Krispy Kreme Re-evaluates McDonald’s Partnership Rollout Amid Revenue Dip

Krispy Kreme, the iconic purveyor of delectable doughnuts, is taking a step back to re-evaluate its highly anticipated partnership with McDonald’s. While the collaboration remains intact, the company announced a pause in its phased market rollout, signaling a strategic reassessment of its deployment schedule with the fast-food giant. This decision comes after Krispy Kreme reported a notable decline in net revenue, primarily attributed to the sale of a majority stake in Insomnia Cookies.

The doughnut company revealed in its May 8 quarterly earnings report that it would be temporarily halting the expansion of Krispy Kreme doughnuts to McDonald’s restaurants across the nation. As of March 30, 2025, Krispy Kreme doughnuts were available for purchase at over 2,400 McDonald’s restaurants, primarily concentrated in Indiana and Kentucky. The initial plan envisioned nationwide availability at participating McDonald’s locations by the end of 2026.

However, Krispy Kreme is now reassessing the deployment schedule in conjunction with McDonald’s. The primary objective is to ensure a profitable business model that benefits both parties involved. Consequently, Krispy Kreme does not anticipate launching its doughnuts in any additional restaurants during the second quarter of 2025.

In a recent news release, Krispy Kreme emphasized its continued belief in the long-term potential of profitable growth through U.S. nationwide expansion, including its collaboration with McDonald’s. The company remains committed to exploring opportunities to optimize the partnership and deliver value to both consumers and shareholders.

The rationale behind Krispy Kreme’s partnership with McDonald’s was to enhance the accessibility of its beloved doughnuts. By making them available at McDonald’s locations, customers who may not have convenient access to Krispy Kreme stores would be able to indulge in their favorite treats.

Under the proposed arrangement, three of Krispy Kreme’s most popular doughnut varieties—the Original Glazed Doughnut, the Chocolate Iced with Sprinkles Doughnut, and the Chocolate Iced Kreme Filled Doughnut—would be delivered fresh to participating McDonald’s restaurants daily. These doughnuts would be available for purchase individually or in boxes of six, catering to both individual cravings and group indulgences, starting at breakfast and lasting throughout the day.

Josh Charlesworth, President and CEO of Krispy Kreme, expressed enthusiasm about the partnership in a March 2024 news release. He stated that collaborating with McDonald’s on a national scale would provide fans and doughnut enthusiasts with unprecedented daily access to fresh doughnuts and the joy that is synonymous with the Krispy Kreme brand.

The decision to offer select Krispy Kreme products at McDonald’s restaurants nationwide was prompted by a highly successful test run at 160 McDonald’s restaurants in Lexington and Louisville. During this pilot program, consumer excitement and demand for Krispy Kreme doughnuts far exceeded expectations, demonstrating the strong appeal of the brand within the McDonald’s customer base.

These pilot restaurants have continued to serve Krispy Kreme doughnuts since the conclusion of the test phase and will continue to do so even amidst the pause in the nationwide rollout. A comprehensive list of participating McDonald’s locations that currently offer Krispy Kreme doughnuts is readily available for consumers seeking to satisfy their doughnut cravings.

The financial backdrop to this strategic reassessment is a notable decline in Krispy Kreme’s net revenue. The company reported a decrease of $59.4 million (20.1%) in its most recent quarterly earnings, primarily attributable to a $64.3 million reduction associated with the sale of a majority stake in Insomnia Cookies. While the Insomnia Cookies divestiture was intended to streamline Krispy Kreme’s operations and focus on its core doughnut business, it has had a short-term impact on the company’s overall revenue.

The pause in the McDonald’s rollout provides Krispy Kreme with an opportunity to carefully analyze the financial implications of the partnership, refine its operational strategies, and ensure that the long-term benefits outweigh the initial investment. The company will be working closely with McDonald’s to identify areas for improvement and optimize the business model to maximize profitability for both parties.

The reassessment process will likely involve a thorough review of various factors, including supply chain logistics, pricing strategies, marketing campaigns, and overall operational efficiency. Krispy Kreme will also be closely monitoring consumer feedback and sales data from the existing McDonald’s locations that offer its doughnuts to gain valuable insights into customer preferences and demand patterns.

While the pause in the rollout may be disappointing to some consumers who were eagerly anticipating the availability of Krispy Kreme doughnuts at their local McDonald’s restaurants, it reflects a prudent and strategic approach by Krispy Kreme to ensure the long-term success of the partnership. By taking the time to carefully evaluate the business model and optimize its operations, Krispy Kreme aims to create a sustainable and profitable collaboration that will ultimately benefit both the company and its customers.

The future of the Krispy Kreme and McDonald’s partnership remains promising, despite the current pause in the rollout. The strong consumer demand demonstrated during the pilot program, coupled with Krispy Kreme’s unwavering commitment to the collaboration, suggests that the partnership will eventually expand to additional McDonald’s locations across the country.

As Krispy Kreme works diligently to reassess its deployment schedule and refine its business model, consumers can continue to enjoy Krispy Kreme doughnuts at the existing participating McDonald’s restaurants and at Krispy Kreme stores nationwide. The company remains dedicated to delivering its signature doughnuts and unparalleled customer experience to its loyal fans, while also exploring new and innovative ways to expand its reach and delight doughnut lovers across the country. The strategic pause is a testament to a commitment to long-term success and a profitable partnership with McDonald’s, ensuring a sweet future for both companies and their customers. The focus remains on a thoughtful and financially sound expansion, setting the stage for a stronger and more sustainable collaboration.