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Ice cream machine hackers sue McDonald's

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Re: Ice cream machine hackers sue McDonald's

#11

Post by jaywalk »

maerF0x0 wrote: post #2

I cant think of anything more definitionally anti-competitive than keeping mcflurry machines available so you can crush any DQ that pops up in your vicinity by fixing it ("oh whoops... it was unplugged!"), and then also crushing a business that aims to solve your problem to help serve customers better. Let's get the FTC on this, afaik it's illegal to advertise a product you have no intention of actually serving. eg:…

And now that car dealer ads have to specify the exact car they're referring to (by VIN or stock number), that one car will often be the only one the amazing deal applies to and once it's gone, so is the deal.

At least somebody can actually get that deal now, so it's better I guess.

Re: Ice cream machine hackers sue McDonald's

#14

Post by daenz »

Kytch built a device that gave the ice cream machines remote debugging. They sold them to franchises. McDonalds got weird about this and told franchises that they weren't safe, and that they've got a new ice cream machines that already has that feature. Then McDonalds reached out to other companies and said not to use the startup's device. The startup wants $900M because "that's what we would've been worth" if McDonalds hadn't scared everybody off.

It sounds like Kytch wants to be a legal thorn in McDonald's side until they are paid off. How can a startup afford this? Do they work out some agreement with lawyers to only pay when they win?

Re: Ice cream machine hackers sue McDonald's

#15

Post by penjelly »

hammock wrote: post #5
maerF0x0 wrote: post #2

I cant think of anything more definitionally anti-competitive than keeping mcflurry machines available so you can crush any DQ that pops up in your vicinity by fixing it ("oh whoops... it was unplugged!"), and then also crushing a business that aims to solve your problem to help serve customers better. Let's get the FTC on this, afaik it's illegal to advertise a product you have no intention of actually serving. eg:…

I read the article and DQ wasn't mentioned. What are you getting at?

parents point is that operating the machines regularly is of no interest to mcdonalds (likely bad margins) and its only interested in ensuring other niche fast food restos dont start to take up market share instead.

ie: if i want icecream i can get it at macdonalds, instead if DQ, unless the machines are broken. if DQ gains significant market share they "fix" the machines and DQ loses its market share.

not saying this is fact. just fleshing out parents

Re: Ice cream machine hackers sue McDonald's

#16

Post by jacobr1 »

bena wrote: post #4
raldi wrote: post #3

Earlier quoted context omitted.

I don’t understand your opening sentence. Why would they keep it unplugged?

The gist I'm getting is that McDonald's doesn't want to be in the ice cream/soft serve business. But it also doesn't want more competition than it already has. So every McDonald's has an ice cream machine as a more sort of "break glass in case of emergency" situation. Or in this case "in case of DQ". But if there is no DQ in the area, why operate the machine? Just have it be "broken". It's not like people have an opt…

I think it is less a matter of intent and more a matter of incentives. McDonald's is probably perfectly happy to be selling more ice-cream and make money that way. But they just don't care about maintenance (franchise reasonability) and it isn't impacting the bottom line significantly, so nobody really wants to fix the contracts and/or vendor performance issues. If there was a better competitor out there, McDonalds might use them, but they just don't care enough (meaning aren't incentivized enough) at the corporate level.

Re: Ice cream machine hackers sue McDonald's

#17

Post by bombcar »

daenz wrote: post #14

Kytch built a device that gave the ice cream machines remote debugging. They sold them to franchises. McDonalds got weird about this and told franchises that they weren't safe, and that they've got a new ice cream machines that already has that feature. Then McDonalds reached out to other companies and said not to use the startup's device. The startup wants $900M because "that's what we would've been worth" if McDona…

Yep, lawyers can take cases on either for a small fee + percentage of any settlement, or even just entirely on the chance of a win.

The hope is to threaten McDonalds for a billion dollars (pinky) and get a settlement for a few million out of court and wrap things up quietly.

Happens more often than you'd like.

Re: Ice cream machine hackers sue McDonald's

#18

Post by daenz »

>Kytch has argued that Taylor was incentivized to keep its machines broken; repair and maintenance contracts across its business lines accounted for a quarter of the company's revenue stream in 2018, according to a document Taylor published at the time. But Kytch cofounders Nelson and O'Sullivan admit that doesn't explain why McDonald's would similarly seek to prevent a fix for its embarrassing—and expensive—ice cream machine failure rates.

This is strange. Another comment mentioned how the existence of these broken ice-cream machines is anti-competitive towards businesses like Dairy Queen. Does this explain why the machines are always broken? Taylor gets repair contracts that are worth less than the business McDonalds would lose to Dairy Queen?

Re: Ice cream machine hackers sue McDonald's

#19

Post by cactus2093 »

bena wrote: post #4
raldi wrote: post #3

Earlier quoted context omitted.

I don’t understand your opening sentence. Why would they keep it unplugged?

The gist I'm getting is that McDonald's doesn't want to be in the ice cream/soft serve business. But it also doesn't want more competition than it already has. So every McDonald's has an ice cream machine as a more sort of "break glass in case of emergency" situation. Or in this case "in case of DQ". But if there is no DQ in the area, why operate the machine? Just have it be "broken". It's not like people have an opt…

> But if there is no DQ in the area, why operate the machine?

Why operate the grill or fryer? To sell food and make money. Instead of selling someone a meal for $7 McDonalds can sell them a meal + a mcflurry for $10. Why wouldn't they want to do this?

It doesn't make any sense that a bunch of franchise owners are all in together on some kind of ice cream conspiracy. Surely the truth is less interesting, it's most likely just a boring cost/benefit analysis. There seems to be some flaw with the machines they use that make them particularly prone to breaking down and difficult to maintain. So some stores that don't sell a lot of ice cream anyway decide it's not worth the cost of keeping them running, while other stores that sell more do keep them running.

And surely it's no coincidence that the markets where people buy more ice cream are also where Dairy Queen stores are more likely to open up.

Re: Ice cream machine hackers sue McDonald's

#20

Post by dahart »

billbrown wrote: post #12
0des wrote: post #8

Don't light your grill in someone else's lawn and expect your party keep on forever.

If you are a two-person startup, the last thing you should be doing in the face of a market disruption is protracted litigation. Pivot, just pivot.

Pivot to what? Their product is focused on a specific niche market with a specific niche problem, and the entire market is being closed. Why not take a moon-shot stab at fighting for it, when the sentiment for people stuck with these machines seems to be wildly in their favor? From my armchair it seems plausible there could be a legal outcome in Kytch’s favor because the sale and lack of adequate maintenance of these machines may be bordering on illegal.
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