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FTC Is Investigating McFlurry Machines

Company accuses manufacturer of 'multimillion-dollar repair racket'
By Arden Dier,  Newser Staff
Posted Sep 2, 2021 11:20 AM CDT
FTC Is Investigating McFlurry Machines
The FTC is probing possible violations of antitrust law through McFlurry machine repairs.   (Wikimedia Commons/Faruk Ates)

(Newser) – McDonald's notoriously finicky McFlurry machines may be in violation of antitrust law, Gizmodo reports, based on a new investigation by the Federal Trade Commission. The agency is investigating why the machines so often fail amid a legal fight between the manufacturer, which has a monopoly on repairs, and a company that created a Wi-Fi-connected device to help franchise owners fix the machines on their own. Per the Wall Street Journal, the FTC contacted franchisees this summer asking for information on the machine—also needed to make soft cones and milkshakes—including how often McDonald's allows franchisees to service it.

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The machines undergo a nightly automated cleaning cycle to kill bacteria, but owners say this often causes failures, requiring manufacturer Taylor Commercial Foodservice to send a repairperson. That can be pricey and take time, which is why Jeremy O'Sullivan and Melissa Nelson created Kytch, a device that spits out real-time, easy-to-understand text and email alerts regarding issues. At one point, restaurant owners in 30 states were using the device. But late last year, McDonald's warned Kytch was unsanctioned and could pose a safety risk. Kytch sued Taylor in May, accusing the company of "a multimillion-dollar repair racket."

Taylor claims restaurant owners can repair the machines on their own, but doing so voids the warranty. It also denies that the machines are purposely designed "to be confusing or hard to repair"—though one longtime franchisee complains to the Journal that the machines were "so over-engineered it was silly." The FTC's letter, requesting to know how the world's largest fast-food chain reviews suppliers and equipment, makes clear that "the existence of a preliminary investigation does not indicate the FTC or its staff have found any wrongdoing." Taylor and Kytch tell the Journal they have not been contacted by the FTC. (Read more McFlurry stories.)

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