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New emails released in the McDonald’s ice cream machine lawsuit (wired.com)
250 points by notacoward 13 days ago | hide | past | favorite | 138 comments






I don't see any basis why the complaint is interesting - there's assertion that the ice cream machine manufacturer is copying features of the competitor's device, which is a perfectly reasonable thing to do and, in the absence of patent protection (the word "patent" is not mentioned in the article) absolutely permissible; and there's some assertion of "stealing trade secrets" without asserting any actual compromise of a secret by someone entrusted to keep it, but rather an act which looks like reverse engineering a product (which, again, does not require a permission for physical devices not covered by patents or copyright; trade secret law explicitly states that reverse engineering is a lawful way of acquiring trade secrets) and its documentation, which should be considered a very reasonable thing to do for anyone with a hacker mentality. Trade secret applies only to things that you actually keep secret, all the things you sell or give to your customers aren't trade secrets any more.

"There was a concerted effort to not only obtain and copy our device and follow everything we were doing, but then also, when it hit a critical mass, to actually put us out of business," - that's pretty much textbook definition of market competition, not an indication of anything shady.

"Kytch argued in its initial legal complaint that the company didn't truly copy Kytch's device to try to fix McDonald's ice cream machines, but simply to have a competing product it could tout to McDonald's—and McDonald's franchisees—in order to prevent Kytch from fixing those machines." - again, it's perfectly legitimate to try and make a competing product to tout to McDonalds; unless they're violating a specific patent, it's their right to do so; more competition is a good thing to have.


I haven't been following this super closely but I think you're missing an entire angle of this. The copying part is just a symptom, the real issue was that

1. McDonald's forced all franchise owners to use this machine that would break often, and could only be fixed by this other company McDonalds had close ties to.

2. McDonald's didn't allow franchise owners to allow this other tool that allowed franchise owners to keep their machines up and working

3. (What you mention) now the other company just copied this tool for themselves.

1 and 2 is much more problematic, given the close ties between McDonalds and Taylor Company.


Well, 1. and 2. is about contracts between McDonalds and their franchisees, so if a franchise owner feels unfairly harmed by this restriction, then they can sue McDonalds, it's not something about which Kytch should be able to sue Taylor. And, once again, it's perfectly reasonable and very common for franchise agreements to mandate certain suppliers for some products, goods and services, and the close ties don't make it problematic, it's common for some of the suppliers to be wholly owned a subsidiary of the mother company, and it's common for these suppliers to be not very good but as the shared money-maker for the franchise scheme.

There's no fundamental difference between McDonalds franchise contract saying that franchises must use only this ice cream machine and the same contract saying that franchises must make BigMacs only according to this exact recipe. If the franchise operator thinks that the BigMac recipe sucks, they don't get to change it or demand a fix - if McDonalds thinks that's good enough, they can take it or leave it and stop being a McDonalds franchise. The same is regarding McDonalds ice cream process; it may legitimately suck, but it's part of the package deal. If McDonalds wants to buy from Taylor and not from Kytch, that's their choice, effectively McDonalds (and not the franchise operator) is the customer here; and if they are a lousy customer, there are other customers to fight for - IIRC McDonalds bought 25% of Taylor machines, so there are many others out there.

And #3 is not a bad or even a neutral thing - reverse engineering other products is great, please everyone do more of it! Good features should be copied and adopted across the whole market (both in hardware and in software), that's the exact kind of competition that benefits the community; and that's a manifestation of the hacker spirit that should be celebrated, not get shamed about. While legal restrictions such as the excessive patent regime and the excessive length of copyright often prevents people from doing that, in cases where it is not prohibited, this is a good thing to do.


You're missing an important aspect of the lawsuit. Kytch is alleging loss of business due to defamation by McDonald's, be because McDs falsely claimed that the Kytch could harm the Taylor machines.

If Taylor hasn't certified the Kytch product to safely integrate with the Taylor product, it seems reasonable for Taylor to say it could cause problems. If they said it will cause problems, that seems a bit different.

It could cause problems to your already broken machine!

Considering they are connected to each other electrically, yes!

No, because it's already broken. That's the point that was being made and you are not addressing that here.

Your car's broken: oil pan needs to be replaced and it's in the shop. $2,000 repair.

While it's in the shop, it falls off the lift: $10,000 damage. Now your formerly "broken" car is even more broken? Is the situation still the same?


What sort of argumentation is this? You know full well that something broken in one regard can be further broken in an unrelated regard.

Hmm. If Kytch will never certify 3rd-party products, isn't it still irresponsible to say it could. The moon could be made of cheese if nobody checks.

Irresponsible? I don't know, maybe? What responsibility does Taylor have to Kytch in the first place? Certainly no obligation to say "Their product is safe to use on our machine."

