Captive Markets Are Just Hostages; Or Why Your McDonalds Never Seems To Have A Functioning Shake Machine
from the it-would-be-a-shame-if-your-machine-didn't-work...-oh-wait dept
McDonald's shake/ice cream machines are notoriously flaky. The most common response to requests for ice cream are sullen statements that the machine is down. It's so much a part of popular culture, an enterprising individual crafted a bot that lets people know which machines are up and which machines are going to be a waste of their time.
To be sure, the shake/ice cream device used in almost every McDonalds is a complicated piece of machinery. Not only does it need to provide two different kinds of ice cream-related products from the same machine, but it must do it while operated by employees whose fast food careers can be measured in days, if not hours.
But there's got to be a better way. And there probably is. But the company that makes the machines -- Taylor Restaurant Equipment -- doesn't want there to be a better way. It wants it to be Taylor's way... or no way at all.
A captured market is always a great thing... for product makers. As long as you don't care about end users -- whether they're people seeking ice cream or people wondering why they can't use their scanner because they're out of cyan ink -- you can corner a market and let the endless revenue streams wash over you.
A lot of companies have discovered this one simple trick: the best captive audience is one you hold hostage. That's how Taylor runs its ice cream machine business. It has hooked up with major players in the fast food industry and has limited franchisees' ability to handle any issues with their equipment on their own.
When the shake machine is down, no one onsite can fix it. That goes beyond planned obsolescence to planned incapacity. Wired has a fascinating article that touches on how Taylor has muscled everyone else out of the market by making its machines solely beholden to Taylor techs. (Please go read it. It is worth every minute of your time.) This means every franchisee must sign a lengthy service agreement if they expect to provide this product to customers on a far-from-regular basis.
Some enterprising hackers found out how to bypass the built-in problems Taylor inserts into every machine it sells. There's a code that allows access to the inner workings of the machine -- one that can also help translate its cryptic error messages. If franchisees had this information, they could do their own troubleshooting and repairs, rather than paying Taylor techs exorbitant amounts to, I don't know, press the reset button to allow the resumption of service.
So two years ago, after their own strange and painful travails with Taylor’s devices, 34-year-old O’Sullivan and his partner, 33-year-old Melissa Nelson, began selling a gadget about the size of a small paperback book, which they call Kytch. Install it inside your Taylor ice cream machine and connect it to your Wi-Fi, and it essentially hacks your hostile dairy extrusion appliance and offers access to its forbidden secrets. Kytch acts as a surveillance bug inside the machine, intercepting and eavesdropping on communications between its components and sending them to a far friendlier user interface than the one Taylor intended. The device not only displays all of the machine’s hidden internal data but logs it over time and even suggests troubleshooting solutions, all via the web or an app.
Franchise owners loved it. McDonalds was somewhat ambivalent... at least at first. Taylor hated it. It gave franchisees easily understandable information on their $18,000 machines, allowing them to head off problems and take care of issues that rose frequently, like inattention to detail when cleaning the machine or -- as in one case cited in Wired's report -- an overly enthusiastic employee loading up the machine with too much mix.
Taylor considers literally any information extracted from its machines to be proprietary. It spent months trying (without avail) to obtain a Kytch of its own to, presumably, reverse engineer or sue into nonexistence. One McDonalds exec apparently saw the value of the product, though, and gave it some free advertising during a franchisee conference.
But in the end, Taylor won. It used its leverage to hold McDonalds hostage, which resulted in every franchisee feeling the cold steel of Taylor's shake gun pressed to its head. It told franchisees use of the device would void the warranty. Then it made a device of its own to cut Kytch out of the market.
The very next day, McDonald’s sent another note to franchisees announcing a new machine called Taylor Shake Sundae Connectivity that would essentially duplicate many of Kytch’s features. The note ended with a repeat of its boldfaced warning not to use Kytch.
As McDonald’s restaurant owners canceled hundreds of subscriptions, trials, and commitments to install Kytch over the next months, the startup’s sales projections evaporated. Finding new customers became impossible. Their sole, flabbergasted salesperson quit.
Who needs to break knees when you can just instantly void franchise agreements? And who needs Stockholm Syndrome when the only other approved option for McDonalds franchisees is made in Italy and can cost thousands of dollars more?
But franchisees buy the machine. They own it. But they're unable to do anything with their purchase unless Taylor says it's ok. And right-to-repair laws won't change much -- not when McDonald's can literally end the lease on the property the restaurant is sitting on.
The fix is in. And actual fixes are expensive, thanks to only-game-in-town pricing that benefits Taylor and leaves customers wondering when the shake machine will be back up. If there's one thing to take away from this (beyond the borderline extortion masquerading as a business model), it's this: if the machine is down, don't yell at the employees. They can't do anything about it. And neither can the owner, most likely. Send your complaints to Taylor Restaurant Equipment, which is almost solely responsible for the inconvenience.
Filed Under: competition, drm, fast food, hacking, ice cream, kytch, shake machines
Companies: mcdonald's, taylor restaurant equipment
