Chip City, the viral New York cookie chain, abruptly closed all of its stores across the U.S. on Friday, ending a decade-long run that turned a Queens corner shop into a multi-state cookie empire. The shutdown came with no public warning: employees learned Thursday evening via an internal email that the company would "cease all store operations" — just days after its co-founder sued the company and its controlling investor.
According to an internal email obtained by the New York Post, Chip City told staff Thursday evening that its 22 remaining stores would close permanently at the end of the day. The email cited "a challenging environment" — weaker consumer spending and changing preferences — and said, "we no longer have the funding required to operate this business."
In a statement Friday afternoon, the company said that "despite extensive efforts to stabilize our business in the face of significant macro-economic headwinds, we have made the very difficult decision to close all of our Chip City locations," thanking employees and loyal customers "who have supported us for the past 10 years."
Chip City was founded in 2017 in Astoria, Queens, by childhood friends Peter Phillips and Teddy Gailas. Its oversized, "ooey-gooey" cookies and a rotating menu that cycled through more than 180 flavors made it a breakout star of the late-2010s wave of single-item specialty dessert chains built on social-media aesthetics.
In 2022, Enlightened Hospitality Investments — a growth equity fund affiliated with restaurateur Danny Meyer's Union Square Hospitality Group — injected $10 million into the business, when the chain operated just 14 locations, to fund expansion beyond the Northeast corridor. In June, Chip City said it had 39 locations across New York, New Jersey, Connecticut, Massachusetts, Virginia, and Texas. But the retreat had already begun in the weeks before Friday's announcement: three Connecticut locations closed, followed by three stores in Northern Virginia, including Tysons Corner.
The collapse is entangled with a legal fight. On September 28, co-founder Phillips sued Chip City, alleging the company withheld compensation and benefits owed to him after his departure as CEO in March. The lawsuit also names Enlightened Hospitality Investments, current president Nicolas Baizan, and executive Fred LeFranc as defendants. None of the claims have been proven in court.
Enlightened Hospitality Investments took a majority stake in March 2026. The suit claims the new majority owners pressured Phillips to surrender web domains and sign third-party borrower authorization documents on five small-business loans.
TheStreet reported that on the morning of October 2, officers from the NYPD Evidence Collection Team were seen photographing inside Chip City's Upper West Side shop at 370 Columbus Avenue. The reason is unclear.
For customers, the most immediate loss may be gift cards: as stores closed earlier in the month, Chip City had told shoppers that prepaid cards could be used at other locations through October. With every store now dark overnight, those cards are most likely worthless.