Krispy Kreme is pulling out of its partnership with McDonald’s, effective July 2. The decision follows an evaluation period after the two companies launched their collaboration in 2022. The venture, which began with a pilot in Louisville, Kentucky, was intended to expand Krispy Kreme’s footprint through McDonald’s breakfast menu, but failed to meet the expected demand and cost-efficiency.
The donut chain found the business model unsustainable due to challenges aligning costs with customer demand. Despite strong initial collaboration and product quality, Krispy Kreme has shifted its focus back to more profitable avenues, including US retail growth and international franchises. Meanwhile, McDonald’s downplayed the financial impact, describing the partnership as a minor element of its broader breakfast strategy.
This development follows a dip in sales and a federal class-action lawsuit claiming Krispy Kreme misled investors about the success of the venture, contributing to stock losses. While McDonald’s remains committed to its breakfast business, the Krispy Kreme collaboration will no longer be part of its menu offering.