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submitted 1 year ago* (last edited 1 year ago) by misk@sopuli.xyz to c/technology@lemmy.world

Kytch, the company that tried to fix McDonald’s broken ice cream machines, has unearthed a 3-year-old email it says proves claims of an alleged plot to undermine their business.

A little over three years have passed since McDonald's sent out an email to thousands of its restaurant owners around the world that abruptly cut short the future of a three-person startup called Kytch—and with it, perhaps one of McDonald's best chances for fixing its famously out-of-order ice cream machines.

Until then, Kytch had been selling McDonald's restaurant owners a popular internet-connected gadget designed to attach to their notoriously fragile and often broken soft-serve McFlurry dispensers, manufactured by McDonalds equipment partner Taylor. The Kytch device would essentially hack into the ice cream machine's internals, monitor its operations, and send diagnostic data over the internet to an owner or manager to help keep it running. But despite Kytch's efforts to solve the Golden Arches’ intractable ice cream problems, a McDonald’s email in November 2020 warned its franchisees not to use Kytch, stating that it represented a safety hazard for staff. Kytch says its sales dried up practically overnight.

Now, after years of litigation, the ice-cream-hacking entrepreneurs have unearthed evidence that they say shows that Taylor, the soft-serve machine maker, helped engineer McDonald's Kytch-killing email—kneecapping the startup not because of any safety concern, but in a coordinated effort to undermine a potential competitor. And Taylor's alleged order, as Kytch now describes it, came all the way from the top.

On Wednesday, Kytch filed a newly unredacted motion for summary adjudication in its lawsuit against Taylor for alleged trade libel, tortious interference, and other claims. The new motion, which replaces a redacted version from August, refers to internal emails Taylor released in the discovery phase of the lawsuit, which were quietly unsealed over the summer. The motion focuses in particular on one email from Timothy FitzGerald, the CEO of Taylor parent company Middleby, that appears to suggest that either Middleby or McDonald's send a communication to McDonald's franchise owners to dissuade them from using Kytch's device.

“Not sure if there is anything we can do to slow up the franchise community on the other solution,” FitzGerald wrote on October 17, 2020. “Not sure what communication from either McD or Midd can or will go out.”

In their legal filing, the Kytch cofounders, of course, interpret “the other solution” to mean their product. In fact, FitzGerald's message was sent in an email thread that included Middleby's then COO, David Brewer, who had wondered earlier whether Middleby could instead acquire Kytch. Another Middleby executive responded to FitzGerald on October 17 to write that Taylor and McDonald’s had already met the previous day to discuss sending out a message to franchisees about McDonald’s lack of support for Kytch.

But Jeremy O'Sullivan, a Kytch cofounder, claims—and Kytch argues in its legal motion—that FitzGerald’s email nonetheless proves Taylor's intent to hamstring a potential rival. “It's the smoking gun,” O'Sullivan says of the email. “He's plotting our demise.”

Although FitzGerald's email doesn't actually order anyone to act against Kytch, the company’s motion argues that Taylor played a key role in what happened next. It's an “ambiguous yet direct message to his underlings,” argues Melissa Nelson, Kytch's other cofounder. “It's just like a mafia boss giving coded instructions to his team to whack someone."

On November 2, 2020, a little over two weeks after FitzGerald's open-ended suggestion that perhaps a “communication” from McDonald's or Middleby to franchisees could “slow up” adoption of “the other solution,” McDonald's sent out its email blast cautioning restaurant owners not to use Kytch's product.

The email stated that the Kytch gadget “allows complete access to all aspects of the equipment’s controller and confidential data”—meaning Taylor’s and McDonald’s data, not the restaurant owners’ data; that it “creates a potential very serious safety risk for the crew or technician attempting to clean or repair the machine"; and finally, that it could cause “serious human injury.” The email concluded with a warning in italics and bold: “McDonald’s strongly recommends that you remove the Kytch device from all machines and discontinue use.”

Kytch has long argued that McDonald’s safety warning was bogus: In its legal complaint, it noted that its devices received certification from Underwriters Laboratory, an independent product safety nonprofit, including meeting its safety standards. It also countered in the complaint any claim that a Kytch device's remote connection to an ice cream machine could result in the machine turning on while a person's hand was inside—in fact, Taylor's own manual advises unplugging the machine before servicing it, and removing the door of the machine to access its rotating barrels automatically disables its motor.

Kytch's legal motion now argues that FitzGerald's email reveals that the McDonald's warning to restaurant owners was never really about safety, so much as protecting its equipment partner from a startup that might represent competition. The CEO's email “essentially put into place their plan to defame us," Nelson says.

She and O’Sullivan also argue that the internal email directly contradicts FitzGerald’s public statements that Middleby hadn’t sought to kill Kytch. “We’re not in business to put other companies out of business,” FitzGerald told The New York Times early last year.

