FTC Decides Maybe It's Time To Start Asking Why McDonalds Ice Cream Machines Are Broken All The Damn Time
from the let-the-ice-cream-flow! dept
In unsurprising news, the McDonald’s McFlurry machine is down. In actual surprising news, the FTC is looking into it. (Paywall ahead, but here’s another option.)
The FTC reached out to McDonald’s franchisees this summer seeking information on what, exactly, is going on with the broken ice cream machine problem, according to a letter it sent, viewed by The Wall Street Journal, and people familiar with the matter. The FTC declined to comment.
Well, it’s a start. The notoriously unreliable machines are pretty much the only option for McDonalds franchise owners, who are tied into lengthy service contracts that include immediate termination of warranties should any McDonalds employees have the gall to repair their own machines. And knowing what is in need of fixing is deliberately obscured by the manufacturer, Taylor Commercial Foodservice, which weaponizes obscure error codes and overall inscrutability to ensure a steady stream of service call revenue.
There’s another solution out there, but it doesn’t have the approval of the McDonalds corporation. And, since it could severely diminish one of Taylor’s revenue streams, attempts have been made by the company to remove the competitor from the equation.
Two years ago, a company called Kytch Inc. developed a device that attaches to Taylor’s ice cream machines and sends franchise owners messages alerting them to possible breakdowns and other problems that demand attention. It also makes sense of Taylor’s nonsensical codes, allowing owners to actually take care of the issues, rather than just tell customers the machine is down yet again and wait for a Taylor rep to arrive.
Taylor was so opposed to Kytch helping people repair the machines they had purchased that they spent months trying to trick Kytch into sending one so the company could, allegedly, reverse engineer it. That’s the accusation Kytch is making in court, where it has just secured a small win that compels Taylor to stop doing whatever it’s doing with the Kytch device it obtained and return the device to its maker.
In a recent legal victory, a judge awarded a temporary restraining order against Taylor after Kytch had alleged in a complaint that the McFlurry machine manufacturer had gotten its hands on a Kytch Solution Devices with the express intention of learning its trade secrets. The complaint also alleged that Taylor had told McDonald’s and its franchisees to stop using Kytch machines on the grounds that they were dangerous, and that the company had begun development on its own version of the Kytch system at the same time.
Now, all of this has dovetailed into the involvement of the FTC: the years of flaky performance by Taylor ice cream machines, the mostly unheeded complaints of McDonalds franchise owners, the apparent attempt to strongarm Kytch out of the repair business. But, at this point, the FTC is really only investigating the possibility of opening an investigation. This is a “preliminary investigation” which mainly involves asking for some input from Taylor machine owners and, if there’s enough alleged to move forward, the FTC will presumably do that. But it’s a start. And there will be at least one party listening to the complaints of franchise owners: the federal government.
Filed Under: ftc, mcflurry, ownership, repairs, right to repair
Companies: kytch, mcdonald's, taylor commercial foodservice
Comments on “FTC Decides Maybe It's Time To Start Asking Why McDonalds Ice Cream Machines Are Broken All The Damn Time”
This comment has been flagged by the community. Click here to show it.
Hire The Modders Model
There’s a way that Taylor could earn the respect of the public by buying out Kytch and its employees to make diagnostic devices of their own. But we’ve seen how Taylor earns around 25% of its income from service calls, so my guess is that they will opt for the money over the respectable solution.
Re: Hire The Modders Model
earn the respect of the public by buying out Kytch and its employees to make diagnostic devices of their own.
Ah yes. The Micro$oft model – Embrace, Extend, Extinguish.
Besides which, the Kytch equipment is designed to help NON-Taylor people understand what it is that Taylor is obfuscating. Taylor already have the technology to accurately and clearly report what the problems are, so they don’t NEED 3rd party equipment to do that, but that would mean that customers would know how they could fix the problem themselves, thus destroying Taylor’s income stream.
