As Johnny Harris so eloquently points out in his "The REAL Reason McDonalds Ice Cream Machines Are Always Broken" video, other big brands like Wendy's use Taylor brand machines without problem or controversy. It's only the McDonalds machines that break because they are, in fact, designed to break, to help McDonalds corporate milk their franchisees. Pun intended.
One point: the machines aren't "broken" per se; typically the maintenance cycle does not complete and the machine only shows a very cryptic error message. The franchisee then needs to call out a Taylor service rep, wait for them and pay an expensive call-out charge. THe underlying issue is typically easily resolved; something like the hopper was too full of product so the heating cycle didn't get to the required temp; remove some and run it again".
So the reason they're always broken is they're not broken but the restauranteur has no way of knowing or resolving the issue.
It's definitely a fair or rather relevant distinction for the investigation, but for the end user, it's pretty much the same, especially if you're limited to using only that one specific machine.
> something like the hopper was too full of product
Shouldn't then there be a guide or actual limiter for maximum hopper fill level based on ambient temperature, or just a TSB, rather than perpetual service calls?
Taylor makes money from these service calls and the franchise owners have to use the machines mandated by McDonalds. There is absolutely no motivation for Taylor to kill this cash cow.
No, and the company is trying to kill a third-party vendor of a hardware dongle that tells you what is wrong, without needing expensive on-site human support calls.
The cleaning cycle doesn't complete during the night, usually because the hopper is too full, and when they come in the next day they just run the 4 hour cleaning cycle multiple times until the cryptic error goes away.
As the video showed, when someone invented an add-on for the machines to display human readable error messages, they got attacked with a lawsuit.
>In a recent legal victory, a judge awarded a temporary restraining order against Taylor after Kytch had alleged in a complaint that the McFlurry machine manufacturer had gotten its hands on a Kytch Solution Devices with the express intention of learning its trade secrets. The complaint also alleged that Taylor had told McDonald’s and its franchisees to stop using Kytch machines on the grounds that they were dangerous, and that the company had begun development on its own version of the Kytch system at the same time.
I think you have it backwards. However, you're still right in essence, since Taylor seems to be attempting to break compatibility with the Kytch machines. Sounds a lot like another company we talk about here...
> a judge awarded a temporary restraining order against Taylor after Kytch had alleged in a complaint that the McFlurry machine manufacturer had gotten its hands on a Kytch Solution Devices with the express intention of learning its trade secrets.
This seems like a strong argument that the concept of trade secrets should be done away with.
I think you have it backwards. Kytch is the company providing a diagnostic tool to fix the machines. The trade secrets were protected by NDA between kytch and someone at McDonald’s. The lawsuit is against someone who broke NDA and leaked information about the diagnostic device to Taylor. The allegation is that the manufacturer wants to prevent the diagnostic device from working.
And in turn, the Kytch device is an attempt to crack the trade secrets of the Taylor machines requiring service calls. I have a hard time rooting for either side on this one.
Company A builds a machine that breaks constantly and requires a lot of service — most of which people could do on site, but they can't because the error messages are not communicating anything.
Company B developed a device to read and display those error messages so the owners (?) of the machine can decide whether they fix it themselves or call support.
If I got this right I'd definitly be rooting for company B, because it offers a service that helps, while Company A apparently is afraid of not being able to compete if they just sell a working product instead of milking their customer via resource- and time-wasting service calls.
Which one of the two is that famous "innovation" capitalism is said to be good at producing?
Yeah, that's absolutely fair. I was referring specifically to the keeping of trade secrets on both sides here. I really do respect Kytch for breaking into these machines, but I don't like the way they have to fight to keep it to themselves. (Then again, it's really sh---y that Taylor is trying to maintain power by making their own Kytch-like device, or to block it from working at all. So I guess I'm convinced they're the bad guys here.)
You should add that Company A acquired the device from Company B so they could figure out how to make it not work (we all know that's their objective).
