New York, New York — Chip City, the viral cookie chain that grew from a Queens storefront into a multi-state dessert brand, has abruptly closed its remaining stores across the United States, leaving customers shocked and employees facing an unexpected final day at work.
The company confirmed the shutdown Friday, saying it had made the “very difficult decision” to close all of its locations after struggling with broader economic pressures.
“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,” the company told in a statement Friday.
“We are grateful to our dedicated employees and loyal customers who have supported us for the past 10 years.”
Employees Were Reportedly Given Little Warning
Chip City had not publicly announced a systemwide closure as of Friday morning. However, a former employee shared what was described as a companywide email sent Thursday evening telling workers that the business would “cease all store operations.”
The email reportedly said the company’s 22 remaining stores would permanently close at the end of the day.
“Our industry and business have faced a challenging environment,” the email said, citing weaker consumer spending and changing preferences. “Unfortunately, we no longer have the funding required to operate this business.”
The former employee also described the workplace as extremely difficult, writing online:
“This was easily the most stressful and unprofessional company I’ve ever worked for,”
The message reportedly informed employees that Thursday would be their final day and that they would be paid through Oct. 18 under Fair Workweek policies.
Customers Discovered Darkened Stores
The sudden shutdown quickly became visible across New York City, where customers began posting videos and photos of darkened Chip City storefronts and sharing information about which locations had closed.
One customer reportedly told neighbors on the Upper East Side:
“All locations shut down with no notice,”
The customer said employees had received an email informing them that it would be their final day.
The abrupt closures left many customers confused because Chip City had continued operating as a recognizable cookie brand, with a large following built around its rotating flavors and oversized desserts.
NYPD Officers Seen at Upper West Side Location
The situation became even more unusual Thursday when NYPD Evidence Collection Team officers were reportedly seen photographing the shuttered Upper West Side location.
A local reporter who posted images from the scene said one man at the location told him:
“please, please don’t talk to the media.”
The reporter said NYPD officers directed him to the department’s public information office, which reportedly had no information connected to the address as of Thursday morning.
It remained unclear why the Evidence Collection Team was at the store or whether its presence had anything to do with the company’s closure.
There was no information establishing a connection between the police activity and Chip City’s shutdown.
Chip City Had Already Been Shrinking
The New York closures followed a series of shutdowns in other states.
Chip City had recently closed all three of its Connecticut locations, while stores in Virginia also reportedly shut down. By late September, the company’s website listed only a limited number of locations in New York, New Jersey and Texas, representing a significant contraction from its earlier expansion.
The company had once been part of a rapidly growing oversized-cookie trend that turned brands such as Crumbl and Last Crumb into social-media sensations.
Founded in Astoria in 2017, Chip City developed a following for its nearly six-ounce cookies featuring crisp edges, soft centers and rotating weekly flavors designed to generate attention online.
Millions Had Been Invested in the Cookie Brand
Chip City’s rapid expansion attracted significant investment from Enlightened Hospitality Investments, the investment firm associated with Danny Meyer.
The company received $17.5 million across two funding rounds—$10 million in 2022 and another $7.5 million in 2024. That funding helped support the chain’s brick-and-mortar expansion as Chip City attempted to build a larger national footprint.
But the company’s rapid growth was followed by increasing financial and internal challenges.
Co-Founder Filed Lawsuit Before Shutdown
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.
The lawsuit alleges a dispute involving Phillips’ compensation, benefits, company web domains and hundreds of thousands of dollars in small-business loans.
Phillips claims he stepped down as CEO in March during a restructuring that left Enlightened Hospitality Investments as the controlling investor. He says he remained in a paid transitional role through December, with $157,500 in salary and family health benefits promised under the agreement.
His attorney said Phillips was shocked by what happened to the company he had helped build.
The September 28 lawsuit alleges that the relationship deteriorated during the summer after Phillips claims Chip City froze his compensation and pressured him to transfer company-related web domains and sign paperwork connected to more than $640,000 in SBA loans he says he personally guaranteed.
Phillips claims the company later terminated him and moved to end his health coverage.
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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 store closures.
Fans Are Left Wondering What Comes Next
The timing of the lawsuit and shutdown has added another layer of uncertainty around a cookie chain that had spent years promoting expansion.
Even as customers shared footage of closed stores, Chip City’s social media accounts continued promoting its weekly cookie lineup to hundreds of thousands of followers.
The sudden closure also leaves hundreds of employees without their jobs, while longtime customers are left wondering whether the brand could eventually return in another form.
For now, however, the once-expanding cookie chain has brought its store operations to an abrupt end.
Were you a Chip City customer, or did you ever try one of its famous oversized cookies? Share your reaction to the sudden shutdown in the comments.
