McDonald’s is being sued for close to $1 billion by a start-up that says the fast-food giant thwarted its attempts to solve the company’s infamous soft serve ice cream machines.
On Tuesday, Kytch's co-founders Melissa Nelson and Jeremy O'Sullivan filed a complaint against McDonald’s in which they accuse the restaurant chain of false advertising and interfering with its relationship with customers. The company is hoping to win $900 million in damages.
According to Wired, Kytch launched a phone-sized device in 2019 that allows franchise owners to troubleshoot problems with the ice cream machines.
After installing the device into one of the soft serve machines, it’s able to intercept the machine’s internal communications and and send them out through the web or smart phone. This allows owners and employees to have a better understanding of what's going on with a problematic machine so they can get it back up running faster.
McDonald’s ice cream machines are notorious for always being broken. Reports have claimed the issue stems from machines’ daily cleaning cycle, which they’re programed to run each night. This process heats the machine in order to destroy bacteria, but it common stalls mid-way, and they only way to fix it is to have a technician come in, which McDonald’s owners say is complicated as well as pricey.
While Kytch’s device seems like a genius way to employees a way to fix the machines on their own and better serve customer, the company doesn’t appear to agree.
In the lawsuit, Kytch claims that McDonald’s sent out an email in 2019 to all of its franchises instructing employees to remove the device from their ice cream machines. The reason provided was that the Kytch device is able to breach confidential information and may pose a safety hazard.
Furthermore, Kytch alleges that McDonald’s later used that same reasoning to introduce and promote a new ice cream machine, which was produced by Taylor, the fast food company’s long-time manufacturing partner. The new ice cream machines reportedly share similar features to the Kytch device, though they’ve yet to be installed in most McDonald’s outlets.
Kytch argues that McDonald’s owes them damages since their allegations have disrupted the sales of their device. They also say that McDonald’s claims the Kytch device is unsafe is an unfounded claim and tarnishes their reputation. McDonald’s even allegedly told competitor fast food chains to beware of the start-up’s device for fear it wasn’t safe.
"They've tarnished our name. They scared off our customers and ruined our business. They were anti-competitive. They lied about a product that they said would be released,” Nelson stated.
Kytch says the $900 million is what it would have made if McDonald’s hadn’t sabotaged its business. The Richest will keep you update as this nine-figure lawsuit progresses.
Sources: Wired, National Post, New York Post,
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