I'm not really satisfied with this explanation - it feels like a version of the broken window fallacy.
Thinking about McDonalds in aggregate, broken machines mean less revenue and more expense (to pay for Taylor call-outs). On a net basis a double loss to the organization as a whole.
Even if these losses fall more on the franchise holders than the company itself (although the company also suffers from the loss in revenue) - creating an incentive for the company, it'd doesn't make much sense to me. This would amount to a scheme to effectively increase franchise fees. Given the huge inefficiency involved as well as the cost of the reputation damage, it doesn't make sense to me when there are far more efficient mechanisms available to the company which would achieve the same thing.
Broken window is the idea that the economy as a whole is better off because of a broken window. That's fallacious. Some people benefited because they were paid to replace the window, but the economy as a whole is poorer. The original owner is out the cost of a window.
This isn't that fallacy. They aren't saying that there is an overall benefit to the window being broken. They are saying that McDonalds benefits at the expense of franchise owners.
That video was good, and it's been a few months since I've seen it, but I remember being a bit unsatisfied about the point you mentioned. It seemed implied to me that Wendy's and other places use the same kind of Taylor machines and it was never really explained why they don't break. I understand the idea that McDonalds requires using the Taylor machine which creates some of an incentive against fixing it, but it wasn't clear to me if the other companies don't require their use as well (which would create the same incentive), and even if they don't it doesn't really explain what's different about those machines since clearly they are functioning a lot better.
My understanding from one of the articles was that McDonalds wanted them to make a special model that did away with some portion of the manual process in favor of press-button maintenance, and they did.
Unfortunately, it turns out that it's hard to replicate the reliability and adaptability of human manual labor mechanically sometimes.
The point is that McD-corp gets IceC-corp big money by mandating a single machine from them. IceM(achine)-corp do this through broken maintenance process. Hence IceM-corp see machines very often and ensures as a third party that food-safety of ice-cream produced by these machines is satisfied. This is what McD-corp is getting back from it. They don't trust die Franchises and let them pay money for their own inspection.
This it's why the right to repair movment it's important. Should be seen as an add-on to anti-trust laws, not only consumer rights.
When I saw the Harris video, I could only facepalm when I hear the "if any 3rd party (no matter the credentials) touch the machine, it can be dangerous for the consumer"... it's an ice cream machine for god sake, not a nuclear plant reactor core.
There are a lot of professionals out there that are able to give maintenance and service to those machines, with zero risks to the customer.
Operating a franchise eliminates nearly all your individual rights. You’re paying for the privilege of selling a preconfigured product based upon its legal owner’s contractual guidelines.
If you open McJavchz’s burgers and get your own frostee machine then you’ll have that option. But if you are living in the McD world then you’ve signed that away.
Softserve machines can be quite dangerous to consumers. Combine a nearly an ideal growth medium with lots of little nooks and crannies for stuff to sit around indefinitely and it’s easy to start serving something that’s deadly.
Which isn’t really a defense of current practices, but I can definitely see how things broke down. McDonalds corporate might actually prefer it’s franchises to be stuck with such a poor deal simply to minimize risks.
Look you have a point, of course a bad DIY operation could be dangerous, but that's not what I'm referring to, or Right to repair it's.
Imagine if your house, could only be repaired (electric, plumbing, etc) by one corporation that is friends with the real state agency that sold you the house. Yes, electric DIY it's a bad idea, but you want the option to hire another trained / certified professional to do the job, maybe because price, quality, speed or reliability. Monopolies have the tendency to end bad for the user.
Their PR of the "one and only" company to do "safe" repairs, and that 3rd party are dangerous it's a lie. Other fast food restaurants are proof of this, they use the same machines, but can hire other companies to repair them, so they have much less downtime.
Replacing an old plug for a new one with USB, sure why not DIYit. Messing around with the breaker panel to add an electric car charger or an HVAC connection, my recommendation would be to hire a professional.
