McDonald’s Lawsuit Claims Restaurant Spread Lies About Company That Fixes McFlurry Machines

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McDonald’s McFlurry Machine Fixing Lawsuit Overview:

• Who: McDonald’s has been hit with a lawsuit from technology company Kytch, Inc.
• Why: The lawsuit alleges McDonald’s of lying about the safety of Kytch’s technology to kill competition with its own stalled software and continue a “service and repair racket” with McFlurry machine manufacturer Taylor.
• Where: The case is pending in Delaware federal court.

McDonald’s created “bogus ‘safety’ claims” about a company that invented technology to fix famously defective McFlurry machines to kill competition with its own stalled software and continue a “service and repair racket” with McFlurry machine manufacturer Taylor, a new lawsuit alleges.

Kytch, Inc. filed the lawsuit in Delaware federal court alleging violations of numerous trade and consumer laws and seeking hundreds of millions of dollars in damages, saying that McDonald’s and Taylor worked together against Kytch to create a stall tactic for McDonald’s and Taylor’s own product, Open Kitchen.

According to the lawsuit, Jeremy O’Sullivan and Melissa Nelson invented the Kytch Solution, which allows McDonald’s franchisees to monitor and control soft-serve machines remotely. Supported by a 2020 Business Insider article, the company’s proprietary technology gained popularity with franchisee owners, who have long been plagued by the broken ice cream machines.

“Some franchise operators have reported shelling out thousands of dollars per month in service fees to Taylor Company, the manufacturer of the machines, through its many franchised distributors,” the lawsuit says. It further alleges that McDonald’s and Taylor run a service and repair racket, collecting millions in fees from franchisee owners each year.

McDonald’s Claimed Kytch’s Technology Posed ‘Very Serious Safety Risks’

The positive media coverage of Kytch and its growing popularity made McDonald’s “all hot and heavy” and led the company to try and steal Kytch’s technology while notifying franchisee owners that Kytch’s system posed “very serious safety risks” for technicians and crews and could cause “serious human injury,” the lawsuit reads.

“Together they [McDonald’s and Taylor] fabricated bogus “safety” claims to mislead Kytch’s customers into believing that safety testing determined that the Kytch Solution would cause “serious human injury” to users — claims that are, and that McDonald’s and Taylor both knew at the time to be, demonstrably false,” the claim reads.

The company says the statements are clearly false as McDonald’s and Taylor have filed sworn declarations that they never tested the Kytch Solution; both McDonald’s and Taylor tried to obtain the devices through Kytch, but they were unwilling to sign binding non-disclosure agreements/non-compete agreements to do so. Intertek has certified that Kytch satisfies all electrical safety requirements in accordance with Underwriters Laboratories (UL) and Federal Communications Commission regulations, and Kytch has never received a report of injury caused by the Kytch Solution.

“McDonald’s and Taylor published these false claims to all of Kytch’s current customers and many of its potential customers, including to all McDonald’s operators in North America (and to Coca-Cola and Burger King),” the lawsuit reads. It adds that at the same time, McDonald’s and Taylor announced that they would be launching their competing Open Kitchen device in Q1 2021 “despite knowing all along they could never meet this deadline.”

“The purpose: to convince McDonald’s restaurant owners to cancel their contracts with Kytch and thwart Kytch’s forward momentum in the market giving McDonald’s and Taylor more time to develop their competing Open Kitchen system,” the lawsuit says.

Kytch says it is suing “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.”

In a statement to Law360, McDonald’s says it “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.”

McDonald’s is also facing another lawsuit, this time a class action filed by former employees that accuses the company of violating federal laws by sending misleading and confusing letters about extending their health insurance benefits, leading ex-workers to lose insurance and incur large healthcare bills during the pandemic.

Does your local McDonald’s have a functioning McFlurry machine? Let us know in the comments section below!

Kytch is represented by Brian E. Farnan and Michael J. Farnan of Farnan LLP, Jason Sheasby of Irell & Manella LLP and Elizabeth M. Locke and Daniel P. Watkins of Clare Locke LLP.

The McDonald’s McFlurry Machine Lawsuit is Kytch Inc. v. McDonald’s Corp., Case No. 1:22-cv-00279, in the U.S. District Court for the District of Delaware.

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