- Have you heard the conspiracy
about McDonald's, about their ice cream.
- What about it?
(gentle upbeat music)
(loud sigh)
- Okay. So I've been investigating something
for a long time.
Probably deeper than I've gone on any other video
for a while at least.
Something I never thought I would be investigating,
but I am.
I'm investigating McDonald's ice cream machines.
Who wants to go get ice cream.
- Me!
- [McDonald Attendant] Hello, can I take your order?
- Can I get an ice cream cone?
- [McDonald Attendant] We don't have ice cream right now.
- Not today.
- [McDonald Attendant] Not today.
- Maybe tomorrow or something?
- [McDonald Attendant] Or next week, I don't know.
- Does that happen a lot?
Like that, the machine's down.
- [McDonald Attendant] Yeah. In this store yeah.
- Okay.
For a few years now
people have taken notice that the ice cream machines
at McDonald's always seem to be down.
- [Woman] The ice cream machine part is not working.
- The broken ice cream machines
at McDonald's have been the fodder
for a lot of weird internet culture.
One guy even made an interactive map that shows
every single McDonald's that has a broken ice cream machine,
at this current moment.
- So I reverse engineered the Android app.
I think it was like, it was a meme
but nobody actually knew if this meme was correct or not,
but they didn't know that was like an,
actual thing that all the franchises are struggling with.
- But a couple months ago, I got an email
from a guy who said that he had a deeper story.
He said that they're important questions
that no one is asking,
and he promised me answers to those questions,
and data and evidence to back it up.
He even said that there's potentially,
something nefarious going on here.
- I was like,
"Okay, cool.
Another conspiracy theory
about these McDonald's ice cream makers."
So I asked my producer, Jack, to get on the phone
with this guy and hear him out.
A week later, Jack called me.
- [Jack] And there's actually something going on here.
I've been going through everything
and you really need to see this.
- Okay.
I was still highly skeptical that
this could be anything worth a video or an investigation,
but I decided to dive in anyway and see this evidence
for myself.
I started looking at data at internal McDonald's emails.
At these mind numbing, 100 page instruction manuals
for ice cream makers.
I started talking to McDonald's franchise owners
and managers, and guess, it turns out there is something
really weird going on here.
Something that hasn't been reported on before
and something that shows
that McDonald's broken ice cream machines
actually reveal a bigger story about
how big businesses protect one another.
Even if that means hurting their customers.
I never thought I'd be going down a deep investigation
into ice cream makers, but I am.
And I did.
And I wanna share with you what I learned.
(upbeat music)
- McDonald's is getting on (beep) nerves.
- And that machine is always down.
- The ice cream machine is broken.
- And if you tried to pull the lever, this what happens.
(loud whirring)
- Sorry, the ice cream machine is broken.
The broken McDonald's ice cream machine epidemic
has been so widespread for so long that it's a meme.
- [Man] You know what they're gonna say.
You already know, "The ice cream machine is broken."
(hiphop music)
- Ice cream machine is broken.
(hiphop music)
Kinda sounds like there's a story behind that one,
doesn't it?
(crowd laughing)
(gentle music)
- In this very moment,
if you look at McBroken, around 13%
of ice cream makers in the United States are not working.
That's any red dot on this map.
What a brilliant little tool Rashiq made.
I mean, this is just so good.
So Jack, why are the ice cream machines always broken?
- So once the internet started to notice this,
the Wall Street Journal and Business Insider
and a bunch of other outlets started to report on it.
And the conclusion that they came to
was that these machines aren't actually broken,
they're just going through a really long
and really complicated cleaning cycle
that lasts four hours at a time.
And when that happens, the employees tell you it's broken
because it's just easier.
But, don't take my word for it.
- So when you go there
and they tell you it's broken,
there's a high chance it's not broken,
it's just shut up for maintenance.
- Okay. So human error and this long cleaning cycle,
that was the conclusion that like everyone came to
and everyone seemed to be satisfied with that.
I mean, I would be satisfied with that.
It's a pretty tight conclusion, but hold on a second.
Wait a minute.
