Krispy Kreme sold $1 million worth of doughnuts in 17 days. | Photo by Jonathan Maze.
Krispy Kreme is not a dull brand. It sells doughnuts, after all, made in shops where customers can watch them being made.
But 2025 in many respects was too exciting, and for many of the wrong reasons. The Charlotte-based chain started the year boasting about the potential of its McDonald’s partnership, only to abruptly pull back within a few months.
The company then created a revitalization plan designed to cut costs and pay down debt, refranchise stores and shift to third-party logistics to deliver its doughnuts. All that hammered the company’s stock, which is down 74% since its 2021 IPO and fell 60% last year alone.
This year will be—hopefully, for Krispy Kreme—a lot calmer. “More boring,” CEO Josh Charlesworth said in an interview. “Krispy Kreme is never that boring. There’s always something to get excited about. But there’s a few things I don’t need help with.”
The company plans to spend the year putting its revitalization plan into place to prove that its pared-down distribution strategy and asset-light model can work.
Krispy Kreme can at least come into the year with something it can hang its hat on: The opening of its restaurant in suburban Minneapolis. The opening broke a record for the chain, with $1 million in sales in its first 17 days. For a chain that has more than its share of massive grand openings, that is an impressive record indeed.
(Check out our report from the grand opening of the Minnesota location.)
The opening was huge for company morale. “It’s great for our people to have a win like that,” Charlesworth said. “I mean, a lot of those people were the same people involved in preparing for the McDonald’s expansion. So for them to be a part of the opening and see the excitement and love for the brand, it really gave my people a real boost, which they needed.”
The collapse of that McDonald’s plan was a problem for the chain, but Charlesworth does say it was not a complete loss.
“We sold a lot of doughnuts, millions of them,” Charlesworths said. “For me, it was a good indication of the power of our brand. There is pull, there is demand out there.”
But, he noted, conditions have to be right for the company’s off-site doughnut sales to succeed.
Krispy Kreme makes its doughnuts at its approximately 360 shops and then delivers them daily to retailers, convenience stores and other locations.
The company believes its doughnuts sell best when they’re properly displayed. At Target locations, for instance, the doughnuts can often be seen prominently near the checkout aisles.
Customers do not go into McDonald’s for doughnuts, however. “We found that people didn’t necessarily appreciate that we were there, and McDonald’s had a lot of other things going on, which is fine,” Charlesworth said. “We just didn’t get the operating model right to be profitable and sustainable.”
There were also some reports of logistics challenges in delivering doughnuts to those locations. One McDonald’s operator told me he once received frozen doughnuts during a cold snap in the winter, for instance.
It’s difficult to appreciate just how much of a shift Krispy Kreme attempted in its plan to handle delivery of doughnuts from its shops to its retailers itself. The company, traditionally a doughnut shop, tried converting itself into a doughnut manufacturing and logistics operation and then had to expand that quickly when it promised McDonald’s it would sell at each of its restaurants.
That stressed the logistics effort and proved to be expensive. The company needed to sell a lot more doughnuts to make that work financially, something it could not do.
Krispy Kreme realized that mistake and started shifting to using third parties last year and plans to complete that by the end of 2026.
“We found that working with third parties who have expertise with fleet management, delivery technology, safety programs and driver training, they can manage the costs a lot better,” Charlesworth said. “I think that we weren’t ready for that as well.”
Krispy Kreme is focusing its doughnut sales on major retailers like Walmart, Costco, Sam’s Club and Target, which will make the logistics operation more predictable. That, plus the outsourced delivery operation, should help the company this year, Charlesworth said.
After that, Krispy Kreme may be ready to reconsider expansion. “I think that now, going forward with a much more predictive logistics operation, we can grow again, because we’ve got spare doughnut making capacity across the country,” Charlesworth said.
That is, if nothing too exciting happens to stop it.
