• by Tanya Gazdik , 7 hours ago

McDonald’s and Krispy Kreme are ending their partnership effective July 2. 

“Earlier this year, the fast food giant began offering three types of Krispy Kreme treats at around 2,400 McDonald's locations, including Original Glazed Doughnuts, Chocolate Iced with Sprinkles Doughnuts and Chocolate Iced Kreme Filled Doughnuts,” according to USA Today.

Efforts to bring costs in line with unit demand were unsuccessful, making the partnership unsustainable, according to Krispy Kreme CEO Josh Charlesworth.

“The companies said the deal has not been as profitable as expected for the doughnut chain,” according to CNBC. “McDonald’s at one point planned to roll out Krispy Kreme doughnuts nationwide by next year.”

Krispy Kreme paused the planned nationwide rollout in early May, saying it was "reassessing the deployment schedule together with McDonald’s while it works to achieve a profitable business model for all parties,” according to Fox Business News. Charlesworth said during an earnings call that demand dropped below expectations after the initial launch, "requiring intervention."

Both QSRs have new goals in mind. 

Krispy Kreme said it will now focus on expansion through “high-volume retail points of distribution” and international franchise growth while McDonald's focuses on building the success of its breakfast business.

“Both food businesses have struggled lately to different degrees,” according to NBC News. “McDonald's has had trouble luring back customers despite various value offerings as inflation continues to take a toll on low- and middle-income consumers. Krispy Kreme, long a cult favorite, has posted millions of dollars in losses. McDonald's stock is down slightly so far this year; Krispy Kreme's has fallen more than 73%.”