The main issue with AC electricity it's how easy is to learn the basics, and get overconfident because you got something working fast (sadly here I can talk about myself). But not knowing things like the NEC Code makes a difference, and that's when you want a technician or get into the rabbit hole of learning this deeply.
Simple details as ignoring the color code, not using the right AWG for the job, can easily cause a fire, or a hidden dangerous electric shock for future maintenance, making the installation a ticking bomb.
Again, the right to repair should not be confused with "anyone can do repairs", but having the choice of hiring a 3rd party professional to do the job (or do it yourself if you have the training) outside of the original vendor.
Much the same way that someone shouldn't do plumbing, roofing, or repair their brakes if they're not capable to do so, I agree that people who are incapable ought not be doing electrical work. There's no disagreement there.
Rossmanm mentioned that in the focus groups he ran people tended to believe that a manufacturer was more competent at repairs by default, even without evidence, but it's worth saying:
Show me any actual data that people being able to see human readable error codes would result in more injuries.
Even if that were somehow the case, demonstrate that the status quo would be less dangerous than putting the company in a position where it had more of an incentive to make ALL repairs safer. If a repair process is hazardous enough to make the machines barely safe enough to use if maintained by authorized repairmen, than that status quo discourages the company from making the repair process safer in general.
Still there should not be just one company who is able to service machines like these. Your company should be able to hire whatever company they see fit to repair such a thing and the manufacturer should be able to provide the information (plans etc) necessary to do so.
If you repair a car you can go to most mechanics, not just to the manufacturer. Everything else is monopolism
So in that example, either the authorized maintenance employs gods instead of normal people or the consumers are missing both eyes and possibly half the brain.
Because it doesn't take a genius to understand cleaning needs to be thorough, and the authorized cleaner isn't employing the best and brightest with CEO level salaries.
> When I saw the Harris video, I could only facepalm when I hear the "if any 3rd party (no matter the credentials) touch the machine, it can be dangerous for the consumer"... it's an ice cream machine for god sake, not a nuclear plant reactor core.
Well, an uninitiated third party might do something like open the gate to the cage of rats that's factory installed in each McFlurry machine, or flip the "Inject Asbestos Pellets In Ice Cream Mix" toggle to yes.
Just pointing out this is a Johnny Harris, who put out a video [1]. I was wondering what the vice president has to do with McDonalds icecream machines.
You're not following the plot here. Most McDonalds are franchises. The franchisee must pay for McDonalds authorized repair resources to repair machines they're mandated to operate. In other words the people that have to pay for the repairs don't have a choice in the matter.
So naturally they neglect it; 'sorry, the machine is down now.'
McDonalds makes more off the ice cream ingredients than fixing the machine. That argument doesn’t make sense.
The whole franchise model is having franchisees but ice cream mix or whatever. They won’t buy the mix if the machine is down.
I think it’s just hard to clean and people don’t like doing it. And everyone is short staffed. Googling cryptic codes is easy. Cleaning the machine is hard.
> McDonalds makes more off the ice cream ingredients than fixing the machine. That argument doesn’t make sense.
McDonald's doesn't make more off the ingredients of a day's sales of ice cream as it does off a service call, probably by a couple orders of magnitude. I'm not sure why you think it would.
It would be most profitable for McDonald's if the machine went down every single day. The problem with that is the franchises would stop selling ice cream, not that they'd have to trade $25 of ice cream ingredient profit for the profit off a high priced service call that you can respond to with a low-paid, minimally trained tech with a computer that just decodes a mundane error that can be fixed in seconds. A tech can probably do 15 of those a day.
I’m not sure how productive it is to argue with fake numbers but the base revenue off an appliance service call is maybe $125-250 (based on commercial utility service experience). That’s the revenue, so I’m not sure what the profit would be to McDs corporate but maybe $10-25.
Given that a location can sell hundreds or thousands of ice creams in a day. I would expect the margin to be higher on their supply cut than the service call cut so it seems more profitable to sell ice cream than even if there was a service visit every single day.
