McDonald's and Krispy Kreme are ending a relationship that never really started

Krispy Kreme is pulling its doughnuts from McDonald’s restaurants across the U.S.

The partnership, which extended Krispy Kreme products to approximately 2,400 McDonald’s locations, ultimately didn’t make economic sense for the doughnut company, it announced Tuesday.

“We worked closely with McDonald’s to scale this initiative, but we weren’t able to align costs with customer demand,” CEO Josh Charlesworth said in a press release. “In the end, the economics just didn’t work for us.”

The Krispy Kreme–McDonald’s collaboration launched in March 2024 as part of the North Carolina-based doughnut company's broader effort to grow its national footprint by expanding availability beyond its own stores. The doughnuts were set to reach all 13,500 U.S. locations by the end of 2026. At the time, that news sent Krispy Kreme stock soaring by more than 39%, the largest one-day rise since going public in 2021.

But signs of strain became visible last month when Krispy Kreme said it was reconsidering the rollout timeline and trying to reshape the arrangement into a more financially viable model. The company’s stock fell 25% following the announcement. 

Profitability appears to be underscoring the backtrack. Krispy Kreme reported a net loss of $33 million for the quarter ended March 30. To achieve the nationwide rollout, the company invested in expanding capacity quickly. This weighed on profits, with the firm posting three quarterly net losses in the past year. In March, the company also withdrew its full-year forecast and suspended its quarterly dividend in response to economic uncertainty and cost pressures.

“We appreciated the partnership and were happy with the product Krispy Kreme delivered,” Alyssa Buetikofer, chief marketing and customer experience officer at McDonald’s USA, said in Tuesday's release. “But it also needed to be financially sustainable for them.”

Looking ahead, Krispy Kreme said it would concentrate on expansion through high-traffic retail channels and global franchises that require less capital investment.

For McDonald’s, the doughnut offering made up only a minor portion of its breakfast lineup, according to both companies. The fast-food giant, headquartered in Chicago, reaffirmed its commitment to breakfast as a key growth area and emphasized its focus on value and convenience for morning customers.