Defamatory? I don't think so, but I guess the courts will decide.


The copying invalidates the claim that the original device was harmful.

It was safe enough that they decided to literally copy it. Unless they can provide contemporaneous evidence that they felt there was a specific aspect of it that was harmful.

At this point it seems like the only reason they said it was harmful was to avoid franchisees from using it, which would quite clearly qualify as defamation.


> It was safe enough that they decided to literally copy it.

They "copied" parts of it. We don't know they "copied" it all. I don't know how the device could be harmful, but presumably the harmful parts were not "copied".

Note that i used quotes around copied. I wouldn't use that term because it implies something that is protected by copyright and that doesn't seem to be the case.


> Well, 1. and 2. is about contracts between McDonalds and their franchisees, so if a franchise owner feels unfairly harmed by this restriction, then they can sue McDonalds, it's not something about which Kytch should be able to sue Taylor.

A contract between two parties can unfairly harm a 3rd party. Especially if one of the two parties is abusing its market power to push anticompetitive clauses. For example requiring "authorized" car mechanics to buy only overpriced Ford-branded repair tools. This way Ford uses its car marketshare to push into the repair tool market. Tool manufacturers that don't have a car manufacturer backing them simply can't compete.

Of course Ford would probably argue that the markets are related, and that it has a legitimate interest in ensuring its mechanics use adequate tools. That only its own tools qualify as good enough is just a big coincidence..


1. - As an ex employee - it’s a little bit more complicated than that. The machines have strict daily/weekly protocols for cleaning/maintenance and when they’re not met they “break” and need to have a tech reset them. It’s obviously due to the manufacturer not wanting to be liable for anything from a food poisoning standpoint. I don’t think they have a lower MTBF for “real” failures than competitors.

They do have a lower MTBF than other Taylor machines sold to other fast food chains. McDonalds requires franchises to purchase specific models that are more prone to failure and harder to repair.

Why would they do that?

Maybe because McDonald's and/or Taylor think the average McDonald's employee is less reliable than the industry average restaurant worker. Or maybe McDonald's simply tolerates less liability than the rest and requested the machines be configured in this way. As far as I'm aware, McDonald's hasn't sued Taylor over this, maybe because it was their idea in the first place?

It is the franchisee who pays for repairs. Of course it was McD's idea. They make a cut.

I doubt they make more from repairs than by selling ice cream made by functional machines.

True, but ice cream is expensive. Soda and fries are cheap. Burgers and ice cream get people into the store where they buy soda and fries. And I’m sure many a person has gone to McDonalds wanting ice cream and upon learning the machine is down, decided to get a drink and fries instead.

I haven't seen any actual evidence that Taylor is giving kickbacks to McDonald's. I've only a lot of insinuation and accusation of such a kickback, because the accusers don't seem to consider other possibilities. One possible reason other than a kickback: McDonald's wants the machines to error on the side of food safety and don't trust their own employees to not fuck it up.

McDonalds and Taylor have a very close relationship.

And why would the manufacturer build that? Is it really the razorblade business model?

> I don't see any basis why the complaint is interesting

Hard disagree. I'm finding this saga fascinating. You don't think Taylor lying to Wired journalists, and being called out for doing so, is interesting?


I have always found our putting up with Corporate PR lies so crazy. This wasn’t a stretch of the truth, or a belief what they were saying was true and missed a single internal email. Taylor’s statement was knowingly completely untrue.

Say what you want about the China social credit system but if there was a way the associated press could blackball Taylor/the spokesperson for Taylor from ever publishing another statement I think the world would be a better place.


No reason to go so far. Just prepend "documented liar" to every instance of "Taylor spokesperson".

I think OP is being specific. The civil complaint is not particularly interesting, I agree, but the overall saga is.

It's an interesting case to be sure.

McDonald's Franchisees are independent business owners. McDonald's is refusing to fix a problem, and has pushed a potential fix for the problem "out of business".

Not sure what the chances of this succeeding, but now we have Taylor and McDonald's hands dirty in trying to "buy this device and copy it's features and user interface". And lying about it when they said they had "no interest in the device". It's not pretty.


Lying is shitty (but usually legal), however "buy this device and copy it's features and user interface" is not "dirty hands" but a completely legitimate course of action. They would have hands dirty if they had bribed some Kytch engineers for schematics or hired someone to steal a prototype, but there's nothing wrong about buying a product and reverse engineering it. In fact, I would consider placing restrictions on that - e.g. software EULAs that prohibit reverse engineering - as immoral.

Completely agree. I don't understand why copying is so vilified. It should be the norm. It's also weird how people can somehow sign away their rights via contracts. Courts shouldn't allow them to do that. A clause saying people can't reverse engineer should simply be considered invalid and not enforced...

