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Comment by kube-system | Hacker News Reader

That doesn't really make any sense in the context of a franchise. AFAIK McDonalds franchises are required to buy those specific Taylor machines.

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Why doesn't it make sense? Taylor makes crap, Taylor sells crap to "Smallville Burgers, LLC", Taylor pays agonizing penalties & fines. Doesn't matter if the victim bought the Taylor equipment because McD's contract required it, or because their daughter is a Swiftie.

Taylor doesn't think there's anything wrong with their machine, the maintenance is just onerous. The result of applying any Lemon Law here would be that Taylor buys the machine back. Leaving the franchisee without an ice cream machine, and potentially out of a franchise. Given that an ice cream machine costs thousands, and MCD franchises cost millions, it is a no brainer to just deal with the machine.

If Taylor just buys everything back, they no longer have a business, no? Wouldn't that be a good incentive structure for change?

Taylor wouldn't be buying anything back because no franchisee wants to torpedo their investment over an ice cream machine.

Assume a loophole-free Commercial Equipment Lemon Law would disallow any "Oops, sorry, your contract with McD. requires you to suffer while we profit!" crap. Or perhaps McD. would also be liable for agonizing fines?

Then you're not talking about a lemon law, you're talking about something else. I think what you actually want are laws that regulate franchise agreements. That's the actual problem here.

> If Taylor just buys everything back, they no longer have a business, no?

No. They have a monopoly.

If they’re forced to buy them back, they’ll incorporate that cost into the next round that the franchises are required to purchase.

If Taylor buy $X machines back for $X plus agonizing financial penalties, then figures they'll recover the losses selling $2X machines...$4X machines - then the SEC will be expecting "Taylor may not be a viable or sustainable business" disclosures in Taylor's next quarterly filing. If there is one - major creditors and investors could move first.

> then figures they'll recover the losses selling $2X machines...$4X machines

Yes, this is what having a captive market means.

The problem is the franchise agreement. Shoehorning this into a lemon-law framework doesn’t work.

Forcing a buyback of defective equipment does not preclude the purchase of a new, non-defective unit. Without the lemon law, the buyer would toss the old unit out without compensation and buy a new one. This way, the buyer will get money back from the defective unit and be able to get a new unit with it.

The McDonald's franchise agreement is what precludes the purchase of a non-defective unit.

Sounds like Taylor will be set up to loose a lot of money if they don't fix the lemon. Even if it's just swapping out a lemon for a new lemon, Taylor will have an incentive to fix this.

There's a lot of miscommunication on this topic. These "broken" machines aren't actually "broken".

They require extensive cleaning cycles and some operations require manufacturer servicing. It's just they way they work, it's documented, and there are service contracts in place to do the servicing.

When the kid at the drive through says the ice cream machine is "broken", what is actually meant is that it is currently not producing ice cream, and they don't want to argue with the person who wants ice cream. But the reason isn't that it is malfunctioning.

Taylor isn't losing money "fixing" these machines, the maintenance they do on them is on contract, and is quite lucrative.

> Leaving the franchisee without an ice cream machine, and potentially out of a franchise

Their ice cream machines are broken so often that it’s already become a meme. They might as well not have them at this point.

Right, we know they're broken all of the time. However, the franchisees must have the machines to comply with their franchise agreement which grants them the ability to sell any McDonalds food.

The machine it sells to McDonald franchisee are crap. They make other ice cream machines for other franchises and they don't seem to have the same repair issues.

It does because McDonald's isn't the one that suffers. It's the franchise owners having revenue extracted by them from the ice cream company and McDonald's corporate.

Taylor makes perfectly good machines for other restaurants iirc.

The McDonald's machines ARE unique and supposedly superior. They can sterilize the feed liquid without removing it from the machine.

Nominally, this is far more idiot proof than other machines which are dependent upon underpaid fast food staff cleaning the machine correctly every single night.

The problem is that Taylor didn't allocate enough development funding because the sales volumes are low and consequently they produced an unreliable machine. Even worse, Taylor gets to double dip by being the only people allowed to repair the unreliable machine.

McDonald's only cares in that the machine doesn't give customers food poisoning--for them, mission accomplished. Taylor only sees positive cashflow from repair and consequently has zero incentive to improve the machine--mission accomplished.

The fact that the franchisees get shafted isn't on the radar.

From what I recall (and I may be wrong) the McDs versions are "idiot proofed" in ways that the other restaurant machines aren't.

The complaint is you can't de-idiot proof it, even if you know what you're doing (and some McDs franchises are owned by people who run other restaurants with the other machines).

It's quite possible that McDs requires these idiot-proof ones because the risk of "someone got sick from the ice cream gonorreah machine" is too high.

This. They breakdown on purpose if not cleaned. Being dairy and all, I think it's a good plan.

A Lemon Law wouldn't let franchisees use different machines. A Lemon Law would (might) require Taylor to buy them back, which wouldn't be desirable for a franchisee.

> ”McDonalds franchises are required to buy those specific Taylor machines.”

This is the weird part. Why doesn’t McDonald’s step in and certify an additional equipment supplier so that franchisees have a choice?

This would put competitive pressure on Taylor to improve their machines, since franchisees are likely to avoid equipment that is unreliable or has high maintenance costs.

McDonald’s customers would be happier too. It reflects poorly on the McDonald’s brand that there is this constant guessing game (or having to check in the app) of whether shakes and flurries etc are available at any given time/location.

McDonald's corporate doesn't give a shit about the health of their franchises, they're getting kickbacks every time they renew their contract with Taylor. Taylor makes non-garbage ice cream machines that work just fine at, e.g. Wendy's.

McDonald's just has the brand-recognition and clout to get away with a shitty corrupt practice for the moment, so that's what they're doing. For money.

Because the only thing McD cares about is getting theirs

"Ice Cream machine out of operation because of technical issue?" Not their problem

They used to be, but have not been for like four years. But most of them still choose it anyway, because it is a perfectly good machine, and even with their ridiculous repair restrictions, the economic case is still better than the competitor.

The problem exists outside the arena of franchisor/franchisee relationships. The downthread idea of a DMCA exemption for repair reasons is a very good one.

Yeah, a DMCA exemption for repair is a great idea. It has absolutely nothing to do with lemon law, however.

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