In a surprising turn of events, Krispy Kreme has decided to pause its ambitious plans to expand doughnut sales within McDonald's locations across the nation.

On Thursday, the beloved doughnut chain announced it is reevaluating its rollout strategy as it seeks to forge a profitable path for both brands. Currently, Krispy Kreme has its sweet treats available in over 2,400 McDonald’s outlets but does not anticipate adding more restaurants by mid-2025.

CEO Josh Charlesworth shared during the latest earnings call, "I still believe in the long-term potential of this partnership, but we must collaborate more closely with McDonald’s to enhance sales and streamline operations." He emphasized that only once they establish a stable and profitable model will they consider expanding further.

After an initial launch that failed to meet expectations, both companies find themselves revisiting strategies, with Charlesworth admitting a drop in demand required decisive action.

Initially announced in March 2024, the partnership aimed for a nationwide rollout of Krispy Kreme doughnuts at all McDonald’s restaurants by the end of 2026. Charlesworth previously touted that this initiative would double their distribution points, dramatically increasing consumer accessibility to their products.

However, the doughnut giant has also rescinded its full-year forecast due to increasing economic pressures and uncertainties surrounding the McDonald’s deployment timeline.

The current economic turmoil is affecting fast-food sales overall, with McDonald's reporting a significant 3.6% decline in same-store sales during the first quarter—the steepest drop since the pandemic. The trend reflects broader warnings from other restaurant chains, such as Domino's, Chipotle, and Starbucks, indicating that consumers are tightening their dining-out budgets in the face of rising inflation and a shaky economic outlook.