When WIRED reached out to Middleby, Taylor’s parent company, for comment, a spokesperson responded in a statement disputing Kytch’s interpretation of its internal emails. “McDonald’s decided to issue the November 2020 field brief on its own accord, not at Middleby or Taylor’s direction,” the statement reads. “Taylor stood, and continues to stand, by the accuracy of statements made in the field brief.” The spokesperson also notes that Taylor won an early ruling in the lawsuit against Kytch’s request for a preliminary injunction—which would have prevented Taylor from developing a device that Kytch claims was copied from its product—and promises an upcoming filing responding to Kytch’s argument, which court documents say will happen in early 2024.

At the time of McDonald's warning email to franchisees about Kytch, Taylor was developing its own internet-connected ice cream machine, what it referred to as Taylor Shake/Sundae Connectivity, which McDonald's recommended in the same email. But, even now, more than two years after it was promised for delivery, that device has yet to arrive in restaurants—and the publicly documented ice cream headaches at McDonald’s appear to have continued. According to the website McBroken, which tracks ice cream machine downtime at McDonald's restaurants across the US, between 13 percent and 17 percent of McDonald's restaurants have had broken ice cream machines at any given time just this month. That percentage has recently been as high as 35 percent in New York City and 28 percent in Washington, DC.

Taylor declined to comment on any upcoming internet-connected ice cream machine model. But that long-touted solution to the problem has still not been made available to franchisees, according to one McDonald's restaurant owner who goes by the handle McFranchisee (and previously used the handle McD Truth) on X. But McFranchisee says that Taylor has integrated those new features into its next model, which is expected to be available in four to six months. (McFranchisee has also criticized Kytch, claiming that the startup's failure was due to its own reliability problems and an increase in its prices, not a Taylor or McDonald's conspiracy against them.)

Despite the email from Middleby's CEO that Kytch claims suggests dissuading franchisees from using Kytch's product, Kytch argues that other documents released in the lawsuit’s discovery phase show McDonald's itself was also eager to stymie Kytch from the beginning. In February 2020, Taylor president Jeremy Dobrowolski wrote in another email that “McDonald's is all hot and heavy about” Kytch's growing use in restaurants. Before the company sent out its November 2 email warning franchisees about Kytch, Taylor and McDonald’s executives had a meeting to discuss the message, and a McDonald's exec also sent a draft to Taylor for its approval. A Taylor executive wrote to others within the ice cream machine company, “I am a bit in shock they are willing to take such a strong position.”

When WIRED reached out to McDonald’s for comment on Kytch’s new argument about the “smoking gun” email from Taylor’s CEO, a spokesperson responded with a statement: “McDonald’s won’t speculate about the intent behind this email discussion that we weren't a part of. The intent of our Nov. 2020 communication was to bring awareness to potential safety concerns regarding the unapproved Kytch device.”

In addition to its lawsuit against Taylor, Kytch is still pursuing a bigger lawsuit against McDonald's itself, asking for $900 million in damages for what it describes in its legal complaint as McDonald’s effort to “drive Kytch out of the marketplace.” That lawsuit against McDonald's, if it moves forward, may soon produce more answers explaining Kytch’s legal claims that McDonald's appears to have cooperated with Taylor in telling its customers not to use Kytch—even as many of its restaurants took a significant hit from lost ice cream sales.

In the meantime, Kytch says it plans, if necessary, to take the lawsuit against Taylor to trial, currently set to take place in May at Alameda County Superior Court in Oakland, California. “The conspiracy described in Kytch’s complaint involved folks at the highest levels of leadership, not just at Taylor but also at Middleby and at McDonald’s,” says Daniel Watkins, Kytch’s attorney. “We’re really looking forward to the opportunity to present it to an Oakland jury trial.”

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[-] lawrence@lemmy.world 267 points 1 year ago

TLDR:

Kytch, a startup, developed a device to fix McDonald's ice cream machines but faced opposition after a 2020 McDonald's email warning against its use, citing safety concerns. Kytch alleges this move, influenced by machine manufacturer Taylor, was to undermine them as a competitor. Recent litigation reveals an email from Taylor's CEO suggesting action against Kytch, which Kytch claims as evidence of a plot to sabotage their business.

Despite Taylor and McDonald's denials, Kytch continues legal action, asserting the email demonstrates a coordinated effort to eliminate competition.

[-] Lophostemon@aussie.zone 116 points 1 year ago

Corporate infighting in the macabre world of feeding people shit instead of real food.

[-] whodatdair@lemm.ee 64 points 1 year ago

lol, funny thing is that this isn’t really a story about ice cream machines - anyone who’s seen melted mcds ice cream foam knows that ain’t ice cream.

The frozen foam machines were intentionally hard to fix but someone figured it out and made a solution. Mcd was making money off fleecing franchise owners by having their company be the only ones who could fix it, so it looks like they did shady stuff to keep the grift going. For the ice foam. 🍦

[-] deweydecibel@lemmy.world 33 points 1 year ago* (last edited 1 year ago)

lol, funny thing is that this isn’t really a story about ice cream machines - anyone who’s seen melted mcds ice cream foam knows that ain’t ice cream.

