Sometimes, that’s just how the cookie crumbles.
Chip City, the New York cookie chain that grew from a single Queens shop into a multi-state dessert brand with millions in backing from Danny Meyer’s investment firm, appears to have suddenly closed locations in New York City and other major markets. The apparent shutdown came only days after co-founder sued the company and its controlling investor.
Social media videos showed dark storefronts and closure notices taped to windows. Customers and people claiming to be employees also described stores shutting down, even though several locations were still marked open on Google and listed on Chip City’s official website.
“All locations shut down with no notice,” one Upper East Side customer wrote in a message to neighbors, saying workers had received an email informing them that Thursday would be their last day.
The situation took another unexpected turn when officers from the NYPD Evidence Collection Team were seen photographing the shuttered Upper West Side store Thursday, according to local reporter Gus Saltonstall, who shared pictures from outside the location.
When the reporter approached the scene, one man reportedly urged him, “please, please don’t talk to the media.”
Saltonstall said officers directed him to the NYPD’s public information office. The office told him it had no information connected to the address as of Thursday morning.
The reason the Evidence Collection Team was present remained unclear, as did whether the officers’ visit had any connection to the store’s closure.
Chip City had not confirmed a companywide shutdown publicly as of Friday morning. However, a former employee shared what appeared to be an internal email sent Thursday night stating that the bakery chain would “cease all store operations” and permanently close its remaining 22 locations at the end of the day.
“This was easily the most stressful and unprofessional company I’ve ever worked for,” the former employee wrote online while posting the message circulated to staff.
The email cited falling consumer spending and shifting customer tastes, saying the broader industry and Chip City’s business had endured a difficult period. “Unfortunately, we no longer have the funding required to operate this business,” it said.
Employees were reportedly told Thursday would be their final day and that they would continue receiving pay through Oct. 18 under Fair Workweek requirements.
The apparent New York shutdown follows a wave of Chip City closures in other states.
The company recently closed all three of its Connecticut shops, while locations in Virginia have also gone dark. By the end of September, Chip City’s website showed only 24 stores across New York, New Jersey and Texas—a steep decline from the chain’s peak expansion.
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Chip City expanded during the oversized-cookie boom that made brands such as Crumbl and Last Crumb social media favorites. The trend turned cookies into a viral dessert phenomenon reminiscent of the cupcake craze associated with Magnolia Bakery, driven by rotating flavors, limited-time releases and oversized treats designed for TikTok and Instagram.
Founded in Astoria in 2017, Chip City built a cult following around their nearly six-ounce cookies with crisp edges, molten centers and a rotating weekly menu.
Its rapid growth attracted $17.5 million from Danny Meyer’s Enlightened Hospitality Investments in two rounds — $10 million in 2022, followed by another $7.5 million in 2024 to fuel further brick-and-mortar expansion.
But as stores began disappearing this fall, internal turmoil was baking.
Just days before the latest closures, Chip City co-founder and former CEO Peter Phillips filed a lawsuit in New York Supreme Court against the company, Enlightened Hospitality Investments and executives Nicolas Baizan and Fred LeFranc, alleging a bitter dispute over his compensation, benefits, company web domains and hundreds of thousands of dollars in small-business loans.
Phillips claims he stepped down as CEO in March as part of a restructuring that left Enlightened Hospitality Investments as Chip City’s controlling investor. He remained in an agreed paid transitional role through December, with $157,500 in salary and family health benefits promised under the deal.
“Although our client has not been part of ownership for some time, he is shocked at what happened to a company that he and his friend had put together,” Phillips’ attorney, Israel Klein, Pardalis & Nohavicka, told The Post.
The September 28 lawsuit alleges the relationship between the parties became tumultuous over the summer, when Phillip claims Chip City froze his pay while pressuring him to hand over company-related web domains and sign paperwork tied to more than $640,000 in SBA loans he says he still personally guaranteed.
After he demanded payment, Phillips says the company terminated him and moved to cut off his health coverage.
The lawsuit accuses Chip City and the other defendants of breach of contract, unlawful wage withholding, retaliation, and other violations. Phillips is seeking unpaid compensation, damages, and other relief.
The defendants have not yet responded to the allegations in court, and the lawsuit does not establish that the dispute caused the recent store closures.
Still, the timing adds another layer of uncertainty around a company that, until recently, was touting aggressive growth.
Even as customers posted videos of closed locations, Chip City’s social media continued promoting its weekly lineup of cookies to more than 300,000 Instagram followers. It is unclear how operations will continue to persist at this time.
With the closure come hundreds of employees now out of work.
