Technology Company Files Defamation Lawsuit for $900 million against McDonald’s

People who want to be entrepreneurs are often told to find a problem in the world that they can solve, then build their business (and their marketing efforts) around solving that problem for their customers. That’s exactly what Melissa Nelson and Jeremy O’Sullivan thought they were doing for McDonald’s and its customers before McDonald’s started telling its franchisees that the technology Nelson and O’Sullivan had created could lead to worker injuries.

The problem Nelson and O’Sullivan sought to solve is the prevalence of ice cream machines at McDonald’s constantly breaking down. It’s such a common occurrence that it has inspired memes (and even some conspiracy theories) that pop up all over the internet. You’d think McDonald’s would be eager for a solution to the problem, but Nelson and O’Sullivan were surprised to find that was not the case.

The two would-be problem solvers met as freshmen at Bucknell University in 2005 and started a business together, FroBot, in 2011. FroBot sold frozen desserts from automated soft-serve machines made by the same company that supplies McDonald’s ice cream machines, Taylor Company. The only problem was the machines kept breaking down and the only way to get them up and running again was to call one of the company’s technicians. But according to Nelson, the technicians were more likely to blame a lack of electrical power, if they found any problem at all.

So Nelson and O’Sullivan came up with their own solution. In 2018 they started a second business, which they called Kytch Solutions. It’s an online platform that retrieves information from Taylor’s ice cream machines and displays it on Kytch’s interface. This allows customers to monitor and control soft-serve machines remotely.

Kytch started marketing its new device to McDonald’s and Burger King franchise owners, who had nothing but good things to say about the product. In 2019, more than 400 McDonald’s franchise owners bought Kytch’s technology, but in the fall of 2020, things took a turn for the worse for Nelson and O’Sullivan.

In November of 2020, McDonald’s started sending notices to its franchisees that the Kytch devices were unsafe and could lead to worker injuries. The effect was to put Kytch out of business, although Taylor Company insists that was not their intention. Instead, they claim the notices went out because the technology had not been tested alongside the food safety protocols of their ice cream machines.

Nelson and O’Sullivan are suing McDonald’s for $900 million in damages, saying that’s what their company would have been worth if McDonald’s had not warned its franchisees away from the product.

McDonald’s has denied that the lawsuit has any merit. Instead, it claims it sent out the notices as a safety precaution to ensure all their suppliers are fully vetted when it comes to safety standards.

Nelson and O’Sullivan tell a different story. Rather than buy Kytch’s product, they allege McDonald’s and Taylor Company had been meeting regularly with franchisees who had bought Kytch’s product to try to reverse engineer the technology so they could make it themselves, thereby eliminating Kytch from the market.

Kytch has also filed a separate lawsuit against Taylor Company in a court in California, but a judge recently dismissed Kytch’s request to file an injunction against Taylor. According to the judge, there was no evidence that Taylor’s system used any of Kytch’s trade secrets, but a final decision in the lawsuit has yet to be made.Our Cook County defamation attorneys near Wilmette and Highland Park represent and prosecute defamation claims on behalf of individuals and businesses throughout the Chicagoland area including in Lisle and Downers Grove who have been unfairly and falsely defamed online and offline. We have successfully represented businesses who have been the victim of competitors setting up false rating websites in order to publish defamatory content about our business clients. Beyond slander and libel law, our Chicago business, consumer, and class-action litigation lawyers represent individuals, family businesses, and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and cost-effectively as possible, helping clients protect their rights and reputations and allowing business clients to get back to business as usual. We serve clients in the Chicagoland area and throughout Illinois. You can contact us toll-free at 833-306-4933 or locally at 630-333-0333 or online here.

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