It's funny people think this is some sort of secret. It's right in the name of the product: soft-serve.

That's what soft-serve is. Basically a bastardized form of ice-cream mixed with air to make it soft and add volume. The mix is often extended with stuff like CMC, but that's hardly unique to McDonald's.

The formulation of the mix at McDonald's is probably just "extended" more than you might find at other places, but the fact it's "foam" is hardly the scandal.

[-] funkless_eck@sh.itjust.works 4 points 1 year ago

and soft serve ice cream was partly invented by Maggie Thatcher, much-maligned ice queen of Britiain

[-] zarp86@sh.itjust.works 14 points 1 year ago

soft serve ice cream was partly invented by Maggie Thatcher, much-maligned ice queen of Britiain

This sounded so wild I looked it up.

Unfortunately, "most sources agree that the soft-serve industry arose in the United States, not Britain, and that it preceded Thatcher’s arrival at J. Lyons by about a decade. In 2008, Marian Burros offered a version of the conventional narrative in the Times."

https://www.newyorker.com/news/news-desk/the-margaret-thatcher-soft-serve-myth

[-] ericisshort@lemmy.world 26 points 1 year ago* (last edited 1 year ago)

Except it isn’t “corporate infighting” because that would imply fighting within a corporation when it’s simply fighting between a corporate machinery supplier and a competing startup that’s alleging illegal coordination and slander.

[-] Diplomjodler@feddit.de 73 points 1 year ago

McDonald's is a real estate company. Their business model is to extract the maximum amount of profit it is their franchisees, which are for the most part also their tenants. Nonetheless I don't really see the logic of acting so blatantly against the interests of their franchisees and customers. Unless of course they get huge kickbacks from the manufacturer.

[-] Kecessa@sh.itjust.works 63 points 1 year ago* (last edited 1 year ago)

They own the manufacturer and their "tenants" have to pay the manufacturer for repairs and they'll pay because otherwise their customers won't be happy that they can't get their icecream so it would mean losing sales.

[-] AnonStoleMyPants@sopuli.xyz 48 points 1 year ago

Big corporations doing shady shit fucking over (or buying out) small companies trying to fix the shady shit to make the lives of the customers of said big business a bit easier.

Not sure what to say. Seems like the standard nowadays.

[-] onlinepersona@programming.dev 35 points 1 year ago

If you depend on the good will of a company to exist, you better have a backup plan. In the pyramid of control, they are are the bottom and will be squished as soon as you become an inconvenience aka hurt the bottom line.

[-] Thcdenton@lemmy.world 25 points 1 year ago

I just want a fucking mcflurry

[-] WordBox@lemmy.world 15 points 1 year ago

Would you like your 10 bits of flavor at the top or bottom?

[-] zammy95@lemmy.world 7 points 1 year ago

I know no one's going to like the pay more money option, but I know on the app you can tell them to put 3x as many toppings in. It's almost TOO much, but damn is it good.

[-] ikidd@lemmy.world 22 points 1 year ago

If I ran a company where a third of the time one of the machines was down, I'd be looking for a different supplier of that machine. IDK why McD and their franchisees would put up with that sort of incompetence.

[-] almost1337@lemm.ee 22 points 1 year ago

Because the franchisees pay for the machines, and McDonald's corporate gets sweet kickbacks for locking them in to using those machines exclusively. And Taylor makes bank on service fees to repair "broken" machines.

[-] anonymouse@lemmings.world 19 points 1 year ago

Summary judgment seems unlikely given the vagueness of the email. But maybe it gives Taylor more incentive to offer a decent settlement to Kytch. If it goes to trial, will be interesting to see how it plays out.

[-] aard@kyu.de 21 points 1 year ago

Summary judgment seems unlikely given the vagueness of the email.

In other circumstances that kind of phrasing would be interpreted of intent to commit illegal activity - so I'd hope large companies can't just get away with openly planning shit by just ensuring vague phrasing.

[-] raynethackery@lemmy.world 10 points 1 year ago

Sounds like collusion to me. Too bad a RICO case can't be made in criminal court. I haven't had a mcflurry in years and now I never will. Can I be on the jury?

[-] PlutoniumAcid@lemmy.world 10 points 1 year ago
[-] misk@sopuli.xyz 57 points 1 year ago

Article added to post body now.

[-] DacoTaco@lemmy.world 10 points 1 year ago

Thanks for doing so!

[-] BearOfaTime@lemm.ee 6 points 1 year ago
[-] Varyk@sh.itjust.works 1 points 8 months ago* (last edited 8 months ago)

Uh-Oh, now kytch is getting sued by the law firm kytch was using to sue Taylor because kytch apparently hasn't paid that law firm.

https://legalnewsline.com/stories/657650426-va-law-firm-hopes-to-recoup-at-least-7-million-in-attorneys-fees-from-kytch

this post was submitted on 16 Dec 2023
562 points (99.0% liked)

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