Danny Meyer's Enlightened Hospitality Investments announced Thursday that it's providing $10 million in growth capital to Chip City Cookies, an emerging gourmet brand in New York City.
The concept, founded in 2017 by childhood friends Peter Phillips and Teddy Gailas, has 14 locations across Manhattan, Brooklyn, Queens, and Long Island, and there are plans to enter out-of-state markets, like New Jersey and Florida. The company said Enlightened Hospitality's funds will not only help with brick-and-mortar expansion, it will also strengthen its nationwide shipping business with Uber Eats.
Chip City offers a lineup of cookies that switches on a weekly basis. Some of the classic flavors include blueberry cheesecake, funfetti, cookies n' cream, s'mores, oatmeal apple pie, and lemon berry. More than 40 types rotate over a year.
“This is another incredible validator for the brand and the business mission we have—to make communities smile through the quality of our products and to make our employees feel purpose in their communities,” Phillips said in a statement.
In addition to financial resources, Enlightened Hospitality said it will give Chip City "deep expertise in fast casual retail operations and an unparalleled focus on hospitality and people." The investment fund gives guidance in concert with Union Square Hospitality Group, which is responsible for Shake Shack, Union Square Cafe, and Gramercy Tavern.
Some of Enlightened Hospitality's other concepts include Tacombi, Dig, Slutty Vegan, Joe Coffee Company, Salt & Straw, and Goldbelly. The growth fund eyes investments of $10 million to $25 million that are flexible, non-control, and geared toward long-term growth, according to its website.
“At EHI, we are always looking for businesses that have created craveable products and have earned a tribe-like following. Chip City checks both of those boxes in a significant way,” Meyer, a cofounder and managing partner of EHI, said in a statement. “Beyond the cookies, which speak for themselves, we are excited to support the growth aspirations of the passionate team behind Chip City, who exemplify our values of hospitality and community.”
The Chip City investment is the latest sign of significant growth in the gourmet cookie segment. At the top is Crumbl Cookies, a surging franchise that's surpassed 500 locations nationwide in just five years. Cookie Plug, a Southern California-based brand with about two dozen units, announced its franchising opportunity in August and named industry veteran Chris Wyland CEO. There's also Chip Cookies, a Utah-headquartered concept that revealed a nationwide expansion plan two months ago, with dreams of 500 stores in the U.S. in the next five years. And this past spring, FAT Brands announced the purchase of Nestlé Toll House Café by Chip; the plan is to convert 85 stores into Great American Cookies, which already has around 350 locations.