Start-up Sues McDonald's For $900 Mln Over Ice Cream Machine Business

07-Mar-2022 - USA

A start-up called Kytch, which had created a product that can fix McDonald's infamously broken ice cream machines is suing the fast-food chain for $900 million. Kytch had sold the device to 500 of the McDonald's restaurants across the US.

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According to reports, McDonald allegedly ordered these devices to be removed from its shops in November 2020. As per emails referenced in the lawsuit, McDonald's removed the devices from its machines as they "violated their warranties, intercepted confidential information, and risked causing "serious human injury".

Since the removal of the devices from McDonald's, Kytch has seen a decline in its sales. In response, the small company filed a lawsuit on March 1 accusing McDonald's of false advertisement and wrongfully interfering with its contracts with customers. The lawsuit also claimed that McDonald's has defamed the Kytch name.

Co-founder Melissa Nelson told reporters, "They've tarnished our name. They scared off our customers and ruined our business. They were anti-competitive. They lied about a product that they said would be released. McDonald's had every reason to know that Kytch was safe and didn't have any issues. It was not dangerous, like they claimed.

And so, we're suing them."

Kytch's phone-sized device worked by intercepting the ice cream machines' internal communications and reporting back any issues to a web or smartphone device, which is said to have saved "thousands of dollars a month".

The company also alleged that McDonald's used its device to reverse engineer and developer a new ice cream machine that uses its technology.

In response to the lawsuit McDonald's said, "Nothing is more important to us than food quality and safety, which is why all equipment in McDonald's restaurants is thoroughly vetted before it's approved for use."

https://www.yumda.com/en/news/1175079/start-up-sues-mcdonald-s-for-900-mln-over-ice-cream-machine-business.html