McDonald's is being sued for $900 million by a startup, which created a device it said was designed to fix the chain's ice-cream machines.

 

In a lawsuit filed on March 1, Kytch accused McDonald's of having sent emails to franchisees saying that Kytch's devices violated the machines' warranties and intercepted their confidential information.

 

McDonald's also said the device could pose a safety threat and cause injuries, the lawsuit said.

 

Kytch, which provides remote controls, maintenance, and other tools for ice-cream machines, described both claims as false and defamatory. Its lawsuit was also critical of Taylor Company, which is the chain's main provider of ice-cream machines.

 

Kytch's cofounders, Melissa Nelson and Jeremy O'Sullivan, are seeking $900 million in damages. In addition to defamation, they've accused McDonald's of false advertising and interference in its contracts with customers, the lawsuit said.

 

In a statement sent to Insider, McDonald's said it owed it to its customers, crew, and franchisees to maintain its "rigorous safety standards and work with fully vetted suppliers in that pursuit." The company added, "Kytch's claims are meritless, and we'll respond to the complaint accordingly."

 

After learning that Kytch's unauthorized device was being used at some McDonald's restaurants, the fast-food chain said it sent a warning to franchisees regarding the possibility of crew or maintenance staff being injured. This was because of the remote-operating system Kytch enables in its soft-serve machines, the company said.

 

McDonald's said the safety certifications mentioned in Kytch's complaint didn't meet the robust requirements the chain had for all equipment in its restaurants. McDonald's also said there were many different scenarios that could result in possible injury, which it said Kytch hadn't addressed.

 

In a statement, Kytch's founders told Insider that McDonald's had "destroyed" its business, and that "nothing can undo that damage."

 

O'Sullivan and Nelson added in the statement, "McDonald's worked closely with its soft-serve machine manufacturer, Taylor Company, to spread false information about our company, to drive us out of the marketplace, and to line their own pockets."

 

McBroken, a website tracking the chain's broken ice-cream machines, said at the time of writing that 12.57% of machines were out of use, with 36.73% not working in New York.

 

Despite the reported widespread issues surrounding ice-cream machines, "McDonald's has failed to meaningfully improve the machines, and the fast-food giant has even granted Taylor exclusive rights to supply kitchen appliances to more than 13,000 retail locations in the United States," the lawsuit alleged.

 

It added: "This arrangement generates millions of dollars of revenue for Taylor and its network of franchised distributors."

 

In September, Insider's Mary Meisenzahl reported that the chain's frequently broken ice-cream machines were under investigation by the Federal Trade Commission. McDonald's countered this claim by saying it had no reason to think it was under investigation.

 

O'Sullivan told Newsweek: "If their mission was to destroy Kytch, they absolutely succeeded. What has blown up in their face is this massive trail of really damning evidence of all the laws they've broken."

 

He added that it took him and Nelson months, "if not a full year," to gather all the evidence and data and "convince very smart attorneys to take this data and litigate it against probably the most fearsome company to sue, which is McDonald's."