The Indicator NPR hide caption
(SOUNDBITE OF DROP ELECTRIC'S "WAKING UP TO THE FIRE")
This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.
And I'm Brittany Cronin. And I'm here to get to the bottom of the question that has been on everyone's mind. You know what it is. Why are McFlurry machines always breaking?
SMITH: So McFlurries, if you have not had the pleasure of eating one, they are these delicious frozen treats from McDonald's. It is basically like if you took a cup of soft serve vanilla ice cream and you mixed in some kind of candy like Reese's Pieces or Oreos or something like that and then removed like 50% of the ice cream density.
CRONIN: And these soft serve ice cream machines are so broken so often it's become almost like natural law, according to TikTok, at least.
UNIDENTIFIED PERSON #1: (Singing) Welcome to McDonald's. What you order, bruh (ph)?
UNIDENTIFIED PERSON #2: (Singing) Can I get a Oreo McFlurry, yeah?
UNIDENTIFIED PERSON #1: (Singing) We're not serving ice cream right now. It's broken at the moment. Can I get you something else?
UNIDENTIFIED PERSON #2: (Singing) Oh, I know you gon (ph) say that.
CRONIN: Someone on Twitter even speculated about in the multiverse there are McDonald's in another dimension where the ice cream machine is the only thing that works.
SMITH: I want to go to there.
CRONIN: Me, too. So basically, there are just all these conspiracy theories out there.
JOHNNY HARRIS: And I sort of always wrote it off as, like, nothing.
CRONIN: This is video journalist Jonny Harris. The McFlurry story came onto his radar last spring.
HARRIS: When I got an email, and they said, hey, I've got information on this. I have data. I have evidence.
CRONIN: So he decided to take on the case.
HARRIS: And that's where it started to get spooky.
CRONIN: And as he dug deeper, Johnny found a story much bigger than ice cream machines, one that involves all kinds of electronic devices, medical and farming equipment, smart phones and computers and economic tales so juicy that the federal government has stepped in.
SMITH: Today on the show, why are McFlurry machines so broken so often? Also, what does this tell us about the rights of businesses and the rights of consumers?
CRONIN: Full disclosure. McDonald's is a supporter of NPR. Also, I've personally eaten a lot of McFlurries.
SMITH: You're a supporter of McFlurries personally (laughter).
CRONIN: One of the first things that grabbed Johnny Harris about the case of the broken McFlurry machines is the sheer scale of the problem. Like, Stacey, this is such a big deal that there's actually a website to track it, mcbroken.com. Johnny and I checked it out together.
HARRIS: What I'm looking at is a map of the United States. It has...
HARRIS: And Canada. Yes. And it has thousands of dots, each dot representing a McDonald's franchise. Green if the McDonald's ice cream machine is working and red if it is not.
CRONIN: Where are you right now?
HARRIS: I'm in Washington, D.C.
CRONIN: On the day we looked, 11% of ice cream machines in the U.S. are broken. In New York City, where I am, 30% are down.
HARRIS: And it's like, what widespread industrial machine has a failure rate of 30% or even 11%? Like, that is an absurd rate of failure.
SMITH: When the machine is down, it's annoying for the customer. They can't get their McFlurry. It is also bad for business. Ice cream machines are responsible for 60% of McDonald's dessert sales in the U.S. And remember, McDonald's usually are not corporate owned. Most of them are owned by individual franchisees. And those franchise owners, they want their ice cream money.
HARRIS: One franchise guy said to me, whenever something goes wrong and we see all these error codes, and it's the middle of the day, people are angry, they just call the guy.
CRONIN: The guy is industry speak for a Taylor Company approved technician. Johnny says the Taylor Company, who makes these ice cream machines, is the only company authorized to fix them. So the franchise owner calls the guy, and then the guy types a secret code into the ice cream machine.
HARRIS: And that is where the secret menu comes in.
CRONIN: The secret menu. We're not talking animals style or, like, Chipotle fries, though that would be delicious. The secret menu is a software menu. So it has all this information about what's actually going wrong with the machine.
HARRIS: If you go into this secret menu, you find out that there's actually a ton of feedback and a ton of data that workers could use to respond and do things differently next time.