I’m surprised at the “can’t do arithmetic” takes on HN with things as simple as this. Like somehow there’s a conspiracy to rent seek a less profitable product (ice cream machine service) over McDonald’s main purpose (sell fast food).
It’s funny to imagine people thinking that there’s some conspiracy my mcd’s to make less money. But I think it’s just a misunderstanding of how franchising works.
Probably by a couple of orders of magnitude? So say they sell 1000 mcflurries in a day at $1 each for $1000. A couple of orders of magnitude would mean a service cost of $100,000 or am I missing something. Even if they only sold 100 which seems like absurdly low, then it would suggest a service cost of $10k.
They definitely don't sell 1,000 McFlurries a day. Assuming they fulfill one order every 30 seconds, and McFlurries are reasonably purchased between noon and midnight (never heard of a breakfast McFlurry). That's 1,440 orders per day. McFlurries are not going to have a 70% attach rate.
I live in South East Asia where there's fewer McDonalds restaurants, but they're much larger and higher volume than I've seen elsewhere (Europe, most of US and Australia). The ice cream machines often sit at the front of the restaurant (since many restaurants are located in malls). Many people pass by and buy ice cream only. But you can still order them with your regular menu from inside the restaurant. They sell a LOT of ice cream here.
I wasn't able to find good data on what percentage of customers order a McFlurry, but the linked article says they make 60% of dessert sales. I'm going to make a wild guess at this point that 50% of customers order a dessert of some description.
That means about 34 million people ordered a dessert, about 20 million McFlurries and 10 million other desserts.
Of those people, 3 million were not able to order a McFlurry because the machine was broken, so let's remove those 3 million from the total.
31 million people, 20 million McFlurries.
Assumption then would be that on average, around 1/3 of customers will order a McFlurry in a random restaurant (50% x 66%).
68 million customers across 39 000 restaurants is around 1 700 customers per restaurant per day, of which around 570 will order a McFlurry.
Taylor have a helpful calculator on their website (https://taylornewengland.com/sales/soft-serve-ice-cream-prof...), with likely optimistic estimates and don't show any wastage, but we're ballparking anyway. They say that food cost + napkin + cone comes to around $0.29, meaning daily profit from ice cream would be around $1 200.
Conclusion, it's pretty unlikely the difference is on the 'orders of magnitude' scale.
As a side note, given that the cost of a new machine is around $18 000 (https://www.wired.com/story/they-hacked-mcdonalds-ice-cream-...), after 15 days of the machine being out of order, the cost in lost sales is as much as buying a new machine (lower by whatever the Taylor callout fee is).
Given that 9% of 365 is around 33 (more than double the cost of a new machine), it seems that the more cost-effective solution would probably be to have a second, standby machine, from which McFlurries could be served while waiting for the callout.
As a consumer, the fact that McDonald's requires the manufacturer or authorized personnel to repair machinery is the main reason I even go there. And by there I mean whichever one I'm near.
Oh sure the mcflurry machine might suck. But I nearly never get a bad coke, bad coffee, undercooked food or crappy fries. It's always the same no matter where or when I go.
I'm willing to pay a little extra knowing I'm not wasting time or money stopping by.
This I think is what McDonald's is trying to protect.
I am not trying to be snarky but I could see it coming across that way... How have we kept humanity fed for most of human history without the corporations to keep us safe?
Are you serious? Before health codes and competent companies the quality of food was shockingly bad all over the place, and there are still so many issues. People think covid is bad have very little idea how dangerous basic life used to be, and in no small way was this caused in part by food safety.
Food born illnesses (e.coli, salmonella, norovirus) have ravaged societies for hundreds of years.
only very recently in the west have we been able to say "this food sucks" because of our opinion of the taste, look. It used to be "I will eat this food that sucks" because even though it tasted sour that's all there was.
If our two gut biomes where examined by the same gastroenterologist, they might say mine is more bacterially mono-cultured and yours is more cultured. Who's to say that's bad?
