it means it needs to be fixed or replaced. it needs a repair.
See explanation here: https://books.google.com.au/books?id=3_6oRAJSHP4C&pg=PT750&lpg=PT750&dq=item+is+on+the+fritz&source=bl&ots=l-dqbZIw_c&sig=D8jnvbfkzLK6CqKQ3ObgP1Gf52o&hl=en&sa=X&ved=0ahUKEwi_poLFodDZAhWKxLwKHaodB14Q6AEIcjAO#v=onepage&q=item%20is%20on%20the%20fritz&f=false