There's New Legal Drama Around McDonald’s Soft Serve Machines

On the alternative, from the Wired article:

(sorry if this is a duplicate link)


Try having several cans of Coke syrup getting holes punched in them as they roll around on the deck (along with the contents of the salad bar, the coffee pot, the soft-serve machine, and several stowage lockers, plus everything off all the tables) because the boat is surfaced in somewhat heavy seas…

This is almost certainly the case. And the reason McDs looked the other way on Kytch for a time was because Taylor had no answer. Then Taylor closed the gap and McDonald’s chose to comply with the agreement once it wasn’t a burden to do so. This is however NOT some kickback scheme. This is standard white label/OEM language.

This I don’t buy. If Taylor’s machines were so problematic, McDs would have no trouble whatsoever terminating the contract for cause. And I have no doubt that McDs lawyers would kick the Taylor lawyers around like a hackysack if they challenged it. McDs sales volumes are so large that even if a settlement/buyout were the path forward they’d pay it in a heartbeat. A single fiscal quarter’s ice cream sales is going to be more revenue for McDs than Taylor’s entire business, paying them off would be peanuts in the world that McDs plays in. The real problem is that McDs would need to start over again with a new manufacturing partner and they’d have to replace all the machines…which is slow and expensive.

McDonalds has no reason to fight this, the burden is not on them and I seriously doubt it affects their franchising in any meaningful way.

Franchisee’s kick up a percentage of their sales. If sales are down, McDonald’s Corporate makes less. The first cite I’m seeing says they pay 4% of their gross sales (so, before expenses, like fixing their ice cream machine) as a franchise fee PLUS somewhere in the neighborhood of 10% of their sales as rent.

If Omniscient’s suggestion that “A single fiscal quarter’s ice cream sales is going to be more revenue for McDs than Taylor’s entire business,” were even close to being true, I can’t imagine McD’s being okay with losing out on their percentage of those sales. Plus they’re quickly becoming a joke, at least WRT the broken ice cream machines.

If someone assumes the ice cream machine is broken, they may go elsewhere. If a mom, dad and their two kids go to Dairy Queen instead of McDonalds for dinner, McDonalds is losing out on the entire meal for 4 people, not just two ice cream cones.

On a good handful of occasions, Oberweis (dairy & ice cream shops) got my business, despite my displeasure with the owner’s politics, when I wanted a quick drive-through McDonald’s ice cream dessert but the dessert machine was out-of-order and Oberweis was next door. :thinking: It never got to the point that I went straight to Oberweis, but I don’t recall ever successfully getting an ice cream dessert (may have had a pie instead) at McD’s either.

More ice cream excitement!

I’ve been told the ice cream wasn’t available. I suspected the employee didn’t feel like making a McFlurry. It’s extra work and they may be behind on the burger orders. It is frustrating when I made a trip for nothing.

I don’t understand a FTC investigation. How do they have any jurisdiction in how McDonald’s makes ice cream? Obviously McDonald’s wants to make money by including ice cream on their menu. It’s in their own interest to fix the problem. Why would the FTC be involved?

McDonald’s doesn’t have to sell ice cream. They could remove it from their menu. It’s entirely a internal business decision.

I think they should temporarily remove ice cream from the menu. Get new machines and then market their new and improved ice cream.

If you don’t understand this, you should watch the video linked in post #6 of this thread.

This is an example of over thinking technology.

Soft serve ice cream machines have been around since the 1960’s. Every burger place had one. They were reliable. It was labor intensive to clean them, but restaurants did it for sixty years.

Now they’ve over complicated the technology and the machines break constantly.

They wouldn’t have any jurisdiction regarding how McDonald’s makes ice cream. But they do have jurisdiction over repair restrictions that violate laws the FTC enforces. The issue for the FTC isn’t whether the machines break constantly or whether the four hour cleaning cycle causes the ice cream to be unavailable during operating hours - it’s whether McDonald’s franchisees have to hire an “authorized” repair shop to fix the machine. It’s as if you bought a Honda and had to have all the work done at a Honda dealership rather than using an independent mechanic or doing it yourself because Honda has enough control over parts and tools to make the needed parts and tools unavailable to anyone other than an authorized repair shop.

