The makers of a device that repairs the ice-cream machines at McDonald’s filed a $900 million lawsuit against the international fast-food chain on Tuesday.
A small company known as Kytch is suing McDonald’s in a Delaware federal court for allegedly disparaging it through false advertisement, according to a 133-page court filing.
“Kytch brings this action to set the record straight, to vindicate the company’s rights under civil law, to curb McDonald’s anti-competitive conduct, to recover compensatory and punitive damages, to protect the consuming public from false and misleading advertisements, and to finally fix McDonald’s broken soft-serve machines,” the company says in the court filing.
A spokesperson for McDonalds denied the allegdations and said the company will defend itself in court.
“McDonald’s owes it to our customers, crew and franchisees to maintain our rigorous safety standards and work with fully vetted suppliers in that pursuit,” the spokesperson said. “Kytch’s claims are meritless, and we’ll respond to the complaint accordingly.”
Kytch was founded by Jeremy O’Sullivan and Melissa Nelson to resolve issues with McDonald’s ice cream machines, which break repeatedly and became a widespread issue that even the fast-food chain’s Twitter profile joked about.
Kytch claims the ice-cream machine’s makers, a company called Taylor, have exclusive rights to repair the soft-serve machines at McDonalds, which results in a “lucrative scheme” between the two companies. Kytch also claims Taylor allows its own machines to malfunction or remain finicky for profit.
Last year, the Wall Street Journal reported that the Federal Trade Commission was investigating similar issues with the ice-cream machines at McDonald’s.
In 2019, the startup developed the Kytch Solution, essentially a computer device that connects to the soft-serve machines and allows for remote control and monitoring that “minimizes the need for costly repair appointments,” Kytch said in the court filing.
Kytch won an endorsement from the National Restaurant Association but McDonald’s and Taylor, hoping to develop a similar device of their own modeled off the Kytch Solution, ran false advertisements claiming the Kytch Solution was unsafe, the company claims in the court filing.
The campaign to discredit Kytch was successful in “destroying” the small business, according to the company.
“The damage to Kytch was instant and monumental,” the company said in the filing. “McDonald’s unlawful conduct had dire financial consequences for Kytch, its founders, investors, and its employees.”
Updated 8:51 p.m.