September 6, 2021
The Federal Trade Commission is said to be investigating why the burger chain’s ice cream machines break down so often—a matter that’s become the butt of late-night TV jokes and viral social media posts.
The FTC contacted McDonald’s franchise owners this summer seeking information on what the problem is with the chain’s ice cream machines, The Wall Street Journal reported on Wednesday, September 1—citing a letter from the FTC and sources familiar with the matter.
When reached for comment by The Post, representatives for the FTC declined to comment.
The broken machines have drawn the ire of franchisees, who say it leaves them unable to serve milkshakes, soft cones; and the preeminent McFlurry, a cup of ice cream blended with candy and cookies.
The machines require a nightly automated heat-cleaning cycle that can take up to four hours, the Journal reported; and the cleaning cycle can fail, which makes the machines unusable until a repair technician can fix them.
The dysfunctional machines make treats that account for about 60% of the chain’s dessert sales in the United States, the Journal reported, citing a consumer survey by research firm Technomic.
And the repeated breakdowns rub customers the wrong way, spurring some to even pen petitions calling for action.
“We are tired of being the butt of late night jokes. So are our customers and crews,” The National Owners Association, a group of franchisees, said in a May message to owners, according to the Journal.
Some franchise owners aren’t waiting for the corporate bosses to do something. Instead, they’re reportedly paying on their own to train staff on how to fix the machines.
Others have reached out to the machine’s manufacturer, Taylor Commercial Foodservice, which says the machines, themselves, are fine.
“A lot of what’s been broadcasted can be attributed to the lack of knowledge about the equipment and how they operate in the restaurants,” a Taylor representative told the Journal.
When working with dairy products, “you have to make sure the machine is cleaned properly. The machines are built up with a lot of interconnecting parts that have to operate in a complex environment and manner,” the representative added.
“There is no reason for us to purposely design our equipment to be confusing or hard to repair or hurt our operators.”
One startup, called Kytch, has tried to help franchisees address the problem by building a device that mounts on the ice cream machines and alerts owners about a breakdown through real-time text and email alerts.
At one point, McDonald’s franchisees in 30 states used Kytch’s devices, the company told the Journal, but then McDonald’s told franchisees that the devices aren’t sanctioned and that they could pose a safety hazard, which Kytch denies.
“Nothing is more important to us than delivering on our high standards for food quality and safety,” the corporate parent reportedly said to franchisees, “which is why we work with fully vetted partners that can reliably provide safe solutions at scale.”
Kytch responded in May with a lawsuit that accused Taylor, a separate repair company authorized to work on the ice cream machines and a McDonald’s franchisee of conspiring to steal Kytch’s technology and replicate its device.
“This is a case about corporate espionage and the extreme steps one manufacturer has taken to conceal and protect a multimillion-dollar repair racket,” attorneys for Kytch wrote in the complaint in California Superior Court in Alameda County. The case is pending.
But Taylor denied it had a copy of Kytch’s device or that it wanted to steal the startup’s technology.
“This is a case of a hacker—Kytch—incredibly accusing the hacked—Taylor—of theft,” lawyers for Taylor said in a court filing.
The Tennessee-based franchisee who was named in the suit also denied the allegations.
In an interview with the Journal, Kytch co-founder Jeremy O’Sullivan then accused Taylor of infringing on McDonald’s franchisees’ rights to alter and repair their ice cream machines.
Taylor responded by saying that owners are allowed to repair equipment as they see fit, but that the warranty on the machines isn’t valid if they fix them on their own, according to the Journal.
According to the Post, the FTC’s interest in the matter may stem from the Biden administration’s previously announced efforts to crack down on various manufacturers of products ranging from phones to farming equipment. Critics have alleged that major manufacturers of such products restrict customers from fixing the products themselves.
In July, Biden signed an executive order directing agencies to take the matter on, saying at the time in a fact sheet that Americans should be able to repair good they purchased on their own.
At the root of the FTC’s inquiry is how McDonald’s reviews suppliers and equipment, including the ice cream machines, and how often restaurant owners are allowed to work on their machines. The FTC inquiry is preliminary, and “the existence of a preliminary investigation does not indicate the FTC or its staff have found any wrongdoing,” the agency’s letter reportedly said.
In a statement, McDonald’s said it “has no reason to believe we are the focus of an FTC investigation.”
Research contact: @nypost