Part of the vilification of copying has to do with some existing injustices baked into modern capitalism. We're told that if you're a little guy, you can beat the Goliaths through innovation and outmaneuvering. But if BigCo can just copy SmallCo's innovations, that becomes untrue. Do patents help here? Yes, but it's quite expensive, in practice, to amass and defend them. In many cases, smaller players don't have the resources to patent every innovation, even if those innovations are objectively patentable. So I think, in general, although people recognize that copying of unpatented innovations is legal, there's a feeling that a BigCo, which already has many advantages because of its size, should be competing based on its own innovations, not by copying from smaller players.

I wouldn't call it competition since McDonald's specifically forbade franchisees from using Kytch's device.

Yeah, and for some reason McD thinks you need a technician to fix something hard like "container overfilled" or something. And apparently even Taylor thinks this is stupid. Sounds like an "ok boomer" moment. (or maybe something involving financial incentives, can't exclude that)

"Who mitms their own machine?!" Well, did Taylor fire the engineers that built this? Or they just want to keep the same limited hw and work the diagnostics part around it?


If McDonald's want's to error on the side of caution, isn't that their prerogative?

Problem is McDonald's isn't paying for all the unnecessary service calls, it is the restaurant owner that have to buy the McDonald's mandated machines that end up paying. So you have McDonald's which has no incentive to change things, Taylor which profits from the situation since their devices are mandated and the restaurant owners who have to foot the bill for hundreds of pointless service calls.

But what does McDonald's gain from the PR backlash? Is there some perpetual contract between McDonald's and Taylor, and they just screwed up by buying a worse model? You'd think that the corporate overlords would perfer the machine to be working so they make money from the sales...

Nothing. But the alternative isn't great either.

Its more costly and vastly more negative from a PR perspective, for McDonalds to force franchisees to change ice cream machinery vendors.

Same thing for Taylor upgrading their own machines - with the added cost that they don't have any goodwill to start.

There's an added incentive here that McD wants the legal shield up at all times - they are incentivized to keep machine error rate very low, to the cost of $$ in sales lost.

Consumers greatly benefit from it - we get worse availability of ice cream when we walk in, and we are paying slightly more in menu prices, but the risk of getting poisoned from eating ice cream at McD ends up extremely low.


> You'd think that the corporate overlords would prefer the machine to be working so they make money from the sales...

And that's where the intrigue and accusations of foul play are coming in. It seems like McD's has mandated this model of Machine and Taylor agreed to make it worse (they supply better machines without these issues to other fast food chains). Taylor profits from the service calls and I'd bet some McD's exec are getting kickbacks to keep it that way (by mandating a worse machine that makes franchise owners less money). The Kytch device came along and upset that status quo.


Sure, it's their prerrogative to continue squeezing their franchisees as much as they can and make their work as hard as they can.

If I wanted to lose money there are less painful ways than being a McD franchisee.

McD's actual business is on real estate/franchise fees. The food business is secondary and is a justification for the first. Guess which part is risky and complicated?


Abusive monopolistic behavior if left unchecked can lead to great evil. This was recognized a long time ago and led to anti monopoly legislation and enforcement. Just think what would have happened to the internet if AT&T‘s stranglehold over the connection of equipment to telephone lines had continued.

Strangling is not a prerogative of the strongest.


"There was a concerted effort to not only obtain and copy our device and follow everything we were doing, but then also, when it hit a critical mass, to actually put us out of business,"

That is NOT market competition...at all and it is 100% shady. Competition is "I make something, you make something better". It's not "You make something. I make something to make it better. YOU try to put me out of business by LEGAL means." That is not competition.


Relevant link for those who want more context on the constantly broken McDonald icecream machine situation: https://www.youtube.com/watch?v=SrDEtSlqJC4

I don't think the WIRED article isn't really doing justice to what Kytch is trying to show. The important argument is whether or not McDonald and Taylor conspired to prevent Kytch from selling / franchisees from purchasing this equipment, essentially a 'right to repair' argument.

If Kytch wins, there could be ramifications for the tractor debate in the agricultural world as well.


McDonalds should have Apple design uncrackable DRM that locks franchise owners into their walled garden, and call them iScream machines.

The wired article was extremely short not sure if I’m just not getting the full article? It seems from my perspective that Taylor and McDonald’s conspired to take money from the franchise owners. What a shame. Because all it does is incentives owners to cut corners like say serve cold fries so they don’t lose money. McDonald’s used to be great but somewhere lost the way. They used to be the affordable place anyone could afford a couple burgers and fries for their family and it used to be quite enjoyable.

What I'm enjoying is their randomly changing offers post-lockdowns in my country, and how they don't communicate them at all.