An experiment that isn't reasonable: Go to a Gastroenterologist, tell them you regularly or have no issue eating molded food/expired, and see if you carry the same heath insurance provider within a week.
You would balk at the realization that those eating habits you mentioned aren't thought of as "healthy" by those analyzing healthy eating habits and adjusting insurance rates off of it.
All of human history has been much more dangerous in general than the current time, and dangerous food has always been one of the risks, at levels we would currently find shocking and unacceptable. The tradeoff is that starvation and malnutrition have also been serious concerns for all of human history, too. Your grocery store, full of safe and abundant food, is the historical exception, not the norm.
You know the original meaning of the word "sophisticated"?
You know the "slug in the bottle" case?
Historically, people were not well protected, and traders took advantage of this. We survived because we're tough enough to ride out most food poisoning, but some childhood mortality probably comes down to this, as would some other shorter lifespan on the tables of mortality.
So yes, for most of human history we didn't have either corporations or laws about food hygiene. Except I think you'll find some of the earliest laws are in fact, about food hygene: market regulation was about markets in the literal, tables of goods in the square sense. The right to run a market came with the requirement to run it properly for the common good. Burghers prohibited butchers from dumping waste meat.
I think our wires have been crossed. My issue isn't that food safety hasn't been an issue for humanity, it is the idea that corporations are the party that have lead the charge for stricter food safery standards (other than CYA) and that we should defer to them.
If the FDA wants to audit kytch to ensure their software and hardware is compliant, by all means. I am however not going to trust mcdonalds or taylor to do that.
Corporations didn’t lead the charge but they have a higher chance of better compliance because of their size and age. There are of course superb independent restaurants but there are also terrible ones, a corporate parent provides a decent signal that a minimum of safety policies will be followed. A finicky machine that breaks all the time because exact procedure isn’t followed sucks for uptime but is great for safety. Preferably the ergonomics of the thing would be redesigned for robustness but it seems incentives aren’t aligned properly.
What are you talking about corporations leading the charge? They couldn't care less until the publication of "The Jungle" by Upton Sinclair. He talked about how they would do whatever was necessary to make spoiled food saleable. If that meant adding talc or bleaching it then so be it. If that meant turning hot dogs into the most amazing use of waste they would.
In fact I would argue it is against corporations best interest in ancient time to ensure food safety, because it would increase waste
Well for me it's not about safety, but quality. I know my drink isn't going to taste funny or my food taste off. Part of that is stringent and high quality repair and calibration.
There's a reason I go to McDonald's more than, say, burger King, KFC, or wendy's for my junk food fix.
That isn't mcdonald's or taylor's argument though, they are spinning this as safety issue to scare people into believing someone sorting out their horrible engineering is going to lead to food borne illness.
> Oh sure the mcflurry machine might suck. But I nearly never get a bad coke, bad coffee, undercooked food or crappy fries. It's always the same no matter where or when I go.
I haven't done fast food in awhile because it's terrible, but this is a far cry from my experiences.
I've had undercooked chicken nuggets that were slimey, coffee that had sat in the pot so long it became sludge, and almost half of the time get flat coke or a different beverage than I ordered (diet instead of zero, or with strong hints of orange).
These aren't one-off experiences, but easily a quarter to a third of my past visits. To several stores.
McDonald's has shit quality control in every dimension. It's astonishing to me that they produced the breakout success that was Chipotle. Or that they maintain their present market cap.
McDonalds corporate has a cozy relationship with the various equipment suppliers that includes a cut of sales to their franchisees. Due to this relationship they have essentially turned a blind eye to the behaviour of the company that supplies the ice cream machines.
Yeah, here the main person affected it's the restaurant owner that rents the McD franchise. They are affected with downtime in one of their products, and can only hire 1 company to do the repairs, the one authorized by McD.
We cant let our guard down. its not a nuclear plant reactor core yet, but the moment we let our guard down creates an opening for the Soviets to drop a rod of Uranium-235 into the ice cream machine and then who's laughing? not mcdonalds customers that's for sure.