(upbeat music)
- Do you guys have Frosties?
- [Wendy's Attendant] Yeah.
- I was just at McDonald's
and the ice cream machine was broken
and it seems like it always is.
Is the ice cream machine broken here very often?
- [Wendy's Attendant] No. Yeah.
That's what McDonald's problem.
We wash our machines every single--
- Oh, that's cool.
Is it easy to do that or is it pretty complicated?
- [Wendy's Attendant] No, it's actually really easy
to clean it.
They're just lazy.
(Johnny laughing)
It's the honest truth.
That's the honest truth.
- So, Wendy's doesn't have this problem.
And what's crazy is that they use the same brand of machine
as McDonald's does, and yet they don't have a McBroken.
It's not an internet meme for them, nor is it
for other places that use the same brand of ice cream maker,
like In-N-Out or Chick-fil-A or a bunch of others.
So, why is it only McDonald's that has a problem
with the broken ice cream maker?
- [Attendant] That's only a McDonald's thing.
We don't have that issue.
- You don't have that issue here.
- [Attendant] I promise.
(Johnny laughing)
(gentle music)
- If you want a real answer on this,
you need to talk to the people who suffer the most
when these machines' broken,
which actually isn't McDonald's corporate,
it's the people who own these individual restaurants
or franchises.
These are the people who pay the price
in lost revenue, when the machine is broken.
So I talk to them.
I talked to managers who actually deal with broken machines
and I also went deep in this 111 page owner's manual,
which is not a read I recommend
but I will summarize what it says.
(gentle upbeat music)
What I've found is as mind boggling as it is infuriating.
To understand this, you have to understand
how these ice cream machines work, and why they break.
So I ask you to bear with me
as we learn how an ice cream machine
at McDonald's works, and why they always break.
Once you understand that
you will understand who is getting rich every time one
of these things breaks,
and why they have an incentive to keep them broken.
(bright hiphop music)
- And I was like,
"Okay. I'm gonna guess it's gonna be around like 5%.
And it came back to like 13%, which is insane.
- One question that needs to be asked is,
"Should you be building ice cream machines,
if after 17 years you still can't get the software right?"
(hiphop music)
- [Wendy's Attendant] No. Yeah, that's a McDonald's problem.
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Let's get back to McDonald's ice cream makers.
If somebody said, I have a product that 10% or 12%
of the time, it's not functioning
from an interest standard standpoint,
what does it look like?
- That's not good at all.
Being down for 10% all the time,
that's like,
no, you can't do that.
- So, let's look at the machine in question here.
It's this guy, the C602.
It's made by a company called Taylor.
This machine is made specifically for McDonald's.
Taylor is like an OG partner at McDonald's.
They've been doing business together
since the very beginning of McDonald's.
They're both based like a few miles away
from each other in Illinois.
They are old business partners going back decades.
But like I said, Taylor makes ice cream machines for a bunch
of other fast food restaurants like Wendy and Chick-fil-A,
and those machines aren't broken all the time.
So it's something very specific to McDonald's and Taylor
that explains the ice cream machine issue.
If you wanna start a McDonald's franchise,
you sign an agreement
with McDonald's corporate that says,
"I'm gonna open a restaurant
and I'll make sure that everything is standardized."
It's a part of this agreement that says you have
to use this kind of French fry
and you have to use one of two different companies
for your fryer and your grill or whatever.
When this new ice cream machine came out in 2003,
McDonald's had it in their agreement
with all their franchises, which is like 16,000
in the United States, that they had to use this machine.
No other machine.
They could not use any other machine on the planet,
They had to use the C602 made by McDonald's and Taylor.
It was in their agreement.
Usually franchisees can pick
between multiple different companies
for their gear in their store.
Not in this case, you had to use the C602.
So, let's dive into this machine.
(hiphop music)
Ice cream is dairy,
and dairy needs to be kept
at a certain temperature to stay safe.
The machine itself has all these pipes that have dairy going
through it all the time.
So what they do once per day is they heat up
the whole machine, including the ice cream mixture
to like 151 degrees Fahrenheit.
