Chip City Closes All Stores Amid Internal Lawsuits

Chip City closed all 20-plus of its cookie stores on Friday, ending operations in New York, Texas, New Jersey, and Virginia. The company attributed the sudden shutdown to significant macroeconomic headwinds.

The closure follows a period of internal conflict and legal disputes. On September 28, co-founder Peter Phillips filed a lawsuit against the company, Enlightened Hospitality Investments, president Nicholas Baizan, and interim CEO Fred LeFranc. Phillips alleges breach of contract and wage theft, claiming his contract was terminated prematurely and his pay was frozen.

In response to these disputes, interim CEO Fred LeFranc had previously questioned Phillips regarding the use of company funds for other restaurant ventures and payments made to an affiliated construction company. Additionally, the New York Police Department is investigating a theft at the chain's Upper West Side location that occurred shortly before the company announced its closure.