I highly doubt any major corporate franchise is going to risk repairing any of their own industrial machines or have a 3rd party do it, without a warranty.
Taylor already said McDonalds franchises are free to fix the machines themselves but it breaks the warranty. This is usually for a good reason.
This isn't even a question of repair. Mostly what they need is a tool that gives them human readable error messages so they can correct whatever minor issue that they'd be told to correct with a service call.
As others mention most of the problems seem to be tank is too full or not full enough to complete a heating cycle. Most consumer grade machines would just display that directly or at least list the error code in the manual, the McDonalds machines don't.
Press the cone icon on the screen of the Taylor C602 digital ice cream machine ... then tap the buttons that show a snowflake and a milkshake to set the digits on the screen to 5, then 2, then 3, then 1. After that precise series of no fewer than 16 button presses, a menu magically unlocks.
Seems to be a fairly obvious (in the common sense, rather than the legal sense) of deliberate obfuscation to directly curtail 3rd party repair.
As someone who's done some time in embedded, that sounds like they needed a repair menu and didn't want to add a dedicated number pad. It's a fairly typical solution. Similarly, these expensive industrial machines with lots of moving parts often have a whole bunch of tunable parameters somewhere. Setting these parameters incorrectly can sometimes make the product unsafe or self-destructive, so it's often a good idea to secure access.
There may very well be obfuscation here, but the technician menu doesn't really demonstrate it to me. The lack of repair franchising/certification is more problematic, but that's the most of the industry at this point.
I agree (also from a career in embedded). People forget that before Bluetooth Low Energy and everyone walking around with cheap, sophisticated computers in their pockets, putting an easily navigable menu on a machine that didn't otherwise need one was expensive. If your machine didn't need a keypad or a display in normal operation, you simply wouldn't have one. Maybe you'd show error codes by blinking an LED in a certain pattern. These days, it's cheap to have an available BLE connection to a cell phone that can provide a nice text or graphical control screen to tell you everything you need to know about the machine.
A lot of the cost is in the UI and that gets offloaded to the the user's phone.
All McD equipment like this has a manager or service password to adjust things like temperature calibration values, diagnostic routines, or error logs but keep the kitchen staff from fucking with it. Or causing a health or safety issue.
The C602 doesn't have a keyboard, so this is how you enter the password.
I'm honestly shocked McDonalds corporate let this situation fester. Like I've seen the allegation that corporate is incentivized to milk franchisees but honestly I just don't buy that.
The McFlurry machines being broken is now part of popular culture. It's a meme. There are websites to track if they're "broken". And they're broken a lot.
How can a company like McDonalds take that kind of brand hit? Screwing franchisees makes even less sense.
Honestly I'd be more inclined to believe that it's some current or former McDonalds executive with a relationship to Taylors such that they or someone they know is directly benefitting from the support contracts.
Ok, so how does the franchisee paying high fees to Taylors for "support" help McD's bottom line? Are they getting a kickback of some kind? Maybe. I'm not sure I've seen any evidence of that.
Best guess: Taylors made a generous bid to McD corporate to become the exclusive provider of ice cream machines. This bid gives a chunk of money to McD corporate and promises maximum machine costs and maintenance call-out costs for franchisees. However it has no guarantees for call-out frequency, so as per a razor-and-blades business model this is how Taylors is now getting all their profits and the KPI they are maximising.
Why would mcdonald's take a bid from a company saying, essentially:
"Our package includes unnecessary maintenance costs and ill-perceived customer opinions of service. But we will pay you for that, and force the maintenece cost on your business partner, the franchise."
WHy wouldn't mcdonalds just choose s supplier that has a machine that works? And why would taylor pay them so that they can charge the franchisee...?
It smells more like internal corporate corruption than a deliberate top down policy.
Nonetheless corruption is tolerated from above for all manner of different reasons.
