NEW YORK: McDonald’s Corp and Krispy Kreme Inc are ending their partnership after a little more than a year, with the doughnut chain citing cost issues.
The tie-up, announced in March 2024, aimed to sell Krispy Kreme doughnuts in McDonald’s locations.
Krispy Kreme said the deal would more than double its distribution by the end of 2026.
“Our two companies partnered very closely, each supporting execution, marketing, and training, delivering a great consumer experience in approximately 2,400 McDonald’s restaurants,” Josh Charlesworth, Krispy Kreme’s chief executive officer, said in a statement.
“Ultimately, efforts to bring our costs in line with unit demand were unsuccessful, making the partnership unsustainable for us.”
McDonald’s and Krispy Kreme both declined to comment beyond their joint press release.
Shares of Krispy Kreme fell 2.2%, while McDonald’s stock was little changed. In trading this year through Monday’s close, Krispy Kreme fell 74% and McDonald’s declined less than 1%.
Krispy Kreme’s stock surged last year when the deal was announced. But in May, the company paused the expansion into McDonald’s locations.
“We know hindsight is 20/20 but it now seems that the decision to go from a one-state test to a national rollout, versus a regional rollout, was a mistake,” wrote Truist analyst Bill Chappell in a note. — Bloomberg