Their "gourmet" burgers are now only available from 10:30am to 10:30pm, even in 24 hour joints.

Their "all day breakfast" they spent a lot of money advertising now ends at midday. This was notably not advertised. When I rocked up at 12:15pm looking for my regular Sunday McMuffin, and was informed of the new policy, I kinda understood that famous scene in Falling Down[1].

They have vanilla shakes! Sometimes, maybe. Plenty of the other shakes, but vanilla is hit and miss.

[1]: https://www.youtube.com/watch?v=hlzm7-gvTRg


Must have watched that move close to 30 times. I wish my kids will someday watch it, they will have a Keyser Soze moment when they realize how much of our daily coversation is made up of quotes from Falling Down.

I suppose that's better than the Rocky Horror Picture Show quotes mine have been hearing... and I hope that they never find out.

The Monty Python and Pulp Fiction quotes, though... Yes I hope that they figure those out some day!


That is an awesome movie, if a bit depressing. "I'm the bad guy?"

A previous Wired story has the full context; the one posted today is more of an update. https://www.wired.com/story/they-hacked-mcdonalds-ice-cream-... (or https://archive.is/newest/https://www.wired.com/story/they-h... )

> McDonald’s used to be great

When was this?


It was great when I was a kid (almost 50 years ago).

Other poster lists some tangible changes made to their menu but for me the difference is simply that I was a kid with a working-class single parent and my tastes were simpler. Hamburger + small fries + small Coke was an affordable "treat" for us.

Perhaps marketing is as responsible for killing McDonald's image: when small disappeared and it was "regular" size. Super-size dinks.... "Would you like fries with that?" Or when giant burgers (Bic Mac, Quarter-pounder, Double Quarter-pounder, Double cheeseburger) started dominating the menu and the small hamburger took a back seat.


I’m from the 80’s. First they used to actually use beef tallow up until the 90s when they switched to vegetable oil. Major decline in taste and texture. Fries used to stay crispy longer and the flavour was much more rich. Also you used to be able to get a cheese burger for like $0.60. It used to be affordable but at some point the prices skyrocketed and they got their new menu items which mostly sucked. They used to have pizza and I’ve seen a lot of people wish for that back. It seems to me like they wanted to portray themselves as a high end burger joint and start charging as much like you would see at a restaurant. What made them famous was cheap food. They should have kept that as a focus imo.

I've never seen them provide value for money here in Europe compared to what was already available. What boosted them - and killed a lot of the local competition - was that tourists seemed to prefer them. We had plenty of fast food here that was quite ok before then.

Here in Germany, we still have a lot of other fast food, like the local Döner shops, or local "Asian" shops selling mostly Chinese, Thai and/or Vietnamese dishes (usually their menus are a mix), or pizza-to-go places or the good old "Currywurstbude" (selling Currywurst of course, but usually things like Schnitzel and even burgers as well). Even my own minor city (about 250k people) also has a lot of other fast food (as in takeout and/or delivery not necessarily junk food) places on top of the usual assortment of Döner/Asian/Pizza/Currywurst. "Downtown" has a Kurdish place, a Lebanese place, a Mongolian BBQ, a Croatian place, a bunch of Indian and Pakistani places, two or three Sushi places, and I am sure a lot of others that I don't really know about. And that's not even counting the places operating as "real" restaurants.

I know a few people who go to McD because "you know what you'll get", but I personally never felt the need, the competition is better in taste more often than not, and McD are not even cheaper than most of the alternatives, sometimes even more expensive. The last time I was at McD was when I was stranded at some small train station some years ago and didn't have the time to look around and just settled with the McD located right in the station building (I would have gone with the Burger King in the same building, but it was closed for renovations). That's when I found out that the quality of their fries took a slump, at least in my humble opinion.

Personally, I'd rather have a Dürüm from a Döner shop, or Pho Tron from one of the Asia places, or maybe some Masala from an Indian place.


> you know what you'll get

I always get a stomach ache, and possibly the runs. Something in those burgers just doesn't agree with me..


> I know a few people who go to McD because "you know what you'll get"

Funny that the last times I did that, I didn't get what I expect. Broken machines (not only ice-cream), missing products, and it seems it was harder on the stomach as well, etc.

I just gave up on it if it doesn't even do that anymore.

There are better choices, even around BK, AW, Quick in Europe, etc


McDonalds in the US is generally cheaper than the same in the rest of the world. The company decided they don't like being the value option and so raised prices trying to seem premium.

I don't eat there at home, I'm not interested in trying them in other countries.


I still giggle at how McD tried to market itself as the "healthy" option, especially targeting "girls and women", at least here in Germany, with Heidi Klum and some of her Germany's Next Topmodels as the advertisement figures. They even changed their logo from red + gold to green + gold. That was a few years back.

