Chip City has closed all its locations, ending the New York City-born cookie chain’s operations just one day after it urged customers to set their alarms for the launch of a new autumn flavour.
The company said on Friday that all 22 remaining shops in Manhattan, New Jersey and Texas had shut immediately, citing “significant macro-economic headwinds” and a lack of funding.
“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 said in a statement.
It added: “We are grateful to our dedicated employees and loyal customers who have supported us for the past 10 years.”
The abrupt announcement came shortly after Chip City promoted its Crisp Apple Fritter cookie, made with a cinnamon-spiced sugar cookie, glazed doughnut pieces, apple pie filling and vanilla icing.
A video showed the freshly baked cookie being broken open to reveal its filling. Customers had been told to “Set your alarms for Friday, October 2nd” and to order before the product was gone.
Employees were informed in an email from company president Nicolas Baizan that the shops would close at the end of the day and that it would be their final day of employment.
“I have some difficult news about Chip City’s future. After almost 10 years of passionately serving our loyal customers, we have decided to cease all store operations,” Mr Baizan wrote.
He said the chain had been operating in a “challenging environment”, with customers “spending less” as their preferences changed. The company had made “extensive efforts” over the previous year to address its problems with the help of its board and investors, he said.
“Unfortunately, we no longer have the funding required to operate this business,” Mr Baizan added.
The president was appointed to the role only 10 weeks before the closure announcement. The decision prompted confusion and anger online, with customers and former staff questioning the way the shutdown had been handled.
One customer said the chain had been due to provide wedding favours the following month. Another person who said they had been hired about a month earlier claimed they had been waiting to begin training before receiving the closure email.
The announcement also followed a lawsuit brought by Chip City co-founder and former chief executive Peter Phillips.
In a motion filed on September 28, Mr Phillips accused Chip City, investor Enlightened Hospitality Investments and Mr Baizan of “bad-faith self-dealing”. The allegations include breach of contract, wage theft, unlawful retaliation and other claims linked to a corporate restructuring on March 2, 2026.
Mr Phillips alleged that an agreement covering his departure as chief executive entitled him to $157,500 in prorated salary and continued health insurance during a transition period.
He claimed Chip City required him to surrender four web domains he had personally registered in order to receive his pay. He also alleged that the company sought signed documents connected to five Small Business Administration-backed loans worth more than $640,000, for which he said he was a guarantor.
According to the allegations, the company threatened more than $900,000 in counterclaims, which Mr Phillips described as “manufactured”. He further claimed that his payroll was stopped on September 18, 2026, after which the company ended his employment status and sought to revoke health insurance for his family.
Mr Phillips also accused the defendants of breaching their fiduciary obligations and violating the Employee Retirement Income Security Act. The claims have not been established in court.
Chip City had grown to 45 company-owned shops by 2024 and recorded more than $35 million in system sales the following year. The chain had since been shrinking, closing stores during 2026 and leaving fewer than half of those locations operating before the final shutdown.