CRONIN: This is all the nitty-gritty stuff like the milk viscosity and the temperature setting.
HARRIS: But that information is not made accessible to the owners and the users of the machine.
SMITH: That information is, however, made accessible to the technicians. So the owners of the McDonald's will often have no idea what happened or how to prevent their machines from breaking in the future. But they just end up having to pay the technician to do the repair and hope that whatever went wrong won't go wrong again.
CRONIN: But Johnny had more questions, like, why wouldn't Taylor tell the owners how to stop breaking the machines or tweak the machines so they don't break 30% of the time?
HARRIS: I was really held up on this idea of, like, why would these for-profit companies want their machines to be broken? And then I stumbled upon a document from Taylor.
CRONIN: Johnny showed me this financial statement that he found, and it was basically a breakdown of the company's sales and figures.
HARRIS: In just this one slide near the end, it said, we at Taylor - yes, we sell ice cream makers, but 25% of our revenue comes from reoccurring maintenance costs. That, like, pinged a light bulb for me. I realized, like, the incentive structure is to keep these things broken because it's an amazing business model.
SMITH: Typically in an open market, multiple companies will compete for somebody's business. So, like, if a McDonald's franchise owner is buying a fryer, they actually have a choice of different companies to buy their fryer from. The companies that make fryers end up competing with one another to make the best fryer or the least expensive fryer so they can make maximum sales.
SMITH: But when it comes to ice cream machines, franchise owners were only allowed to buy a Taylor machine, the same one that breaks down all the time. And so John is putting these pieces together, and he's kind of bothered by what he finds.
HARRIS: I mean, it's like ice cream and McFlurries, but I think the bottom line here is that there's a perverse incentive for Taylor to keep their machines terrible.
SMITH: We reached out to the Taylor Company and they denied this. They said their reputation is very important to them and they would never tarnish it just to make a quick buck. They also said they primarily sell their machines to independent distributors. And it's those distributors, not Taylor, who manage the repairs.
CRONIN: But there might be an economic incentive problem here because McDonald's gets to choose the ice cream machine supplier, but it's the franchise owner who asked to pay for the repairs. A huge deal to franchise owners, but kind of small fries to a company as huge as McDonald's.
SMITH: Mcdonald's is not doing nothing about this. It has heard the cries of the public. A couple of years ago, it broke up Taylor's ice cream monopoly by approving a new ice cream machine for franchisees. So now they have a choice between a couple of different models. But a lot of McDonald's are still using the Taylor machines, maybe because they like them, but also because replacing them is expensive. The machines are almost $20,000 apiece.
CRONIN: And now this whole McFlurry-gate (ph) has gotten the attention of the federal government. The Federal Trade Commission, the FTC, is now looking into the case of the broken McFlurry machine. This is part of a broader effort to investigate what the FTC calls device repair restrictions, aka the right to repair.
SMITH: And this repair issue applies to all sorts of products - tractors, ventilators, laptops, iPhones. In a lot of cases, the company will say, look, this is a really complicated product. We don't want just any old schmo coming in and, like, taking something apart and ending up damaging it or breaking it. But regulators are concerned that if companies say, like, only we can fix your product or only these approved vendors can fix the product, that could incentivize companies to maybe not make their products the best they could be or even incentivize them to make less-awesome products that might break kind of often.
CRONIN: And right now, the right to repair is kind of having a moment - 27 states considered right-to-repair legislation last year. And in November, Apple announced it will soon allow customers to repair their iPhones themselves.
SMITH: But, of course, the real test is going to be can Britney get her McFlurry when she wants one?
CRONIN: I won't be satisfied till I have an Oreo McFlurry.
SMITH: This episode of THE INDICATOR was produced by the great Jamila Huxtable, with help from Isaac Rodrigues. It was fact-checked by Corey Bridges. Our senior producer is Viet Le. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.
CRONIN: By the way, Johnny Harris aka Mr. McFlurry has a YouTube video a whole other chapter to this saga. His original source, the one who sent him the spooky email, hacked into the secret software menu and is now involved in a lawsuit with Taylor. We'll link to it in our show notes.
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