McDonald's Faces $900M Lawsuit From Ice Cream Machine Repair Startup
A tech firm that makes devices to repair the machines is accusing the fast food chain of defamation.
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McDonald's sued by ice cream machine tech company.
McDonald's is famous for french fries, Ronald McDonald and soft serve ice cream. But now a company that repairs ice cream machines is suing the fast food giant to the tune of $900 million, alleging defamation and disparaging practices.
Kytch, a startup company that creates AI-powered devices to monitor ice cream machines, filed a lawsuit earlier this month claiming that McDonald's and the company that manufactures the chain's ice cream machines "joined forces to drive Kytch out of the marketplace." In the 133-page court filing, Kytch leveled accusations of stealing confidential information and misleading its customers about safety issues.
The tech firm developed a product that could adjust the machines' downtime and notify customers with digital alerts. Pointing to broken McDonald's soft-serve machines, Kytch founders Jeremy O'Sullivan and Melissa Nelson assert that the food chain and Taylor Company, the machine manufacturer, conspired to maintain a monopoly that costs franchisees thousands of dollars.
In the lawsuit, Kytch says its product was the only device on the market capable of fixing the ice cream machines. The suit alleges that after the National Owners Association (of McDonald's franchisees) endorsed Kytch, McDonald's and Taylor attempted to create their own competing tech based on Kytch's software -- a similar product "that would prevent Kytch from fixing the machines."
Additionally, Kytch alleges that McDonald's made up false safety allegations that mislead customers into believing Kytch's tech could cause serious injury. Kytch says the ongoing campaign ruined its business.
In the past, McDonald's has acknowledged that its ice cream machines haven't been the most reliable. In 2020, the company joked about it on Twitter.
we have a joke about our soft serve machine but we're worried it won't work
— McDonald's (@McDonalds) August 11, 2020
The fast food chain disputes the allegations and says that the lawsuit is baseless.
"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. Kytch's claims are meritless, and we'll respond to the complaint accordingly," the company said in a statement to CNET.