Tiny Tech Startup Sues McDonald's for $900M

That’s how much Kytch says company could be worth if McDonald’s hadn’t sabotaged it
By Mike L. Ford,  Newser Staff
Posted Mar 6, 2022 3:50 PM CST
Tiny Tech Startup Sues McDonald's for Destroying It
Customers buy ice cream at a McDonald's restaurant in Shanghai, China.   (AP Photo/Eugene Hoshiko, file)

Some 11% of McDonald’s ice cream machines are out of service right now, including roughly 1 in 3 in New York City, according to Mcbroken.com (sponsored by rival Jack in the Box). This is normal. Last year Daily Dot reported the persistent issues have led to memes and a TikTok anthem. It also provided a business opportunity for Melissa Nelson and Jeremy O’Sullivan, whose tech startup Kytch developed a device with smart technology to help franchisees maintain the notoriously finicky machines—until McDonald's stepped in and sent an ominous email to franchisees in November 2020 warning of warranty violations and the potential for serious injury (Kytch disputes that).

Now, Nelson and O'Sullivan are suing, to the tune of $900 million, the amount they say the company would have been worth had McDonald's not torpedoed its business. Wired has been tracking the story since signs of trouble emerged last April, when Kytch filed a lawsuit against Taylor, the McDonald’s manufacturing partner who makes the machine. That suit alleged Taylor got its hands on a Kytch device through a franchisee and worked to reverse-engineer it. "Kytch's cofounders have hinted that they intended to use the discovery process in their lawsuit against Taylor to dig up evidence for a suit against McDonald's too," writes Andy Greenberg for Wired.

He suggests they have been successful on that front and flags items contained in the 800 pages of internal Taylor emails Kytch obtained, including this: a Taylor exec's take after seeing the draft of that 2020 email: "I am a bit in shock they are willing to take such a strong position." McDonald's calls Kytch's claims "meritless"; O'Sullivan says he and Nelson are going to "keep on tunneling into this heart of darkness" as they get more discovery. (Read the full Wired piece for more on Kytch's stance.)

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