Krispy Kreme has piloted sending doughnuts to McDonald’s restaurants since late 2022, but the big question is whether the brand would be prepared for a nationwide launch with the burger giant.

Currently, the desserts are in about 160 restaurants in the Louisville and Lexington market, and it’s been that way since March 2023. For perspective, McDonald’s finished last year with 13,457 U.S. locations. Krispy Kreme has kept quiet on next steps, although CEO Josh Charlesworth did tell investors Tuesday that the chain’s existing hub-and-spoke network could cover about 6,000 restaurants.

“Our relationship with McDonald’s remains strong with discussions ongoing about further expansion and we look forward to providing updates on our quick-service restaurant plans through 2024,” the chief executive said during the brand’s Q4 earnings call.

McDonald’s is what Krispy Kreme calls a delivered fresh daily door (DFD). These are grocers, gas stations, convenience stores, pharmacies, and restaurants that receive the chain’s freshly made doughnuts. There were 6,808 DFD doors in the U.S. at the end of 2023, up from 5,729 the year prior. Krispy Kreme views these locations as its core driver of growth.

The doughnut chain is investing in more manufacturing capacity to support its expanding DFD network. Krispy Kreme secured sites in Miami, Minnesota, and Los Angeles, and all of them were second-generation opportunities so that the brand could speed up opening times. Also, underutilized retail doughnut shops are making more than twice the amount they used to.

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However, Charlesworth noted that Krispy Kreme isn’t doing this in preparation for a bigger McDonald’s rollout.

“[The investments are] in broad support of the expansion of DFD overall,” Charlesworth said. “So they’re not dependent specifically, for example, on McDonald’s, but they’re investments that we very much believe make a lot of sense for our business going forward in terms of bringing Krispy Kreme to more people in those new channels.”

In addition to growth, Krispy Kreme is modernizing the way it makes and moves doughnuts. There’s a production line in New York that automatically fills, tops, and packs the desserts. The brand is looking to perfect the system and roll it out in the future. In terms of distribution, the chain started a pilot in Washington, D.C., and L.A. where it’s partnering with a third-party logistics provider but still using dedicated Krispy Kreme trucks and drivers.

“The purpose of that is to work with a third-party provider to see if we can maintain quality and service whilst being able to access new capabilities that they can bring and over time improve our operations and indeed bring more efficiency,” Charlesworth explained. “So it’s an effort end-to-end to continuously improve doughnut making and moving, and we’ll provide updates as we learn more.”

Krispy Kreme’s net revenue grew 11.4 percent to $450.9 million in Q4. Organic revenue lifted 13.2 percent to $446 million. Adjusted EBITDA increased 14.7 percent to $64.1 million, and margins improved 40 basis points to 14.2 percent. Digital sales are becoming a larger portion of success. The ecommerce segment mixed 19.3 percent in 2023, a bump from 18 percent in 2022. The channel grew more than 25 percent in Q4, fueled by new loyalty members, which now totals 15-plus million.

The chain ended 2023 with 14,147 global points of access, defined as all locations where fresh doughnuts or Insomnia Cookies products can be purchased (hot light theater shops, fresh shops, carts and food trucks, DFD doors, and cookie shops). Krispy Kreme opened in Ecuador and France in the fourth quarter to add to Jamaica, Kazakhstan, Switzerland, Chile, and Costa Rica, which were added earlier in 2023. The company expects to launch in three to five new countries in 2024, with several priority markets identified in Europe as well as Brazil where it announced a new partnership with convenience store chain AmPm.

“The number one reason why someone may not buy a Krispy Kreme Doughnut continues to be access and convenience,” Charlesworth said. “With more than two million locations where we could in theory sell Krispy Kreme, at least in the markets we have targeted, the opportunity to expand availability is big.”