Right... I am convinced now :P


  > tourists seemed to prefer them
Interestingly, in studies tourists actually do not prefer the food from McDonalds over local cuisine in almost every market studied. What they did prefer was the consistency: knowing what they are going to get.

I prefer McDonalds when abroad mostly because of their ordering machines. It's a big advantage if you travel to a non-English speaking country. I was able to order food without friction in Estonia, Finland, Italy, without speaking any of their languages.

People there will be happy to try to speak English to you if you let them. I don't speak Italian, Finnish, or Estonian for that matter, but I've been there and I have never had a problem communicating with people in the hospitality industry.

Its home away from home.

McDonalds is only "home" for Americans. As the parent comment says, it's "consistent", but it's absolutely not "home" for me or anyone else I know from Europe. And for anyone who has tried McDonalds on a few different continents, it's not even that "consistent" in what you can expect, I think people are more interested in the consistency of safety, i.e. you have a lower risk of being food poisoned than you may have from some of the other establishments nearby.

FEBO!!!

https://en.wikipedia.org/wiki/FEBO

Eating from the wall is like late night window shopping in Amsterdam's culinary red light district.

https://uncloggedblog.com/2013/12/10/five-ways-to-see-amster...

>Window-shopping for fast food at FEBO.

>If you must, eat from the wall at FEBO, an inexplicably popular Dutch tradition that satisfies appetites 24/7 with automated fast food displayed in tiny windows. No telling how long those mayo-slathered frikandel and burgers have been sitting there under heat lamps, but if you’re starving in the wee hours, they may be your only snack option.


Some history: FeBo stands for 'Ferdinand Bol', a street in the 'Pijp' district of Amsterdam, where it originated. When I was a small child (1971, 6 yo) we moved into that neighborhood and I remember them from then. My mom expressly forbidding us kids from eating whatever they offered because it was deemed to be just one small notch above garbage.

And I'm not sure that that wasn't on the money with respect to what goes into their frikandellen and kroketten.

But their fries are pretty good.

Too bad we lost Broodje van Kootje to the chains.


It's not just the food, but the people you meet later in life at 3am hanging outside of FEBO that your mother was trying to protect you from, Jacques.

That's got to be it. But I got to know you anyway... ;)

Hey I wasn't there to actually eat! I was just stopping by to check and make sure you weren't there. But there you were! Shame on you, hanging out and window shopping at the red light district of fast foods.

Oh wow! Thanks for that gem. I have managed to never eat from FEBO but the next time somebody suggests it, I can add a little nerdy know-it-all to my snub :-P

Prices never skyrocketed, you just got older and aren’t considering inflation. 60 cents in 1985 is about 1.50 today, but a cheeseburger only costs a dollar now. In many cases fast food prices in general got cheaper over time due to efficiencies and cheaper ingredients.

First off, Taylor probably is happy with having machines that need service and who knows why McDonald's wants broken machines.

I see nothing wrong with Taylor wanting to improve their own remote monitoring UX. That's just how competition works. Kytch make a good app, and what is Taylor supposed to do, not improve theirs? That part of Kytch's argument is bull. Kytch can MITM and reverse engineer Taylor's machines, but then they don't like it when Taylor does it back to them? Seems like a pretty weak argument. Both companies just need to focus on engineering a better product.


The evidence up to this point strongly suggests Taylor and McDonald’s are interested in milking franchisees (who must source equipment from Taylor per their agreement with McDonald’s corporate), while Kytch actively demonstrated attempting to deliver a better engineered product to franchisees. This is important, as it demonstrates racketeering and anti competitive behavior on the part of Taylor and McDonald’s, and it’s possible the FTC gets involved further besides making an inquiry.

One might expect franchisees have the right to repair their purchased equipment, even if forced to purchase specific food sevice equipment as part of their franchise agreement. One would not expect their equipment provider and franchisor to collude against them.


One part of this I don't understand is why would McDonald's benefit from their franchises constantly needing their ice cream machines serviced.

“Kytch points to documents from the time of Taylor's acquisition by Middleby in 2018 that show the company receives close to 25 of its revenue—from all its customers, not just McDonald's—via repair contracts with Taylor distributors, which Kytch argues provides an incentive to maintain the machines' fragility.“

The missing piece is the kickback to McDonald’s, or a similar financial incentive from Taylor to maintain the status quo. I imagine that’d be a component of discovery or information requested by a federal regulator.


Well is that repair contract a retainer? i.e., "I pay you $10,000/year and every time my machine breaks you send out a tech within 4 hours to fix it at no extra cost? or is the actual cost of repairs the customer incurs?