They leave it at that temperature for awhile,
while it kills off all the bacteria,
and then it comes back down to a freezing temperature
where it turns into ice cream.
That process takes about four hours.
And this is the thing that you hear about all the time
as the explanation for why the machine is always down.
(gentle music)
But here's the nuance here that really illuminates
the story.
Usually, the employees do this overnight,
while the store is closed.
Someone in the night shift gets the cleaning cycle going,
and then they lock up for the night.
The next morning,
new employees who are opening the store for the morning,
show up, and they look at the ice cream machine.
And on the screen, they usually see one of two things.
"Heat cycle was successful."
The ice cream machine is ready to use.
Or,
"Heat cycle failed."
They don't know exactly why the heat cycle failed overnight,
they're looking at this interface that looks
like it's from like 1983,
and all they see is something like,
"Heat mode failure,"
or some other obscure code
that doesn't really tell you what happened.
The machine is completely locked out
until you successfully run one of these heat cycles.
You have to run heat cycle.
Even if the heat cycle missed one
of these benchmarks by like one degree,
it's still just gonna tell you the thing failed.
Doesn't tell you why or by how much.
So the employee tells their manager,
the manager has no idea why the heat cycle failed,
and so they just tell their employee to like,
"Run it again."
Luckily it's the morning,
so, people aren't getting ice cream yet,
but like run the heat cycle again.
So, employee runs the heat cycle again and it fails again,
probably for the same reason it failed in the first place,
which nobody knows at this point.
PS, as a C602 ice cream machine insider,
the reason why it failed probably is because the hopper is
a little bit too full of the ice cream mix
and it takes a while for it to heat up and cool down
that massive matter.
So, just fill it a little bit less next time.
That's one of many reasons why it might fail.
Anyway, nobody knows this,
because they're just sitting there trying
to serve customers.
I worked in fast food in high school,
it's a chaotic world.
You're just trying to make people happy.
Meanwhile, the person's trying to like run the heat cycle,
it fails again.
So the heat cycle fails again.
Manager's pissed,
you have angry people asking for ice cream
and everyone's just saying like,
"Yeah, the ice cream machines down.
Sorry, we can't do anything about it."
So, finally, the manager calls the franchise owner,
the owner of the business and says,
"What do we do?"
And the franchise owner says,
"We need to get ice cream sales going.
This is not okay.
We're losing money.
Just call the guy."
(suspenseful music)
Just call the guy.
That's verbatim,
what one of the franchise owners told me.
He said,
"When things are crazy
I just tell them to just call the guy."
Now we're getting to the heart of this.
The guy in this case means one guy or woman,
which is an authorized service technician from Taylor,
the company who makes the machine.
Remember this?
- [Male Attendant] The ice cream machine
isn't working right now.
(dramatic music)
- No, I'm just hear here to fix the ice cream machine.
- Okay.
- You're from Taylor?
- Yes.
- Okay, 'cause I've never seen with a uniform
that why I'm a little bit--
- Okay. Yeah.
I always switch things up.
- Oh. So you're still Taylor?
- Yes ma'am.
- Okay.
- Turns out that Taylor
is the only company that is authorized to repair
and maintain these machines.
It's in their contract.
If you call anyone else, but Taylor,
first off they wouldn't know how to use it
'cause it's such a strange esoteric machine,
but also you would void your contract, your warranty.
So you call the service technician,
he or she comes to fix the machine.
We got our hands on some actual invoices
that show how much these Taylor repair people cost.
It's different in every market and for every scenario
but somewhere to the tune of $144 for the first 30 minutes.
And then up to hundreds of dollars
for each additional 15 minutes thereafter.
So the desperate franchise owner,
the one who runs the business has to decide,
"Do I deal with angry customers who are yelling at me
'cause they don't have ice cream, or do I just call the guy
and get them to come repair this at any cost?
It doesn't matter."
So these franchise owners
end up paying thousands and thousands of dollars,
not because their employees are competent,
or they're bad at training,
but because this machine locks them out
and they have no idea why.
They're looking at a screen that looks like this,
and all roads point to,
"Call the service technician."