I'm pretty sure I've seen similar behavior at large, rich corporations where they've been milked via crappy contracts with shitty companies which have only an indirect effect on the bottom line.
This is just so wrong though. The McFlurry machine is a separate piece of equipment - a “blender” that the spoon attaches to and stirs the ice cream and your toppings. That is why the spoon looks like a straw, because the spoon essentially attaches to the end of a drill machine.
What the author should have said, and they’d have known this if they talked about this article to anyone who has ever worked at a McDonald’s, was that the Ice Cream+Shake machine is the piece of equipment manufactured and serviced by Taylor. It has dual chambers that allow one to dispense “shakes” and the other to dispense soft serve ice cream.
It’s just really frustrating to see how little people even bother to understand yet try to ‘dispense’ to others that they have some sort of authority or knowledge on a topic.
> But after Kytch co-founder Jeremy O’Sullivan accused Taylor of infringing on McDonald’s franchisees’ rights to repair their own McFlurry machines and intellectual property theft in a lawsuit, the FTC reportedly stepped in.
The lawsuit mentioned above is found here (and has more details on the "jank code").
Love how they are literally copying/pasting tweets in the prelim statement. I haven't read through a lot of lawsuits but this is the first time I've seen screenshots of tweets in them.
My considered take on the McFlurry machines is that it's products are primarily a loss-leader for McDonalds. Folks are attracted by the low-priced dessert offerings from the McFlurry machines (which conveniently don't work), so somehow psychologically the attractor remains and is a factor in walking in decisions. Obviously these machines cannot be broken all the time everywhere in the world - but they are ! IMHO Johny Harris's take on the matter does not address the 'loss-leader' / Psychological reason that I put forward.
>Johny Harris's take on the matter does not address the 'loss-leader' / Psychological reason that I put forward.
Well, some data would be advisable. Is it a loss leader? Is their ice cream priced lower than wendy's, burger king, in-n-out or similar? To the best of my knowledge, none of those places have this problem.
In my observation, in international markets the price of a McDonald's soft-cone dessert is 1/6th of their primary burger ! Source (for example): https://menuprice.co/in/mcdonalds-menu . The pricing is simply unsustainable if folks walk in only to purchase the soft-cone. The clever marketing folks understand this underlying 'loss-leader' dynamic. The consumers would not tell you this explicitly - as it would appear to be 'cheap' on their part, but consider it a good-deal whenever the 'McFlurry' machines work. Further it has been shown sugar is pretty addictive.
What does the price of a cone in relation to the price of a burger have to do with a cone being a loss leader or not? The price of a burger has absolutely nothing to do with their costs on the cone.
If the cone is profitable to sell, then it's not a loss leader and they have every incentive to sell as many of them as they can.
The cone is not profitable at about 25 to 30 Cents US (including local taxes) in international markets - where dairy ingredients, stable electricity and store front rental in a fancy location are expensive. The burgers (about $2.50 USD) on the other hand rake in 100-200 % profits. Regular Coke sells at about $1 USD; again comparable to US market prices.
> dairy ingredients, stable electricity and store front rental in a fancy location are expensive
Two of those three are not really marginal costs. Yes, it costs electricity to make the food, but _stable_ electricity is something you already need in the biz, same as rent. If you need a generator, you already have one.
Also, enlighten me: are markets where electricity grids are unstable the same ones where retail space is expensive?
>Obviously these machines cannot be broken all the time everywhere in the world
I know this is hyperbole, just wanted to add a detail. This is a US-only issue. I don't think I have ever found a broken McFlurry machine in my part of Europe - and I had a LOT of McFlurries in my teenage years. I don't think they use the same Taylor machine here.
Parts of Europe, Australia & New Zealand are examples of well regulated markets and these issues would not crop up there; besides the engineering staff in the above mentioned countries would not participate in perpetuating this now well-known issue.
Are you serious? Then why do franchise owners want to get them back up quickly? Wouldn’t the goal be to let it stay down? Why would I ever come for dessert but stay for the burger?
