Next month, Krispy Kreme and McDonald’s will no longer collaborate on doughnuts

McDonald’s and Krispy Kreme are permanently terminating their collaboration.

The firms announced in a news release on Tuesday that the brand will cease selling its doughnuts at McDonald’s outlets on July 2. While the partnership was going well for the burger giant and its franchisees, it «needed to be a profitable business model for Krispy Kreme as well,» according to Alyssa Buetikofer, Chief Marketing and Customer Experience Officer at McDonald’s USA.

Due to their agreement, 2,400 McDonald’s restaurants now serve Krispy Kreme doughnuts. Following a slowdown in sales, the companies suspended their collaboration in May.

Krispy Kreme also retracted its full-year financial estimate, citing economic «softness» as a contributing factor. Following their announcement last year that Krispy Kreme doughnuts would be available at McDonald’s restaurants across the country by 2026, the chains are ending the agreement.

According to Krispy Kreme, the company will now concentrate on growth through worldwide franchise expansion and «high-volume retail points of distribution.» Additionally, according to the corporations, the deal only covered a «small, non-material» portion of McDonald’s breakfast business.

This year, Krispy Kreme’s stock has fallen almost 73%. The business reported a loss of almost $33 million in its first quarter.