McDonald’s, Krispy Kreme announce drastic decision on partnership | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

In 2022, fast-food giants McDonald’s (MCD) and Krispy Kreme (DNUT) joined forces to test a unique collaboration.

It began with nine McDonald’s restaurants in Louisville, Ky., and the surrounding area, selling three popular Krispy Kreme Doughnuts: the Original Glazed Doughnut, Chocolate Iced with Sprinkles Doughnut, and the Raspberry Filled Doughnut.

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In a 2022 press release, McDonald’s said that this “small-scale test” will help it “understand how offering new bakery items like Krispy Kreme could impact operations” in its restaurants.

The test later rolled out to 160 McDonald’s restaurants in Kentucky. By March 2024, McDonald’s and Krispy Kreme announced that they were further expanding their partnership after “consumer excitement and demand exceeded expectations.”

They said Krispy Kreme doughnuts would be available nationwide at participating McDonald’s restaurants by the end of 2026. The doughnuts could be purchased individually or in boxes of six, starting at breakfast and lasting throughout the day.

A Krispy Kreme doughnut on a McDonald’s logo.

Image source&colon; TheStreet

McDonald’s and Krispy Kreme has sad news for fans

However, this match made in heaven just took an unexpected turn. McDonald’s and Krispy Kreme have both revealed that their partnership will officially end on July 2.

In a press release, Krispy Kreme CEO Josh Charlesworth said the partnership was “unsustainable” for the company.

“Our two companies partnered very closely, each supporting execution, marketing, and training, delivering a great consumer experience in approximately 2,400 McDonald’s restaurants,” said Charlesworth. “Ultimately, efforts to bring our costs in line with unit demand were unsuccessful, making the partnership unsustainable for us,” he added.

McDonald’s Chief Marketing Officer Alyssa Buetikofer said in the press release that the collaboration with Krispy Kreme “met our expectations;” however, it “needed to be a profitable business model for Krispy Kreme as well.”

The harsh decision comes after Krispy Kreme revealed in its first-quarter earnings report for 2025 that it faced a net loss of $33.4 million during the quarter. Its U.S. net revenues also declined by about 20% year-over-year as sales per hub in the U.S. dipped by 2%.

In the report, which was released on March 30, Krispy Kreme warned that there was “macroeconomic softness” and “uncertainty” around the schedule of its partnership expansion with McDonald’s, prompting it to withdraw its previous financial outlook for this year.

During an earnings call that month, Charlesworth said that Krispy Kreme saw a drop in consumer demand surrounding its McDonald’s partnership and would be “reassessing” its deployment schedule with the fast-food chain to “achieve a profitable business model for all parties.”

“We are seeing that after the initial marketing launch, demand drops below our expectations, requiring intervention,” said Charlesworth. “To deliver sustainable profitable growth, we are partnering with McDonald’s to increase sales by stimulating higher demand and cutting costs by simplifying operations.”

McDonald’s has also been suffering from a shift in customer behavior

The end of the Krispy Kreme and McDonald’s partnership also comes during a time when McDonald’s is struggling with weak consumer demand after facing controversy over its menu prices and a temporary E. coli outbreak in a few of its restaurants last year.

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During the first quarter of this year, McDonald’s saw a 3.6% year-over-year decrease in its U.S. comparable sales. The number of customers that visited McDonald’s stores during the quarter also fell by 2.6%, according to recent data from Placer.ai.

During an earnings call in May, McDonald’s CEO Chris Kempczinski said the “impact of inflation and heightened anxiety about the economic outlook” harmed sales during the quarter.

“We entered 2025 knowing that it would be a challenging time for the QSR industry due to macroeconomic uncertainty and pressures weighing on the consumer,” said Kempczinski. “During the first quarter, geopolitical tensions added to the economic uncertainty and dampened consumer sentiment more than we expected.”