If it's the first (and I think it is), then Taylor has every incentive to make the machines as reliable as possible. Service calls are expensive and most companies don't make a lot of money doing them. OTOH, a service contract (e.g., maintenance contract in software) is often lucrative because the customer is buying peace of mind. Years can go by in which the contract isn't needed and the seller (Taylor) pockets the cash, but the buyer keeps paying for it because it's cheap insurance.


Mcdonalds doesn't make money selling hamburgers.

It makes money leasing real estate, and equipment to franchisees.


True, but franchises only stay franchises because they are making money. McDonalds in general tries to ensure that franchises make money. They won't let you get a franchise if you they don't think it will be good for all. All includes other franchises in the area - there are only a few cases where there is a McDonalds "near" another, and most are owned by the same person. (The only cases I know of is the original McDonalds has a bigger one across the street because the original is too small for the traffic and would be closed without the historical significant; and a case where one is inside a mall while the other is outside, and thus get different traffic)

Quizno's failure is a good comparable case study for this type of franchisee model - https://www.mashed.com/132827/the-real-reason-why-quiznos-is... When you don't take care of your operators and actively try to screw them over its no wonder that you fail ultimately. But they were bought out by some point by a vulture capital company that probably just turned those screws tighter on the franchisees.

Forcing your franchisees to do business with a company that you have a stake in for something that is considered a solved problem ('keeping things cold') is a fairly textbook anti-competitive move.

I thought this video had some compelling arguments about that: https://www.youtube.com/watch?v=SrDEtSlqJC4

One company is "out of business", so the chances of that either company will follow your advice are none.

The meta-lesson here is that if you plan to go into the business of providing service for an existing tech ecosystem, be prepared in your future for a fight like this.

Companies with small, insular lock-in arrangements don't cede territory willingly. Be it squeezing in on the dominant grocery in a small town, the used car dealers in a county, or the inkjet printer ink cartridge supply chain, find a damn good lawyer who's excited for a fight early in your company's life.


Loose analogy that came to mind here as I read this article:

McDonald's + Taylor: 1990s Wintel alliance

Kytch: 1990s AMD (plucky underdog)


The issue is that Mcdonald's is forcing owners to use this broken machine.

how disgusting. it makes me think that vertical integration is great for countries where the losing party of a lawsuit doesnt face any form of disincentive like paying the legal expenses of the winning party. if you are a company that tries to sell a product like this ice-cream mod then you will be sued but its better to have your own burger joint and fill it with your own inventions. they say that the company was brought to brink of insolvency so i think they probably would have been better being a vertically integrated burger joint.

thats so cool to read about the innovations of their machine. text message alerts, ingredient monitoring in the hopper -- there is so much meat on the bone in so many markets.

i sometimes think of what a better mcdonalds would look like. i imagine it would have equipment like this ice-cream machine that is highly automated and designed for very low maintenance. so one area of arbitrage is reducing staff count and burden with the machinery. then another aspect is getting rid of indoor seating. even before the pandemic i always noticed that the drive-through always seemed to get more traffic than the inside. i think you could just get rid of the inside and do a scaled-up version of the parking-lot delivery that mcdonalds has started doing recently. a medium sized parking lot with a large amount of numbered spaces, and some of the area could be used as a buffer for people to wait for open spaces. and a walk-up window for people who dont have a smart phone or are on foot. and this plays into the largest source of employee friction in my opinion. imagine you work at mcdonalds, you are face to face with random strangers all day. not only is it embarrassing to show your face and be recognized as a person who works at mcdonalds, its stressful dealing with people who are rude and sometimes crazy. i think if you could cut out this aspect of working at mcdonalds that it would be a much more attractive job and you would have much higher employee quality and retention which matter a lot. and one way you might do this is to have a very simple robot deliver the food. the active parking spots could all be on the outer edge of the parking lot and wrapping around the edge could be a track with protrusions between each parking space. it would be covered for rain and snow and surrounded by standard railings so that nobody would wander into the track, no cars could intrude into the track and nobody could interfere with the robot easily since it would be quite heavy. the robot would be a large box about the height of a car door window with a large battery and four large wheels and a camera and a radio. the robot would travel between the building and cars, having multiple food orders put on top of its head and then positioned directly in front of the driver window. it would be simple to drive, impossible to drive into a place it wasnt supposed to be, and driven on shifts, perhaps as a break from the more laborious jobs or by other people remotely. and the nice thing is that if the backup robots all failed or there is some problem, the workers could just use the track to deliver orders by hand like dairy queen. a high tech fast food company with delicious food, an app that works, fast and efficient user experience and a massive improvement in employee satisfaction.


“I sometimes wonder what a better McDonalds would look like.”

I think a better McDonalds looks a lot like In and Out. If the Founder is accurate, McDonalds was a lot like In and Out at one time and operated like it. Chick-fil-a operates similarly.