I watched a bunch of advertisements for Taylor company,
people who make this ice cream machine
and do all the maintenance on it,
they hardly talk about their product here.
Their advertisements are more about
how great their repairs team is.
- [Advertiser] Innovators don't build machines.
They solve problems.
This is an expert technician.
There are 6,500 Taylor technicians worldwide
ready to help you.
The Taylor company!
(upbeat music)
- A few years ago, Taylor was in talks to be acquired
by another company called Middleby.
They put together a pitch deck of all their financials
to sort of say, like,
"Look at how good our business is."
And on that pitch deck,
they stated that 25% of their revenue comes
from this repair and parts service of their business.
Yes, they make ice cream machines,
but a quarter of their business comes
from just maintenance and repairs.
This sort of reoccurring revenue,
revenue you can rely on month after month,
is like gold for investors.
People love this because this is like,
you can project how much money you're gonna get every month,
if you can rely on a certain channel of revenue
in your business.
Taylor can rely on services and repairs
from McDonald's ice cream machines.
Remember, up until just a couple of years ago,
for years and years,
McDonald's franchises were only allowed
to use Taylor machines.
They had no options.
They couldn't be like,
"Wow, this machine sucks.
I'm gonna go somewhere else."
So they had to use the machines,
regardless,
and they had to use this specific machine
that breaks all of the time.
- [Taylor Advertiser] Their parts and service network,
is what makes Taylor the company
of choice for the food service industry.
- No matter what time of the (beep) day
the ice machine is broke.
How?
- [Mom] McDonald's is making my baby cry.
- How?
- We got our hands on the software for some
of these machines,
to see how Taylor has tried
to improve the software component.
You would imagine that
with a machine that is notoriously broken all the time,
it would update their software to give more useful feedback
to the user like,
"Hey your cleaning cycle failed last night
only by one degree,
and that's probably because your hopper was too full.
Try to fill it a little bit less next time."
Alas. No.
Since 2003, when this thing came out
there have been quite a few software updates.
But instead of improving usability of the software,
the software has actually introduced just new sets
of cryptic error codes
that don't help anyone solve any problems.
I have spent hours in this instruction manual
going through all of the error codes and what they mean.
I feel like maybe just maybe,
after reading this multiple times and like being
in the weeds, I could operate one of these machines
and maybe understand what's going on when things fail.
But it is clear to me that this machine is not set up
for the user to have success in diagnosing
and fixing the problem.
One person I was talking to was like,
they had just opened a store and they,
it was a brand new store, a brand new machine.
And they're like,
"Yeah, in the first few months
we called the guy like four or five times."
(chuckling)
I am blown away that a product like this,
with software this cryptic and horrible,
can exist in 2021.
The menus are horribly complicated.
The error codes are not helpful.
The buttons don't have words on them,
instead they're just like a bunch of symbols.
Like it's like press the flavor button,
press the ice cream button.
To get to here, like to access this menu,
press these two buttons at the same time.
It's like,
"How could you ever expect somebody,
especially like an entry-level employee,
who's been on the job for like a few days
to understand any of this."
It is a product that is set up to fail
and that has no incentive to improve,
because what this means for Taylor
is simply more services and repairs for their pocket.
25% of their entire business is based on this.
And then there's the secret menu.
(bright hiphop music)
In addition to the instruction manual that's given to users,
I also got a hold
of the service manual that is given
to the Taylor service people;
like this is like the insider manual
that gives you the whole picture on this machine.
I do not recommend you read it.
In this manual,
you learn about a separate menu for the service technicians.
It's called the Service Menu.
This one is not accessible to the user;
the person who owns the machine, the franchise owner.
It's only accessible
to the service techs who have very specific code for it.
The existence of this service menu is found nowhere
in the user manual;
the thing given to the person who owns the machine.
And yet, according to this manual, this menu contains quote,
"Critical operating parameters for the machine."
So wait, if this machine is breaking all
of the time and you have a franchise owner
who's trying to keep their customers happy,
and there's a menu where there are quote,
"Critical operating parameters,"
that the owner doesn't have access to,
just call the guy.
