McDonald’s ice cream desserts are famous not only for their taste but also for their scarcity. The machines used to make the McFlurry dodger are flashing enough to provoke memes on the internet, social media distress, and even conspiracy theories.
A Twitter wag described the disappointment of not being able to order a McFlurry an “American American experience,” along with learning to play the recorder. Even McDonald’s has had fun: “We have a joke about our soft service machine, but we’re worried it won’t work,” the company said. he tweeted Last fall.
Below is McBroken, a website that tracks the status of the ice cream machine at all McDonald’s locations in the United States. It shows that 30% of McFlurry manufacturers in New York City are currently at the top, while customers in Houston and Dallas can expect 20% and 15%, respectively, of the machines to be idle.
The attempt by at least one company to fix McFlurry machines has led to a legal confrontation with its manufacturer, Taylor Commercial Foodservice. In 2019, a startup called Kytch developed software to make it easier for restaurant owners to repair their broken ice cream machines. The technology was very popular, leading Kytch to a $ 50 million valuation, before Taylor abruptly banned restaurant owners from using it, according to an in-depth report from Wired.
Kytch founders sued Taylor and a McDonald’s franchisee in May, accusing them of illegally copying Kytch’s product to “protect a multimillion-dollar repair racket.” Taylor did not respond to a request for comment from CBS MoneyWatch.
Now, the feds are on the case. The Wall Street Journal reported Tuesday that the Federal Trade Commission has informed McDonald’s franchise owners of a “preliminary investigation” and asked about the use of franchisee’s equipment, including ice cream machines, as well as the how often homeowners can repair their own equipment. .
The agency’s letter said that “the existence of a preliminary investigation does not indicate that the FTC or its staff have found any fault,” according to the newspaper. The FTC declined to comment on CBS MoneyWatch.
In a statement, McDonald’s said it “has no reason to believe we are at the center of an FTC investigation” and that “we are working with fully verified partners who can reliably provide large-scale secure solutions.”
Explanations of McDonald’s broken machines tend to fall into two fields, according to Nathan Proctor, senior director of the U.S. public interest group’s Right to Repair campaign.
“Some people describe Taylor’s machines as too complex and too designed and say they break down because of that,” Proctor told CBS MoneyWatch. The other explanation is that Taylor and other heavy equipment manufacturers are aggressively trying to maintain their market share, in a world that is increasingly software-oriented, by extracting maintenance fees from captive franchisees.
Before Kytch appeared, the only option for restaurant operators to deal with a broken McFlurry machine was to call Taylor. The repair business was lucrative for the company, and generated $ 80 million in service fees in 2017, according to Kytch’s complaint. Taylor told the Wall Street Journal that machine owners voided the warranty if they tried to fix the machines on their own. It is illegal for companies to condition guarantees on the use of certain parts or services, a practice that antitrust law calls “binding”.
“Taylor has designed this product so that it breaks and you don’t know why, and someone has to come in,” Proctor said. “Franchisees have to buy these devices. They call Taylor and there is no incentive to design [the machines] to avoid service calls “.
The FTC issued in July a new policy generally in favor of the “right to redress,” an issue that President Joe Biden pointed out in a broad executive order anti-competitive practices. Now the agency is writing new rules targeting repair restrictions.
“If that [case] is related to that, it will be the first example of the FTC considering repair restrictions as something worth investigating, ”Proctor said.
“Manufacturers like to pretend they have the only solution to fix the device, and that’s nonsense,” he continued. “Sometimes [repair] it involves innovations that improve the product, as is the case with Kytch. Manufacturers would like to crush some of these competing innovations because it adds to the competition, and I don’t think they should be allowed to do that. ”