One thing that is always fascinating to me when I go to either of those two fast food restaurants is the army of workers they have on staff at any time. Usually each doing one very specific job and doing it well. They seem to make up for the extra labor cost by having higher sales per store.


Except the fries. In and Out fries are not very good (ironic since they make a point of making them fresh, which would make one think they should be better).

Otherwise, better quality, prices, and service (and staff pay and treatment).


Have you tried ordering them well done? Its on the "secret menu" - http://hackthemenu.com/in-n-out/secret-menu/well-done-fries/

Good to know. I've now moved away from their territory but I'll try that the next time I do dine there.

Yours does seem to be the more commonly expressed sentiment, but I love In-n-Out's fries, in particular, compared to McD's. McD's are too often "would you like some fries with that salt?", and IMO the In-n-Out ones just taste better. More "meat" to them. Don't seem to turn into cardboard like McD fries.

But it's taste, I suppose.


Not a big fan of either of their fries to be honest. In and Outs are fresh, but not blanched and so soft and mushy. McDonalds, on the other hand, are crispy but lacks flavor and weirdly get cold extremely fast.

"Better" for whom? McDonald's is massively successful with $200 billion market cap and its stock essentially only goes straight up. The franchisees have always had gripes with corporate, always want to save a few pennies, but these arguments are tiny in the grand scheme... most franchisees are also enormously successful and fantastically rich.

Nobody is forcing you to go to McDonald's, stick with INO if it makes you feel good. I love it too (CFA, not so much) but each restaurant has its own niche and each chain has found the style that works for them.


> "Better" for whom? McDonald's is massively successful with $200 billion market cap and its stock essentially only goes straight up.

And this is exactly the source of the problem: the idea that the purpose of McDonald's (or any other company) is to provide Number Go Up thrills to its stockholders, rather than to produce a good product, with the profit being the reward for doing so well.


What problem? McDonald's produces a terrific product that millions of people enjoy every day and that's why the stock does so well.

McDonald's goal isn't to produce the greatest burger in the world. It succeeds at the best combination of pretty tasty food, high menu variety, very convenient, generally quick, and low price. It is not #1 at any single attribute (maybe convenience) but the best overall combination.


No doubt. I am not saying that McDoanlds is unsuccessful, rather that by customer satisfaction surveys In and Out wins. They also have, perhaps, a less scalable model of business and so can never grow to McDonalds size while also maintaining that quality.

Interestingly, Chick-fil-a has learned to scale and maintain quality.


This is just an opinion but CFA does not scale well. In my experience overall quality and service at CFA has dropped considerably, and not just at new stores, but older ones as well. Part of the issue is that CFA does not allow owners to own multiple stores, so every new store has a rookie on top. Well-trained, but not experienced.

Every INO is company-owned, overall I think it manages to keep quality pretty high at all it's stores. Of course part of that is due to the extremely limited menu, and also that INO has never been known for fast service. INO basically tells customers up front, we aren't convenient and we aren't fast and we don't sell anything except burgers... that's 3 areas of potential customer dissatisfaction that they take off the table. All that is left is price, which is good not great, and taste/quality, which, to its credit, INO is pretty fanatical about. Edit: and cleanliness/service, also strong points for INO


and i think its a much more dignified job to work at in n out than mcdonalds. their employees are always fresh and eager. it kind of reminds me of costco employees who always seem to be well put together.

Amusingly enough the ice cream problems are caused by a machine that’s automated and designed to run without people having to do work on it, but this causes it to be offline.

> "i sometimes think of what a better mcdonalds would look like."

Gone.


Replaced by a Spud-U-Like! (Oh yes, I do, I do!)

https://en.wikipedia.org/wiki/Spudulike

https://spudulikebyjamesmartin.com/

Check out that "Bad Boy Hot Dog".


The reason why McD tastes the same everywhere in the world is because of strict protocols like this. Ever wondered why Domino’s tastes very different depending on the country? I prefer predictability in quality and that is one thing that McD gets right

Does that mean dominos tastes good somewhere?

I've heard people say good things about dominos in Switzerland in France but I have zero interest in trying it to compare with my experience in the USA.

Some of the premium pizzas are pretty good in Spain. I like the one with goat cheese and caramelised onions and the one with bourbon sauce.

UK Dominos is damn good and very consistent between stores too.

That's not even remotely true. McDonald's has completely different menu items in some countries, and the common ones frequently have ingredients of very different qualities.

Not to put too fine a point on it, but the quality in the US is, shall we say, not at the top of the list.


Can confirm, I've tried Domino's in several countries and it tastes wildly different. The ones in Mexico are horrible.

McD tastes the same because all ingredients come from the same place.

Ever wondered why McDonald’s tastes like cardboard everywhere in the world? That’s why.


