Full Breakdown
Chip City Cookies Closes All Stores Amid Legal Dispute and Economic Headwinds
By Drooid · · How we work
Immediate Closure of Remaining Stores
On October 2, Chip City announced that its remaining 22 locations would close at the close of business that day. The notice came via an internal email from company president Nicolas Baizan, appointed ten weeks earlier. Employees were told that October 1 would be their final workday and that they would be paid through October 18 under Fair Workweek policies.
Background and Legal Conflict
Chip City was founded in Astoria, Queens, in July 2017 by childhood friends Peter Phillips and Theodore “Teddy” Gailas. The brand grew to 45 locations by 2024, generating more than $35 million in system sales that year. Growth was funded by two equity injections from Enlightened Hospitality Investments (EHI), the investment arm of restaurateur Danny Meyer: $10 million in 2022 and $7.5 million in 2024.
On September 28, Phillips filed a lawsuit in New York Supreme Court against Chip City, EHI, Baizan, and former interim CEO Fred LeFranc. The complaint alleges that after Phillips stepped down as CEO on March 2, 2026, the company froze his $157,500 transition salary, terminated his health benefits, and pressured him to surrender four personally-registered web domains and to sign borrower-authorization documents for five SBA loans totaling more than $640,000 that he claimed to have personally guaranteed. The suit also cites “manufactured” counterclaims for over $900,000 in pre-closing expenses.
Financial and Operational Data
- Peak footprint: 45 stores (2024) – ? 50 stores reported in some 2025 filings.
- Stores listed on the website just before closure: 24 locations in New York, New Jersey and Texas.
- Remaining stores at shutdown: 22 (per Baizan’s email).
- Total private-equity investment: $17.5 million (EHI).
- 2025 system sales: > $35 million (Technomic).
Official Statements & Responses
President Nicolas Baizan reiterated in the employee memo that reduced consumer spending and evolving preferences were the primary drivers of the shutdown.
On-the-Ground Reports
The Upper West Side store at 370 Columbus Ave. was surrounded by officers from the NYPD Evidence Collection Team on the morning of October 2. A bystander said the officers were photographing the storefront and interior, and a man on a bike asked reporters not to speak to the media. The NYPD later said the presence was unrelated to a burglary at the same location, in which an “unknown amount of U.S. currency” was taken early that morning. Employees confirmed that their final day of work was October 1 and that they would receive pay through October 18 under applicable labor regulations.
Conflicting Reports & Gaps
Sources differ on the exact number of stores operating at the time of closure: the internal email cites 22 locations, while the company website and several news outlets listed 24. No source has provided a detailed breakdown of the chain’s financial condition beyond the cited macro-economic challenges, leaving the extent to which the lawsuit influenced the shutdown unclear. Defendants have not publicly responded, and the court filings do not establish a causal link between the legal dispute and the abrupt closures.
Verbatim Quote
- “After almost 10 years of passionately serving our loyal customers, we have decided to cease all store operations,” — Nicolas Baizan, company president