Taylor’s intention is to understand how the Kytch machines work and kybosh them. You can be sure that any "Kytch alternative" installed by Taylor will work (ish) at first, then be less effective, then just become a white elephant.
Today it is ice cream machines, tomorrow it is BIG GREEN TRACTORS. It’s just mafioso-style tactics by the corporations.
Re: Re: Hire The Modders Model
The whole thing is that Taylor originally worked with Kytch, obviously hoping the business would fail or that Taylor could otherwise control it. Then they started trying to get a hold of Kytch devices after cutting off contact, to see if they could sabotage them or make patent claims. After that, they started threatening McDonald’s franchises and corporate.
If they wanted to "buy them out and integrate the product", they could have simply continued to work with Kytch. Or, you know, not made a complete shit system and obfuscated the hell out of it in the first place.
Re: Hire The Modders Model
What does Taylor care of the respect of the public? They aren’t it’s customers. I bet 99% of the population has never even heard the name.
It’s McDonalds that should earn the respect of the public, by giving Taylor the boot and replacing those junk machines with something that actually works.
Re: Re: Hire The Modders Model
There is literally one other option, which has its own issues.
Re: Re: Hire The Modders Model
Except if McDonald’s gave Taylor the boot now, it would be breaching an exclusive contract, and Taylor would sue.
Re: Re: Re: Hire The Modders Model
If that contract does not include penalties and remedies for poor performance by Taylor then McDonald’s lawyersall need to be fired as a first step.
So?
A gov agency is finally doing a job?
That could have been solved years ago?
Do you know how many Ice cream machines out there can do Tons more then the one McD’s uses?
Love those LEASE options, dont you?
What about the free market?
I thought the USA was all about the "free market" and market forces. After many years of reading the articles on Techdirt I am now convinced that it is the complete opposite. The market in the USA is strictly regulated by the state so as to stifle all competition. Only a handful of the largest incumbents are allowed to operate, by government mandate. The government has granted these legacy conglomerations a strict monopoly (or duopoly) in each of their various industries. Any potential new entrants into the market are immediately shut down by the full force of the state’s power. The USA is purported to be a democracy, but the two parties are really just two sides of the same coin, the coin that they get paid with by the corporations which are actually running the country. So in a sense, the USA is a one party state.
I won’t even touch on the pathological militarism, the total disregard for basic human rights, the white minority rule, systemic racism….etc. etc. etc.
P.S. And stop forcing women to give live birth to unwanted foetuses!
Re: What about the free market?
The US is essentially a capitalist dictatorship.
This comment has been flagged by the community. Click here to show it.
Re: What about the free market?
It’s easier for people like you to weaponize the debate by using terms like "fetus" instead of "baby" to make that unique life form seem less human and thus, easier to destroy. But answer me this: what do you have to say about the many women who’ve been forced to have abortions they didn’t want? Do you really think everyone who gets one or who tries to get one wants to be there and do it? More are there against their will than you think. Yet you act like they don’t exist. I’d like to see you be as passionate about helping THEM as you seem to be about the those supposedly on the other side.
Re: Re:
On the flip side: What are you doing to help women who are essentially forced to give birth because abortions are either outlawed (in letter or in spirit) or incredibly costly (in both time and money) to access? How are you helping them handle the sudden change in an economic situation that a child brings with them?
Re: Re: What about the free market?
1) many compared to what? How often does this happen compared to the number of women who want abortions, or who want them but can’t get them?
2) is forcing a woman to have an abortion not already illegal? Is there anyone in favor of allowing this? Is not your question a straw man?
Re: Re: What about the free market?
"It’s easier for people like you to weaponize the debate by using terms like "fetus" instead of "baby"’
If you don;t like the actual scientific term for a thing, that’s not on us. Take it up with the people actually went to school for a decade or more to study these things, bro.
"But answer me this: what do you have to say about the many women who’ve been forced to have abortions they didn’t want?"
What about that totally unrelated thing you just asked for your shitty bad faith argument?
Re: What about the free market?