Just call the guy.
The machine is not meant to give the user a clear picture
on why it's breaking.
A few weeks ago, a Taylor service technician realized
that he was required to install this new software update
on all McDonald's machines.
He noticed that the update had a bunch
of weird new error codes that made the machine worse
and less functional.
So he posted a video about it
asking for help from other service technicians.
Shortly after he posted the video,
the video disappeared.
When asked what happened, he responded with quote,
"The system defeated me."
He was clearly told to take the video down.
Somebody doesn't want this sort of thing on the internet.
Now listen, this isn't some conspiracy.
There's all sorts of weird conspiracies
around the ice cream machines,
this isn't one of those.
This is actually very rational human and business behavior.
When one has a monopoly over ice cream makers
and they've created a particularly (beep) product
that breaks all the time
and gives users no clear feedback as to why it's broken,
this company has no incentive to improve.
In an open market,
the incentive to make your product better
comes from competition
and comes from basically ramifications.
You'll be driven out of business
if you don't make a good product.
In this case, that's not the dynamic.
And in fact, having a bad product is incentivized
because it means more money in services and repairs
for this business.
And the reason why McDonald's corporate is okay with that
is because the cost isn't born by them.
It's born by local franchise owners who have to pay
for services and repairs.
Taylor has the capacity to make
and improve ice cream makers.
They do that all the time at Wendy's,
and Chick-fil-A, and In-N-Out.
And yet the machine made for their OG exclusive partner,
McDonald's, doesn't receive the same improvement
and refinement.
Instead it receives a bunch
of new error codes and terrible user experience,
which always leads to "Call the guy."
One franchise owner I talked to said,
"All roads lead to, call the technician."
Like this product is designed to get you
to call the technician.
At this moment, as I'm talking to you, 15%
of all ice cream machines in the US are down.
The standard for most industrial products
is that you have less than a 1% failure rate
for your product.
In fact, the real target
for mass industrial products is 99.99966%
of the time your product is working.
That means 3.14 errors for every 1 million opportunities.
What you're seeing here with 15% is a dismal failure.
And this is the product of
no pressure or no incentive to improve.
And in fact, a perverse incentive to keep it (beep)
The last chapter of this story
is the one that is still developing today.
And it has to do with the email
I got a few months ago from somebody
who's deep in the middle of this.
I'm gonna lay out some facts here.
I'm gonna let the news play out over coming weeks and months
to see how this happens,
but here's what's going on.
The guy who reached out to me originally
was someone named Jeremy, who is a tech entrepreneur.
He invented a product that could basically fix this problem
of like terrible feedback
to the user of these ice cream machines.
It's this device that you plug
into your ice cream maker and it connects
with your phone and it gives you solid reporting
on all the things happening in your ice cream machine.
Something that this does not do.
And it identifies like actionable things
that you can do, to train your employees
to make sure that the problem doesn't happen again.
Basically, it avoids this happening in the first place
and avoid you needing to 'call the guy' all the time.
As soon as Jeremy launched this product
it was a smashing hit with franchise owners.
They started selling hundreds
of these things to franchises all across the country.
- [Reporter] People Magazine,
reports the chain has partnered with Kytch,
a company that created technology to help employees
manage the machines and reduce downtime.
- The franchise owners I talked to said
that instead of getting these vague error codes,
now they actually get like solid reporting
on what is happening inside this machine,
and they can like train their employees to help avoid this.
Now lemme just caveat for a second.
Jeremy and his company Kytch,
obviously have a big financial stake in this story.
I'm aware that he reached out to me and gave me some
of his data and that there's a big conflict
of interest in terms of like neutral journalism
and my informant being somebody who stands
to gain a lot of money,
if this story comes to life.
And that's why this story has taken me literally months
to report.
I've had to go through and independently report
and verify every single thing that Jeremy has told me.
Hence this.
(groaning sounds)
So, yes, while there is a major stake for Jeremy and Kytch
for this story and for exactly what I'm saying here,
the fact is everything that I've said here
checks out on my own independent reporting.
