Krispy Kreme and McDonald’s Reevaluate Rollout for Doughnut Partnership

A potentially tasty doughnut deal between Krispy Kreme and McDonald’s has soured. The doughnut chain previously worked out a deal to bring its sweet treats into the fast-food giant’s 13,500 U.S. restaurants. However, the rollout is currently being reevaluated.

Krispy Kreme doughnuts could be found at roughly 2,400 McDonald’s restaurants as of the end of March. However, the doughnut chain’s leadership team is now saying that there will be no additional locations until sales increase.

“I remain confident in the long-term national opportunity, but we need to work together with them to identify levers to improve sales,” said Krispy Kreme CEO Josh Charlesworth, per CNBC.

According to Charlesworth, consumer demand fell below expectations after the initial launch with McDonald’s. Accordingly, the two companies are working toward solutions to accelerate sales and reduce costs.

Weak Quarterly Performance of Krispy Kreme and McDonald’s

Krispy Kreme has spent considerable time and money increasing capacity in anticipation of supplying McDonald’s locations across the country. The heavy capital investment ate away at any chance the doughnut chain had at making a profit. As such, Krispy Kreme reported a series of quarterly profit declines in the last 12 months, including the most recent period’s quarterly loss of $33 million.

In the meantime, McDonald’s isn’t faring much better. In its first quarter of 2025, the burger chain’s U.S. same-store sales dropped 3.6%. CEO Chris Kempczinski said consumers have been “grappling with uncertainty,” and foot traffic among the entire fast-food industry is down.

The decline in same-store sales was the largest drop in about five years for McDonald’s. Just after the second quarter of 2020, the burger giant reported an 8.7% decrease as people stayed home during COVID-19 lockdowns.

Neither company likely foresaw the economic challenges ahead when the partnership was announced over a year ago. Initially, McDonald’s agreed to sell Krispy Kreme doughnuts in all domestic locations by the end of 2026.

At the time, Krispy Kreme was optimistic about working with the top fast-food company in the world. It was a significant opportunity for the doughnut maker to expand beyond third-party grocery stores and gas stations as well as its own retail shops.