformation about our company, drive us out of the market and line their pockets.”

McBrokena website tracking the chain’s broken ice cream machines, said at the time of writing that 12.57% of the machines were out of order, with 36.73% not working in New York City.

Despite reported widespread problems with ice cream machines, “McDonald’s failed to significantly improve the machines, and the fast-food giant even granted Taylor exclusive rights to supply kitchen appliances to more than 13,000 outlets in the United States,” the lawsuit alleged.

He added, “This arrangement generates millions of dollars in revenue for Taylor and its network of franchise distributors.”

In September, Insider’s Mary Meisenzahl reported that the chain’s frequently broken ice cream machines were under investigation by the Federal Trade Commission. McDonald’s responded to that claim by saying it had no reason to believe it was under investigation.

O’Sullivan said Newsweek“If their mission was to destroy Kytch, they absolutely succeeded. What blew up in their faces was this massive trail of truly damning evidence of all the laws they broke.”

He added that it had taken him and Nelson months, “if not a full year”, to gather all the evidence and data and “convince some very smart lawyers to take this data and sue it against probably the most formidable company to sue, which is McDonald’s.”