That isn’t generally necessary. Without regulation, markets often devolve to oligopoly or monopoly on their own, because it’s more profitable that way. The government really just needs to do nothing to prevent it, and that’s what happens (not always, but a lot).
Re: Re: What about the free market?
i.e., There really is no such thing as a free market. What most pundits call a "free market", we call "unchecked greed".
Re: Re: Re: What about the free market?
That is not what I said. There is no such thing as an unregulated free market.
Speak for yourself. A free market is one with lots of competitors (actual competitors, not colluders). Their greed is checked by the necessity to compete with one another for customers. If greed is unchecked, that means there are no forces requiring them to provide good service or fair prices, which means it’s not a free market.
Re: Re: Re:2 What about the free market?
No, it is not. A company like Comcast will obviously beg to differ with such an assessment. Any "free market" will tend towards monopoly in the long term, because that is precisely what greed does. And if you add checks on that greed, such as through enforcement of competition law, then what you have is technically not a free market.
Re: Re: Re:3 What about the free market?
Comcast is not in a competitive market.
If you scroll up a bit, you’ll see that is what I mentioned earlier.
What I mean by a free market is one with a lot of competition, where competitors can freely enter. This often, perhaps usually, requires some degree of regulation by government. Apparently you are referring to a market with no governmental interference.
Re: Re: Re:4 What about the free market?
I’ll just note that loads of the Free Market enthusiasts literally define a Free Market as one without any regulation.
So you both have a good point, depending on how you define "Free Market".
Re: What about the free market?
"The market in the USA is strictly regulated by the state so as to stifle all competition. Only a handful of the largest incumbents are allowed to operate, by government mandate. The government has granted these legacy conglomerations a strict monopoly (or duopoly) in each of their various industries. Any potential new entrants into the market are immediately shut down by the full force of the state’s power."
I’m struggling to understand what any of that has to do with this article. There’s some truth to your claims (and some mistruths) but what’s the relevance here? Neither Taylor nor McDonalds have a ‘government granted monopoly’. This situation has nothing to do with government control, in fact it’s about the slim possibility of a government agency maybe doing it’s supposed job of keeping companies from abusing their market position, the exact opposite of your complaint.
Re: Re: What about the free market?
Your missing the part where the market consolidates along markets. McDonalds at some point gets large enough to buy smaller players just to shut them down or to expand the empire in some form.
This can be in the form of a Takeover, buying say Burger King, or in vertical integration by buying the chicken and logistics networks. Each purchase means McDonalds is a single, larger customer and sometimes the sole buyer of specific goods or services.
Let the market do its thing and you will watch each business consume across their industry, then up and down the value chain in an attempt to make your $3 trinket cost fractions of a penny cheaper so they can always show 7% growth each year to investors.
Re: Re: Re: What about the free market?
I think the fast food market might not be the best example to use in a conversation about monopolies.
Does that legal judgment even make sense?
Re: Does that legal judgment even make sense?
Not Really —
Unless Kytch has a patent on some sensor they add to Taylor’s machine, they are doing what any reasonably skilled practitioner of embedded systems does:
Connects a bunch of sensors to a computer (and possibly some actuators) and processes that, along with an understanding of what the machine is supposed to do into something intelligible to the human beings in the process.
It’s not new, and it’s not my fault it’s nonobvious to Taylor. As to trade secret, well, I think right of first sale should come in here — sending out copies of this nice diagnostic machine to hundreds of franchisee locations should not prevent one of them from handing one off to Taylor. Whether Taylor has good enough engineers, on the other hand…remains to be seen.
Re: Re: Does that legal judgment even make sense?
What does a Kytch customer agree to at the time of purchase?
Re: Re: Does that legal judgment even make sense?
What does a Kytch customer agree to at the time of purchase?
Re: Does that legal judgment even make sense?
Well, let’s see, what causes of action come to mind in under two minutes? Defamation, libel and/or slander, anticompetitive practices by a dominant player. To get their hands on a device, maybe someone offered an inducement to someone to violate a contractual agreement in service of running a competitor out of business.
