Chip City Cookies has abruptly shut down its remaining storefronts nationwide, citing severe economic headwinds just days after its former CEO filed a lawsuit over unpaid severance and amid a police investigation into a burglary at one of its Manhattan locations.
After operating in the gourmet bakery sector for a decade, Chip City ordered employees to permanently close all remaining locations at the end of the business day on Thursday amNewYork. The company posted an abrupt notice on its website and social media channels on Friday morning confirming the nationwide shutdown Usatoday. Established back in 2017, the bakery swiftly grew throughout New York and established branches spanning the East Coast from Florida up to Boston.
“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.”
Chip City management, via company statement and website
From Astoria Bakery to a Multi-State Footprint Backed by Danny Meyer’s Fund
Founded in Astoria, Queens, in July 2017 by childhood friends Peter Phillips and Teddy Gailas, the brand built a loyal following through its oversized cookies and rotating lineup of flavors amNewYork. Chip City was known for its rotating flavors. Among the final items on the end-of-September menu were a Caramel Apple Cider Donut cookie and a Galaxy Brownie, which served as the chain’s last-ever releases.
The bakery’s rapid expansion caught the eye of Enlightened Hospitality Investments, a growth equity fund affiliated with restaurateur Danny Meyer’s Union Square Hospitality Group Foxbusiness. EHI injected $10 million into the chain in 2022 to accelerate its growth Nrn, following up with another $7.5 million in 2024 to bring its total investment to $17.5 million Nrn. By 2024, the chain had reached 45 company-run locations, and Technomic data showed system sales topping $35 million in 2025 Nrn. Yet the expansion proved difficult to sustain. The business had already been scaling back its footprint, closing all of its stores in Connecticut and Virginia before pulling the plug on its remaining operations in New York, New Jersey, and Texas Queens Daily Eagle, Coinpaper.
Peter Phillips Sues Over Severance and Scrutinized Expenses
The sudden collapse unfolded alongside a messy courtroom battle Queens Daily Eagle. On September 28, co-founder and former CEO Peter Phillips filed a lawsuit in New York naming Chip City, Enlightened Hospitality Investments, and company executives Nicolas Baizan and Fred LeFranc Gothamist. According to the legal complaint, Phillips had been guaranteed his standard salary for a nine-month transition after leaving his role as CEO in March, but payments ceased halfway through September.
According to the lawsuit, Phillips stepped down as CEO in March during a recapitalization Nrn.
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Tensions flared in May when then-interim CEO Fred LeFranc sent a letter questioning roughly $900,000 in expenditures from Phillips’ tenure, including flagged rent overpayments amNewYork, Gothamist. The letter also highlighted alleged overpayments for rent at the Astoria storefront and unexplained rent payments made to a personal bank account belonging to Dion Vangelatos, the company’s former chief financial officer who departed a few months prior to Phillips. The lawsuit claims that the company cut off his payroll on September 18, demanding control of four web domains and his signature on Small Business Administration loan authorization documents where he remained personally exposed Queens Daily Eagle, Nrn.
Employees Left Jobless as Police Investigate an Upper West Side Burglary
The closure caught hundreds of workers off guard NBC 4 New York. Employees received notice of the permanent shutdown via internal emails on Thursday evening, leaving staff across New York, New Jersey, and Texas without jobs amNewYork. Some staff had been hired days prior, including a worker in Astoria who had completed an interview at the start of September but received her termination email before working a single shift Gothamist.
Adding to the sudden turmoil, officers from the NYPD Evidence Collection Team responded to the shuttered store at 370 Columbus Avenue on the Upper West Side on Friday morning West Side Rag. Police stated that security footage captured two individuals entering the location at approximately 2:30 a.m. on Friday and removing an unknown amount of cash amNewYork. Investigators confirmed there was no immediate connection between the overnight burglary and the chain’s permanent nationwide closure West Side Rag.