An independent agency has verified McDonald's claim that burger meat sold in Spain comes entirely from Spanish cows.

https://www.origenonline.es/index.php/2017/01/05/mcdonalds-a...


> McD tastes the same because all ingredients come from the same place.

Do you know how expensive McDonald's would be if this were true?


I get your point, but do you realize your clothes are made in china? Sometimes with cotton from Brazil, styled in America on even another country?

Transporting clothes over long distances is a lot cheaper than transporting perishables.

In my naivety I build a startup that fixed a problem for a fortune 500 company thinking they would be delighted. They weren't. These big companies are staffed by individuals who are focused on their career and will do absolutely anything to extinguish your company/idea and pretend it was their idea and champion the company's initiative. It's disgusting but it's reality and if you are a founder be ready for it.

They went through the numbers as realized it would be cheaper to build an equivalent product than buy your startup. This is always a risk founders and investors are aware of. There's nothing disgusting about it. I wouldn't even go as far as saying it was people "focused on their career." They were really just doing their jobs.

> They went through the numbers as realized it would be cheaper to build an equivalent product than buy your startup.

Except that they're always wrong about that ...

The real problem is that the managerial authority to cut the check of the correct size is 4 political levels higher than the manager whose ass is getting kicked by your startup.

Once your startup is kicking the CEO's ass, then you can expect a buyout.


Positive global gradient is insufficient; positive local gradient is necessary, at all links of the value chain.

Huh. That stuck around in my brain for a bit. Never really seen it put so succinctly before!

As a non-native English speaker, I dont get this. Can someone explain it for me?

(Non-native English speaker).

In an optimization problem, there can be global optimum and local optimums. He says that global optimum is not enough for supply chain, because lower layers money will be sucked by upper layers and chain will break, because owner of sucked business will park his money somewhere else, so each level must operate at a local optimum.


Even internally, if your big idea boils down to "I'm eliminating your job", people will be less than enthusiastic

That's the majority of the people in the world. Not just Fortune 500 execs.

In spite of every thing, I do not believe its a majority. As with many things, it is the loud minority. We would not have progress, if your statement were true.

Progress happens when the incumbent interest is disrupted by something they couldn't see coming, or couldn't stop because of their own inertia.

When I think about this, I think about how Apple stole the music industry for awhile.

The RIAA was tossing lawsuits left and right to try to stem the tide of piracy. Companies tried to build up digital marketplaces, but the studios and labels owned the rights and didn't want to play ball. And most of the companies shot themselves in the foot by also not playing ball; after all, the RIAA was wrong, they were dinosaurs, they didn't understand tech and their demands were anachronistic nonsense.

Along came Apple, and they basically sat down with the RIAA and did nothing but play ball. Exclusive deals? Got it. Our best cryptography folks working on a cipher algorithm to keep your music "secure" on a device someone else owns? Yes, we'll tell you we can do that and invest time and money into making it plausibly true. A revenue-sharing agreement so lopsided it would make a used car salesman blush? Here's our vein; open us up and leave us with as much as you think we need.

And that lasted for a couple years. Then Apple unilaterally announced they were dropping the encryption. It was, after all, a pain in the ass for end-users.

And the RIAA screamed.

And Apple just stared them down and said "You killed all the alternatives. Where else but iTunes will you go? You can't even go back to CDs; customers liked digital so much they stopped buying them and the machines that play them."

And for a brief period, Apple became de-facto owners of music distribution overnight by simply giving the previous owners everything they thought they wanted.


The difference is that a VP at an F500 has significantly more resources at their command.

Firefly: “Half the human race is middlemen, and they don’t take kindly to being eliminated.”

This is a pattern of behavior as old as time in politics and commerce and academics and relationships.

This type of person isn’t the majority, at least in my experience, but their minority is large enough that you reliably encounter them when you start working with large organizations.


Of course, we are subservient to and dependent on an economic system which both incentivizes and enforces this type of behavior.

In state bureaucracies and very unionized workplaces people will be afraid to fix something, even if they can and they should to avoid extreme waste, because they are afraid that it would take the credit away from someone else.

Seems like you're making a swipe at capitalism, but this behavior is also rampant in socialist economies (e.g. was very widespread in the USSR), so I don't think the economic system is to blame.

Those two facts aren't mutually exclusive

Which two facts?

It's a problem of bureaucracy

Particularly career ladders. Without career ladders, people wouldn't feel like they're losing something if they didn't come up with the idea.

My personal feeling is they are overused, but I'm not entirely ready to say they shouldn't exist entirely.

The one thing socialism gives you that capitalism doesn't in this case is that you're guaranteed a job if you are made redundant whereas in a capitalist system, you're out of a job unless you made your own arrangements.


Go plaintiffs, go plaintiffs



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