I’m looking forward to reading Kytch’s complaint and the court ruling.
Re: Re: Does that legal judgment even make sense?
Yup, nothing like reading actual court filings…
But again, seems to be a lot of boneheadedness…why wouldn’t Taylor just sweet talk a McDonald’s franchisee into letting them come for a visit and work for a bit with their now always-up ice cream machine? A skilled designer is gonna figure it out lickety split, and never need more than a few interviews with operators.
I’d love to see someone comment on what sorts of trade secret protection are legal and enforceable when shipping hundreds of machines to customers like this.
Re: Re: Re: Does that legal judgment even make sense?
Because that would reduce Taylor’s profits.
This comment has been flagged by the community. Click here to show it.
Being the underdog doesn't make up for their hypocrisy
I want to see Kytch do well for creating a superior product that helps their customers, but their stance on reverse engineering is ridiculous. It was ok for Kytch to do to Taylor to make their diagnostic device, but not ok for Taylor to do. Kytch can’t have it both ways, or at least they shouldn’t be able to have it both ways. And neither should Taylor.
Re: Being the underdog doesn't make up for their hypocrisy
But there is a difference, Kytch reverse engineered the Taylor device so that they could make a diagnostic device to work along side the Taylor device. Taylor reverse engineered the Kytch device so that they could replicate it and make their own version.
Re: Re: Being the underdog doesn't make up for their hypocrisy
In both cases the companies are reverse engineering to make devices to take away the other companies existing business.
Reverse engineering is legal.
If either company has patents then they can sue over those. If not? Well, tough.
Re: Re: Re:
Kytch’s device would only feasibly “take away” part of Taylor’s business (the servicing of Taylor machines). Even then, Taylor could make up for that by, y’know, actually selling its customers a device that would let them properly service Taylor machines. Kytch can’t put Taylor out of business even if it tried to do that.
Taylor, however, is flat-out trying to put Kytch out of business for doing something Taylor wouldn’t: selling Taylor customers a device that would let them properly service Taylor machines. Taylor could legitimately destroy Kytch—we’re talking “scorched earth, nothing lives, nobody tries to rebuild there for a century” levels of annihilation—if the courts find in its favor.
Re: Re: Re:2 Re:
I suspect that Taylor isn’t interested in selling their own diagnostic device. They could already do that trivially. Or simply make their own product more better, with more informative messages and the ability for customers to resolve common problems.
They want to reverse engineer the competitor’s product to see if there is anything that they can sue them over.
Re: Re: Being the underdog doesn't make up for their hypocrisy
They don’t even want their own version. They don’t want any version in existence.
Re: Re: Being the underdog doesn't make up for their hypocrisy
"Taylor reverse engineered the Kytch device so that they could replicate it and make their own version."
Taylor don’t need their own device, they already know how to service their machines. They don’t need anyone else’s tech to help them. It seems far more likely to me that they’re looking for evidence of IP infringement, or at least enough info yo start a legal war they’re probably better poised to win.
Re: Re: Re: Being the underdog doesn't make up for their hypocri
With all due respect, it’s not clear taylor has the necessary talent to know exactly how to service their machines and/or make the process easy for their end user McDonald’s franchisees.
That requires people with skill in the art, and they just might not like working for an amoral outfit like Taylor.
Does that legal judgment even make sense?
Trade Secrets aren’t like Patents.
Their protection lies in the fact that they are secret, but competitors (and others) are generally allowed to figure out other companies.
IANAL, but isn’t it equally and legally legitimate for Taylor and for Kytch to examine each others’ devices to learn their "secrets"?
Re: Does that legal judgment even make sense?
There were contracts involved, the devices weren’t supposed to handed to Taylor, as Taylor had already and first created the adversarial relationship. Taylor denies ever having seen any of the devices (never mind evidence pointing to this) – so how could they have even reverse-engineered anything they have not seen?
