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The McDonald’s Ice Cream Machine Hacking Saga Has a New Twist

November 23, 2021 - Posted in News Posted by:

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Six months ago, a tiny startup called Kytch sued Taylor, the billion-dollar manufacturer of McDonald’s notoriously broken ice cream machines. For years Kytch had sold a small device that hacks those ice cream machines, letting McDonald’s restaurant owners better diagnose their maladies and make them work more reliably—only to find, according to Kytch’s legal complaint, that Taylor had conspired to copy its device and sabotage its business.

Now Kytch’s lawsuit has revealed another side to that story: the internal communications of Taylor itself. Recently released court documents appear to show that Taylor’s executives did view Kytch as a business threat and worked to copy its device’s features in a competing product—all while still failing to actually cure McDonald’s ice cream headaches.

In the discovery phase of the lawsuit Kytch filed in May, Taylor has been compelled to publicly file more than 800 pages of internal emails and presentations that mention its approach to Kytch. They show how, contrary to Taylor’s previous claims to , the company closely examined and sought to mimic specific Kytch features. The emails also show that at some points McDonald’s, not Taylor, led the effort to prevent restaurants from adopting Kytch’s gadgets.

“There was a concerted effort to not only obtain and copy our device and follow everything we were doing, but then also, when it hit a critical mass, to actually put us out of business,” says Kytch cofounder Melissa Nelson.

The still unfolding fight began with Kytch’s attempt, starting in 2019, to build and sell a device that could intercept the data on the Taylor C602 ice cream machines used by McDonald’s franchisees. McDonald’s ice cream machines are broken in roughly 10 percent of its restaurants, based on data gathered by the ice-cream-machine tracking service McBroken, and McDonald’s franchisees tell that better diagnostics can lead to faster fixes. (Certain regions often have even higher rates of out-of-order machines: McBroken found that McDonald’s ice cream machines in New York City were down between 20 and 40 percent of the time over just the past week, for instance.) The Wall Street Journal reported in September that even the Federal Trade Commission had recently asked McDonald’s franchisees about the ice cream machines’ frequent failure.

McDonald’s responded to Kytch’s growing sales by sending out a memo in the fall of 2020 to all franchisees warning them not to use the device, stating that it posed a physical safety risk, voided the Taylor machines’ warranties, and accessed its “proprietary data.” The memo recommended upgrading to a new, internet-connected device called the Taylor Shake Sundae Connectivity. Even now, that next-generation machine has yet to hit the market beyond a limited test. Kytch describes the McDonald’s message as “defamatory,” claiming it destroyed the business and left franchisees without a fix for their constantly borked ice cream machines.

Kytch responded by suing Taylor in May, as well as a Taylor distributor called TFG and a McDonald’s franchisee named Tyler Gamble, who had allegedly given Taylor and TFG access to Kytch’s device. The lawsuit claimed that by doing so, Gamble had breached Kytch’s contract, and that Taylor had misappropriated its trade secrets. Kytch’s cofounders told last spring that they believed Taylor had gone so far as to hire a private investigator firm to try to surreptitiously buy a Kytch device in an effort to analyze and copy it.