The Federal Trade Commission is working with McDonald’s Corp. MCD franchisees in an ongoing probe on why the fast-food chain’s McFlurry ice cream machines keep breaking down.
What Happened: The Wall Street Journal, citing an FTC letter to franchisees and input from unnamed “people familiar with the matter,” reported that the agency is seeking to determine how McDonald’s reviews its suppliers and equipment how often the franchisees are allowed to work on their own machines.
The FTC’s letter to franchisees cautioned that it's at the beginning of a fact-finding probe and “the existence of a preliminary investigation does not indicate the FTC or its staff have found any wrongdoing.”
Why It Happened: The ice cream machine has become so notorious for its unreliability that an online site called McBroken tracks the out-of-service machines in McDonald’s restaurants across the country. McDonald’s tried to make light of the situation last year by tweeting, “We have a joke about our soft serve machine but are worried it won’t work.”
However, franchisees don’t find it funny, with many complaining that the machines made by Taylor Company are too complex to operate and difficult to fix without calling in a repair technician.
A startup company called Kytch Inc. created the Kytch Solution Device that could identify and fix the ice cream machines. Kytch stated that Taylor intentionally created a “flawed code that caused the machines to malfunction,” thus enabling it to have a monopoly profit on machine repairs.
Kytch filed a lawsuit against Taylor in May claiming it made multiple attempts under fake names and email addresses to acquire Kytch Solution Device in order to determine how it worked. Last month, Kytch received a restraining order against Taylor, which was ordered by a judge to turn over its Kytch Solution Devices and “not use, copy, disclose, or otherwise make available in any way information, including formula, pattern, compilation, program, device, method, technique, or process obtained by any of them.”
Photo: A McFlurry in a London McDonald's. Photo by Magnus D / Wikimedia Commons.
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