I can get soft serve from QT for .49 cents. I don’t think McDonald’s is intentionally losing money on ice cream to get you to buy Big Macs.
I can only speak for most international markets. It is a loss-leader (calculate prices v/s similar dairy) and you intentionally let the machine stay broken (if it actually is). Some minimum wage worker takes the heat from the consumer, but that's OK. If you do a 'Money-Ball' type calculation, you will find this situation is beneficial. Just Don't tell me McDonald's corporate does not know of this and somehow choose not to provide a long-term fix to the problem. The YouTube video addresses only one angle of this IMHO.
I had a look at what machines they use here in Australia and they seem to be similar to Taylor machines that they showed being used in the USA (this video: https://youtu.be/SrDEtSlqJC4). However, they almost always seem to be working without issue. If they are almost the same machine (would be for 240v) then I guess I’m glad that whatever is going on in the USA hasn’t reached here. Now the frozen drinks machines (slurpee, slushie, slush puppies) are down a lot more often but even then it isn’t down as much as the ice cream machines in the USA.
But talking about McDonald’s McFlurry - in the USA do they still flurry it with the blending mixing spoon? They used to do that in Australia but now a McFlurry has no flurry and instead it’s just a plain sundae topped with Oreo crumbs or mini m&m’s.
Fascinating to see such a huge company intentionally or unintentionally committing suicide. A failure of this magnitude doesn’t happen in a vacuum. It points to a deep organizational rot.
They have lost the institutional ability to plan for the future. That being the case, I give them 10, 20 years at best. When the end comes it will happen fast and all kinds of graft and illegality will probably come to light. One cockroach out in the open is a sign of hundreds in the wall.
>But according to a new report, the Federal Trade Commission is familiar with the McFlurry machine as “potentially in violation of antitrust law,” which is pretty cold—colder than the frozen treats the machine serves up, you might say.
Why is swearing becoming more acceptable in what was suppose to be professional domains? Those posters in NYC telling you to wear the mask and get vaccinated come to mind.
McDonalds franchisees are required to purchase specific equipment, and required to use Taylor for servicing and repairs. The reason this is now on the Fed's radar is because there is strong support that McDonalds corporate is colluding with Taylor to continue this process and promote a system that makes them both money at the cost of the franchisee.
Wow, Joe is on a roll. Unlike the previous three presidents, he had the stones to stop the two-decade calamity despite constant sabotage by the bureaucratic state. Now he has seemingly put together a functional FTC, also despite inevitable undermining from executive-branch staff. I didn't vote for him before, but if he lives long enough he's going to get my vote next time around.
The (hilariously wrong) idea that Joe Biden is personally involved, perhaps due to the meme of his love of ice cream, is both entertaining and a fantastic window into the thought process of someone with a very poor understanding of civics.
Wait for the scandal, because it’s about to leak he was using US military equipment for his thievery. Not even the McMedia will be able to cover up the 22,000 humvees and 33 blackhawks we “donated”.
He picked the FTC chair didn't he? Khan just started mid June and is on a roll already. Its honestly refreshing that something is moving forward in this fundamentally broken country.
Well his signature is on the Executive Order,
and the order starts with “By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to promote the interests of American workers, businesses, and consumers, it is hereby ordered as follows:”. So I would say “hilariously wrong” and “poor understanding of civics” is a pretty bad characterization.
> The investigation comes after the Biden administration issued a sweeping executive order in July aimed at examining device repair restrictions across the board, including in the agriculture, healthcare, shipping, transportation, and technology sectors.
I'm not arguing that Joe personally is involved with this investigation, but the right to repair does seem to be on the administrations radar.
You are right, however it may be worth (reference: Michael Lewis's excellent book on Trump) keeping in mind that there will probably be an uptick in the amount (let's say) of government stuff because Trump left a huge amount of positions unfilled for quite a long time whereas Biden to the best of my knowledge hit the ground running with a fairly well drilled plan for what to actually do with all these positions.
