The $900M lawsuit claims McDonald's stole Kytch's technology to reverse engineer it and create their own competing product as part of an alleged multimillion-dollar 'repair racket.'
Luke Sharrett / Bloomberg via Getty Images fileA startup called Kytch created a device to fix notoriously finicky ice cream machines at McDonald’s and saw sweet, albeit brief, success. Now the company is shaking up the fast food giant in a new $900 million lawsuit, accusing the restaurant chain of ruining its business.
Kytch co-founders Jeremy O’Sullivan and Melissa Nelson in 2019 launched the product trial of Kytch Solution, a computer device with an online interface that allows customers to remotely run the soft serve machines, the lawsuit said. The lawsuit states that Kytch Solutions was a hit, and in 2020 became"the largest independent software vendor for the shake machine in the McDonald’s system."soft serve machine manufacturer Taylor CompanyTaylor has exclusive rights to supply kitchen appliances to over 13,000 McDonald's locations in the U.S. in what the lawsuit called a"lucrative scheme."
Under pressure from independent restaurant operators to integrate Kytch into the McDonald's system, McDonald's and Taylor worked to create a device called Open Kitchen, which has never launched, the lawsuit said. Kytch said in the lawsuit it lost millions of dollars due to McDonald's actions."By contrast, Taylor has continued to rake in $75 million in annual revenue from its repair racket at McDonald’s," the suit said.
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