McDonald's & Krispy Kreme Call It Quits on Doughnut Deal
After over a year of testing, Krispy Kreme and McDonald's are ending their in-store doughnut partnership. The rollout began in March 2024 with plans to reach all U.S. McDonald’s outlets by 2026, but underwhelming sales made the arrangement unsustainable. The agreement officially ends on July 2, 2025.
Why It Fell Through
- Krispy Kreme Perspective: CEO Josh Charlesworth said costs didn’t match demand, rendering the model unprofitable. The company will now pause the rollout and refocus on profitable growth via high-volume retailers and international franchises.
- McDonald's Viewpoint: Alyssa Buetikofer, McDonald’s USA CMO, said the doughnuts met internal expectations but ultimately required a sustainable financial model. She emphasized the partnership's value while acknowledging its conclusion.
Scale & Context
- Deployment stats: As of March 2025, Krispy Kreme doughnuts were available in around 2,400 of McDonald’s approximately 14,000 U.S. locations.
- Broader market trends: The pause reflects wider challenges for fast-food chains—McDonald’s, Domino’s, Chipotle, and Starbucks all reported dips in same-store sales amid inflation-driven spending slowdowns.
- Krispy Kreme's outlook: Q1 revenue fell 15.3% year-over-year, net losses increased, and the company even suspended dividends to preserve cash. Its stock slid over 27% after announcing the pause.
What’s Next
- Krispy Kreme will continue selling through grocery retailers and franchise expansion.
- McDonald’s views Krispy Kreme as a minor component of its breakfast menu, so exiting this deal won't affect core operations.
Despite initial optimism, the Krispy Kreme–McDonald’s partnership didn't generate enough demand to sustain nationwide expansion. Now, both companies are refocusing on their strengths—Krispy Kreme on profitable sales channels, and McDonald’s on its core menu offerings.