Never mind that they do not need to reverse-engineer anything. They only need to stop purposely obfuscating the user-interface of their own system. They do not want to do this.
About time!
I am just so glad, so relieved to see the Feds moving on to an important topic and away from the trivial distraction of topics like the price of insulin and EpiPens. It makes me much less frustrated by the amount I pay in taxes.
Re: About time!
I reiterate – Today it is ice cream machines, tomorrow it is BIG GREEN TRACTORS.
Kytch is implementing the "Right-to-repair". Whilst their attempts to prevent reverse-engineering are probably pointless and seem kack-handed, they have provided Macdonald’s franchisees with a way to have repairs done by someone OTHER than Taylor. It would seem Taylors’ intent is NOT to create a similar (and competing) device for the benefit of those franchisees, but rather to understand how the Kytch device works, and ensure that the Taylor devices are changed (encrypted – whatever……) to PREVENT the Kytch devices from working (as well maybe) once the next Taylor firmware update occurs. Linux on a PS3 anyone?
Device Restrictions Manifest for ice-cream machines.
There's a simpler solution...
Just go find a local Ice Cream shop/stand and get your ice cream, generally they have more flavors and is just better service.
Next, they need to look into why Windows is broken all of the time.
Re: Re:
Because someone keeps throwing baseballs through it.
Am I the only one who thinks this all came to a head once Ted Cruz had a hankering for a McFlurry and was met with broken machine after broken machine?
Does that legal judgment even make sense?
Well, let’s see, what causes of action come to mind in under two minutes? Defamation, libel and/or slander, anticompetitive practices by a dominant player. To get their hands on a device, maybe someone offered an inducement to someone to violate a contractual agreement in service of running a competitor out of business.
I’m looking forward to reading Kytch’s complaint and the court ruling.
This "Products as a service" scam really needs to go just in general.
Re: Re:
But it won’t, because it’s too profitable.
What is the point for Big Mac?
I’m slightly confused how it makes sense from MacDonalds’ standpoint to work with Taylor. I don’t go to Mac often but I heard this "the ice cream machine at Mac is always broken" thing so often I though it was a meme, not reality.
How does it make sense for them that every time they make a commercial for the McFluffy, or whatever it is called, everybody is reminded of their crappy service?
If I was a negotiator for MacDonalds I would negotiate fixed rates for maintenance and a minimum up-time requirement, especially if I heard every other day that the damn machines are always broken. I understand that many are franchise holders but that is the point of franchising isn’t it, collective bargaining power?
Re: What is the point for Big Mac?
It is pretty strange that such a powerful company has let this go on for so long.
I thought the point was to be able to benefit from the parent’s brand identity and marketing. If all you wanted was collective bargaining, you’d be better off forming a coalition of locally owned restaurants to bargain with suppliers.
Re: Re: What is the point for Big Mac?
I thought the point was to be able to benefit from the parent’s brand identity and marketing.
Fair enough. So can we settle for a point?
Re: Re: What is the point for Big Mac?
Because it makes the company a lot of money.
Re: Re: Re: What is the point for Big Mac?
Does Taylor supply the machines at low cost for the corporation, and gouges the franchisees to make up for it? That sounds right – McDonald’s and Taylor colluding to make money for themselves at the expense of those further down the chain. I guess McD’s has decided the money is worth pissing off their customers on the regular.
Interesting. I’ve yet to see a broken ice cream machine in a McDonnalds here in Brazil. Bear with me, I like their ice cream, we all have our flaws. I wonder why it’s different.
Re: Re:
Maybe they don’t use the Taylor machines in Brazil.
Re: Re: Re:
They quite possibly use the Italian ones, or something completely different, given this is not in the States.
Does Brazil even have the combined shake/ice cream machine?
wow! and that’s the most important problem on the Planet?
Expectation?
WHY do I expect that the ONLY reason someone in the Govt. is "looking into" the practices of McD is because THEY wanted a McFlurry themselves, and were denied,…