Chip City Cookies has shut down its remaining 22 stores, ending retail operations for a brand that grew from a small Queens storefront into a multistate chain backed by Danny Meyer’s Enlightened Hospitality Investments.
In an email to employees on October 1, Chip City president Nicolas Baizan said the company could no longer fund its operations.
“After almost 10 years of passionately serving our loyal customers, we have decided to cease all store operations,” Baizan wrote. “This means our 22 remaining stores will permanently close at close of business today. I am sorry to share that today will be your last day as a Chip City employee.”
Baizan cited declining consumer spending and changing preferences as pressures on sales.
“We made extensive efforts to address these challenges over the course of this year in partnership with our Board and investors,” he wrote. “Unfortunately, we no longer have the funding required to operate this business.”
Chip City had 39 locations as of July, when it promoted Baizan to brand president.
The shutdown follows a September 28 lawsuit filed in New York Supreme Court by cofounder and former CEO Peter Phillips against Chip City, two Enlightened Hospitality Investments entities, Baizan, and former interim CEO Fred LeFranc.
According to the complaint, Phillips stepped down as CEO under a March recapitalization agreement that guaranteed nine months of transition compensation and family health coverage through December 2. He alleges the company stopped his pay September 18, then terminated his employment and scheduled cancellation of his benefits after he demanded payment. Phillips also alleges the defendants conditioned restoration of his pay and benefits on transferring four web domains and signing documents related to Small Business Administration loans he personally guaranteed.
Phillips is seeking unpaid compensation, damages, continued health coverage, and legal fees.
The end of store operations marks a reversal from the expansion plans Chip City outlined just over two years ago.
In May 2024, the company announced a $7.5 million Series B investment from Enlightened Hospitality Investments, bringing the firm’s total investment in the brand to $17.5 million. Chip City said the funding would support restaurant openings, employees, services, and brand collaborations. At the time, it reported plans to grow to more than 50 nationwide.
Phillips and cofounder Teddy Gailas started Chip City in Astoria, Queens, in 2017. The concept built its identity around oversized cookies and a rotating menu, using its app and social media to connect with customers and introduce specialty flavors.
