Fast Food Giant McDonald’s Considers Partial Sale of Dynamic Yield

McDonald’s is considering selling part of its drive-thru tech start up Dynamic Yield according to recent reports.

The fast-food giant had purchased the artificial intelligence company in 2019 and was the biggest acquisition for the company in 20 years. The deal was valued at more than $300 million

The technology allows menus at McDonald’s drive-thrus to change based on different factors including weather, current traffic and more.

According to a Wall Street Journal report, McDonald’s has said that the potential sale is exploratory and preliminary at this point and it is possible it might not happen.

“The potential sale of the non-McDonald’s part of our business has been discussed from the outset and now feels like the right time to explore that possibility. We look forward to our continued relationship while continuing to expand the use of Dynamic Yield’s technology at McDonald’s restaurants around the world,” said Liad Agmon, founder and CEO of Dynamic Yield.

McDonald’s restaurant owners have been pushing back against technology fees, separate from Dynamic Yield, that McDonald’s says are owed due to a lag in billing in 2017, and the end of a longstanding subsidy for Happy Meals.

On its latest earnings call, McDonald’s CEO Chris Kempczinski told analysts that he was confident that U.S. President Joe Erlinger and franchisee leadership would be able to work through the disagreement.

According to a February email from owner advocacy group the National Owners Association to members that was viewed by CNBC, the NOA board said the company has not proven franchisees owe technology fees of $423 a month on past uncollected dues that amount to $70 million.

McDonald’s has agreed to engage Ernst & Young for an independent audit in an attempt to resolve the dispute.

“What we do not do, is allow our suppliers to dictate to us what we owe and what we don’t owe other than on the basis of services rendered. If we find ourselves in this type of relationship, we find a different supplier,” the NOA board said.

NOA said: “There is no reason that McDonald’s should be our third party technology provider nor that they should administer technology in the manner they do.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.