“Kytch points to documents from the time of Taylor's acquisition by Middleby in 2018 that show the company receives close to 25 of its revenue—from all its customers, not just McDonald's—via repair contracts with Taylor distributors, which Kytch argues provides an incentive to maintain the machines' fragility.“
The missing piece is the kickback to McDonald’s, or a similar financial incentive from Taylor to maintain the status quo. I imagine that’d be a component of discovery or information requested by a federal regulator.
Well is that repair contract a retainer? i.e., "I pay you $10,000/year and every time my machine breaks you send out a tech within 4 hours to fix it at no extra cost? or is the actual cost of repairs the customer incurs?
If it's the first (and I think it is), then Taylor has every incentive to make the machines as reliable as possible. Service calls are expensive and most companies don't make a lot of money doing them. OTOH, a service contract (e.g., maintenance contract in software) is often lucrative because the customer is buying peace of mind. Years can go by in which the contract isn't needed and the seller (Taylor) pockets the cash, but the buyer keeps paying for it because it's cheap insurance.
The missing piece is the kickback to McDonald’s, or a similar financial incentive from Taylor to maintain the status quo. I imagine that’d be a component of discovery or information requested by a federal regulator.