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Astoria-born Chip City announces sudden closure days after former CEO sues
By
Catalina Gonella
Published Oct 3, 2026
Modified Oct 3, 2026
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The company formerly known as Chip City.
By
Catalina Gonella
Published Oct 3, 2026
Modified Oct 3, 2026
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Chip City, the cookie chain born in Astoria, Queens in 2017, announced it has closed all its locations nationwide this week amid a legal dispute with its former CEO and co-founder.
The company, known for its large, gooey cookies and more than 180 rotating flavors,posted about its closure on its website and social media accounts Friday, stating that “despite extensive efforts to stabilize [its] business in the face of significant macro-economic headwinds,” the company “made the very difficult decision to close all of [its] Chip City locations.”
In a Thursday email to employees shared with Gothamist, Chip City President Nicolas Baizan told them all Chip City locations would close permanently at the end of the business day. In the email, Baizan said the company is “still sorting out next steps” but that employees would be paid through Oct. 18, in compliance with Fair Workweek policies.
“I am sorry to share that today will be your last day as a Chip City employee,” Baizan said. “Our industry and business have faced a challenging environment. Consumers are spending less and their preferences are evolving and that has negatively impacted our sales. We made extensive efforts to address these challenges over the course of this year in partnership with our Board and investors. Unfortunately, we no longer have the funding required to operate this business.”
But in a lawsuit filed against Chip City on Sept. 28, the company’s co-founder and former CEO Peter Phillips accuses Chip City of not paying him his severance after he stepped down as CEO in March. According to the suit, which also names investment firm Enlightened Hospitality Investments and executives Baizan and Fred LeFranc, the company began questioning Phillips in May about company expenses from his time as CEO, totaling around $900,000. The lawsuit demands Chip City pay him his remaining salary and benefits.
The company’s shuttering was abrupt — on Thursday, the same day employees received the email, Chip City’s Instagram account had directed customers to head to Chip City on Friday locations to snag a seasonal “Crisp Apple Fritter Cookie,” described as “a cinnamon-spiced sugar cookie packed with glazed donut pieces, topped with apple pie filling and vanilla icing.” Then on Friday morning, NYPD Evidence Collection Team officers were seen surrounding Chip City’s Upper West Side location, local news outlet West Side Rag reported.
Ariel Fybush, 23, had recently been hired for a part-time staff position at a Chip City location in Astoria after being interviewed at the beginning of September, but had yet to be scheduled for her first shift when she received the email that she was no longer an employee.
“Kind of absurd, they already had not been the most organized, and I was trying to not panic about seeing a bunch of red flags,” she said, citing a disorganized group interviewing process and lack of communication about scheduling her first shift. “I guess I should’ve taken those more seriously as red flags… just kind of a waste of time.”
Neither Phillips nor Chip City immediately responded to a request for comment on Saturday morning.
Customers expressed shock at Chip City’s abrupt shuttering on Reddit and social media. Many said they had recently received promotion texts from the company.
Private equity firm Enlightened Hospitality Investments had invested in Chip City since at least 2022, according to a press release at the time, and the company had been rapidly expanding. When Chip City announced Baizan’s promotion to president earlier this year, it said he would “help lead the company's next phase of growth, with a focus on strengthening revenue performance and profitability across its 39 locations.”
By the time Baizan emailed employees Thursday, the company was down to 22 locations, according to the email.
“It’s just disappointing, there’s so many big overexpanded chains already, and I feel like it would be a lot easier to just keep a cookie place just a local cookie place,” Fybush said.
This story has been updated with new information.
Tagged
economy
new york city
queens
Catalina Gonella
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