Just let that be known.
Okay. So Kytch got so popular among franchise owners
that at this conference where all the franchise owners
got together late last year to have a conference
to talk about McDonald's things,
sounds like a riveting conference,
the head of this organization
of franchise owners gets up and says,
- Now this is no silver bullet, but it's my belief
that the information it provides increases awareness
and results in faster reaction times
when a problem does occur.
Now, to be clear,
this is not a McDonald's approved piece of equipment.
- I mean, he sort of like endorsed it.
He was like,
"This is a sweet product.
It's actually helping us out."
Soon after this endorsement, McDonald's sends an email
to all of its franchises that says that they've determined
that Kytch is actually super dangerous.
It may cause serious safety risks, and they recommend
that the franchise owners stop using it,
saying that they will void their warranty if they do.
Wait, what?
So you have this device
that is clearly solving a major problem,
and instead of being like,
"Whoa, tell us more about this.
Let's see if we can get this like approved
and put it into more shops,"
they blacklist it.
And they scare away a bunch of their franchisees
from using it.
I reached out
to McDonald's directly to ask them point blank,
"Like WTF?
Why are you blacklisting a product that has
the potential to solve this problem
that you get made fun of all the time on the internet for?"
They came back to me with some boiler plate PR language
about being committed to their customers and all this stuff,
being able to buy sweet treats and all this.
And then this little nugget at the end where they say
that McDonald's is testing a connectivity solution
with an approved McDonald's supplier.
In other words, McDonald's is working
on a product that does exactly the same thing.
Oh, and the company that they're using
to do this is called Powerhouse Dynamics, who is,
wait for it, owned by the same company that owns Taylor.
They're under the same parent company,
Taylor and Powerhouse Dynamics.
They're keeping it in the family.
Oh, and this device, the new one that they're testing out,
doesn't give the full picture to the user.
It continues to block them out of certain aspects
of the machine that could be useful
in diagnosing why the machine is always broken.
The theme here is the same.
It has been the whole time.
Two old companies that have been working together
for a long time,
looking out for each other and keeping control over data
so that they can save their own necks
from being disrupted by new tech.
That is like a story, like that is as old as time,
and it is happening right here
in a potentially collusionary way.
Again, is this a deep conspiracy?
Is there like secret backdoor deals going on?
No, this is actually horribly predictable.
What this is, is old companies who are afraid
of being disrupted by smarter, better products,
doing whatever they can to hold on
to their share of the market.
This new connectivity product that McDonald's mentioned
to me, basically does the same thing as Kytch.
But this new device doesn't actually give the full picture.
It still blocks the user out of those things that have been
behind the technician's secret menu.
The things that the user manual itself says are critical.
It's the same old story of keeping tight control
over what data and experience the user has,
so that they can continue to maintain
their exclusive relationship
with services and repairs, which is 25% of their business.
It's honestly smart, shrewd, cutthroat, business behavior.
But you know who it hurts?
It hurts the franchisees
and it hurts all of us who wanna go buy McFlurries.
This is anti-competitive behavior.
Trying to squash new products
in the name of retaining control.
So, there's a lot of nuance here
that I've sort of blasted through very quickly,
but the upshot is that McDonald's ice cream makers
are broken more than everyone else's ice cream makers,
even though they're made by the same company,
because the company that makes them
has no incentive to improve,
and in fact has an incentive to keep them bad.
Over the years,
they've done a terrible job improving their software,
and they've kept employees, managers, and franchisees
in the dark of what's actually going on
with their ice cream maker,
preventing them from actually being able
to fix it themselves.
And when finally someone comes
with a product that could actually fix it,
they squash it in the name of their own product
that does sort of a worse version
of what that new product was going to do.
Kytch is suing McDonald's for a bunch of stuff.
Go read into the lawsuit if you'd like.
And certainly in coming months, we will learn the details
of exactly how this is all going down.
But for now next time you're
at McDonald's and they don't have ice cream,
just know that it's not because of lazy employees,
it's not because of lack of training,
it's because there's an old relationship
between two old companies that don't want things to change.