The video is very interesting. It is crazy that McDonald’s allows a badly designed machine to be used in their restaurants.

I assume Wendy’s and other companies made it clear they wouldn’t put up with this crap? Give us a better machine or we’ll use another company? That should be the normal business response to bad equipment.

This is a real catch 22. McDonald’s wants a equal customer experience at every restaurant. A Big Mac in Idaho should be identical to one in New York or Florida. You achieve that by requiring the franchise to use the same equipment and supplies. But, they shouldn’t be requiring Franchises to buy and use unreliable equipment.

McDonald’s is failing to protect their franchises. It’s nuts they’ve allowed this to escalate to a FTC investigation.

If the big manufacturers all do it, sometimes you don’t have much of a choice. Look at the Right to Repair cases against John Deere (or Case?). Not that long ago, if your tractor broke down, you either got out and fixed it yourself or you called someone from the local tractor place to come out and fix it (or hauled it to them). Now you have to wait for a John Deere tech to come out. In some cases that can mean multiple days, which can cost farmers a lot of money when they have crops that need to be harvested right now.

At my store we use Hobart scales to weigh items and print labels. We replaced one recently and an upgraded model and sent it back. Part of our reason for doing that was because so many of the features were locked and required a tech to come out and change. Simple things like changing how a label is printed or what font is used requires a service call to Hobart.

It makes no difference to McDonalds. The franchise owner is the one paying to have the machine fixed and likely had to buy the machine in the first place. I don’t think it would surprise anyone if it turns out the equipment maker gives someone at McDonalds corp a kickback for every machine that gets installed. The only real downside is when the machines become so unreliable that people just go somewhere else instead.

Small nitpick they are not investigating it yet. At the moment they’re just gathering some data (from franchise owners) to decide if they want or need to investigate it.

I watched the video. I found it very interesting, but its conspiratorial angle makes me a bit skeptical.

I don’t disagree, but it’s a good overview of the issues for someone like acceplace57, who said he didn’t understand why the FTC might get involved.

The irony is that it would make a lot more sense if this were happening at Wendy’s. Their form of frozen confection isn’t quite like that found anywhere else (or at least, anywhere major). If you told me that it requires a specialized machine to make a Frosty, and that only one major company makes that machine, I’d nod and say that that makes sense, because a Frosty is a specialized product. But there’s very little difference between different soft serves, and even if McDonald’s special recipe calls for slightly lower temperatures or less stirring or whatever, it should be easy to make the necessary adjustments on any soft-serve machine. There’s no natural reason for a monopoly.

And if you want to drive on the roads, you have to buy a Honda.

Conspiracies do actually exist. Kickbacks and embezzlement are actually things that happen.

The fact that this is such a problem, that it hasn’t been fixed, and that third parties have come up with a fix that they are not allowed to use suggests that there is something going on that is not in the best interest of the franchisees

The FTC certainly thinks that the conspiratorial angle isn’t too far fetched if they are starting to look into it.

Wendy’s frosty machines are made by Taylor as well.

The difference is that they are drained and cleaned manually every night, rather than relying on complex mechanical and electronic controls to operate correctly.

Also, while I was there at least, our general repair tech for the district was able to work on them on the pretty rare occasions that they broke down.

I’ve been a computer analyst for over thirty years. I’ve written a lot of business software.

Taylor’s ridiculously unhelpful interface menu and cryptic error messages pisses me off. I’d get fired for writing a user interface like that.

It is disturbing that manufacturers see technical service as a major revenue source. There’s no incentive to make a reliable product.

True enough. But as a skeptic I tend to have a kneejerk reaction to anyone who claims a conspiracy or whatever is the reason something is happening: I automatically assume it’s false unless proven otherwise beyond a shadow of a doubt. This mindset has served me well over the years.