Chip City closes remaining cookie shops, including 5 on Long Island
The Garden City location of Chip City, seen Friday, is one of five Long Island locations closing down. Credit: Rick Kopstein
Viral cookie chain Chip City has closed its remaining shops, including five on Long Island, due to economic pressures, the chain announced Friday.
The shutdowns come days after a Chip City co-founder sued the company over an alleged breach of contract.
The chain is known for its warm, oversized cookies with gooey fillings, and had 186 classic flavors that rotated weekly.
That has come to an end.
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- Viral cookie chain Chip City has closed its remaining shops, including five on Long Island, due to economic pressures, the chain announced Friday.
- As of April 2025, the Queens-based chain had more than 50 cookie shops in nine states, but only 24 locations were listed on its website Friday afternoon.
- The shutdowns come days after a Chip City co-founder sued the company over an alleged breach of contract.
"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 College Point, Queens-based company said in a statement Friday afternoon. "We are grateful to our dedicated employees and loyal customers who have supported us for the past 10 years."
Chip City did not immediately respond to an inquiry about the number of employees being affected by the shutdowns.
On Friday afternoon, no one answered the phones at the five Long Island locations listed on the company's website — in East Northport, Garden City, Merrick, North Babylon and Woodbury.
Chip City also used to have Long Island shops in Oceanside and Huntington.
Childhood friends Theodore Gailas and Peter Phillips founded Chip City in Astoria, Queens, in July 2017. They opened Chip City's first Long Island shop in 2022 at the Brooke Plaza shopping center in Oceanside.
Chip City had more than 50 stores across nine states as of April 2025, according to an article published that month by Square, a point-of-sale system owned by Block Inc. in Oakland, California.
Chip City has been closing locations for months, including three in Connecticut and three in Virginia in September.
As of Friday afternoon, the chain's website listed 24 shops in New York City, Long Island, Texas and New Jersey.
Chip City isn't the only cookie seller to run into challenges. The largest cookie chain in the country, Crumbl, has closed about 40 shops so far this year, leaving the chain with just under 1,100 locations across the United States, Puerto Rico, Canada and Mexico.
"Chain cookie concepts have hit a rough patch after exploding in popularity coming out of the [COVID-19] pandemic, which I attribute mostly to consumers cooling on the fad, as well as an oversaturation in locations," said Kevin Schimpf, senior director of industry research at Technomic, a Chicago-based restaurant industry research firm.
Lawsuit alleges breach of contract
Chip City's shutdown announcement comes four days after Phillips sued PPTG Holdings LLC, which does business as Chip City, as well as two executives for alleged breach of contract, wage theft and unlawful retaliation.
He also sued Enlightened Hospitality Investments, which acquired a controlling stake in Chip City in March.
As part of a restructuring agreement, Phillips allegedly agreed to step down as CEO and transition into an administrative consultant role for a nine-month period that was to end Dec. 2, according to the lawsuit, which was filed in the Supreme Court of the State of New York on Monday.
Phillips' complaint alleges that he was supposed to be paid a prorated salary of $157,500 and receive full family health and welfare insurance coverage.
He fulfilled his duties, but the defendants cut off his direct deposit payroll Sept. 18, the complaint alleges. After Phillips served a formal notice of material breach and wage demand Sept. 21, the defendants retaliated by submitting a job termination entry into the company's payroll system, canceling his job status and scheduling the termination of his family's health insurance coverage, the complaint claims.
The defendants agreed to restore Phillips' wages and benefits if he would agree to take two actions, one of which would be to give up four personally registered web domains — chipcitycookies.com, chipnewyorkcity.com, chipnewyorkcity.info and chipcity.com, Phillips' complaint claims.
The defendants allegedly also wanted him to sign third-party borrower authorization documents on five store-level Small Business Administration loans, for which he was personally exposed as a guarantor.
The defendants also allegedly threatened Phillips with more than $900,000 in counterclaims.
Chip City and Enlightened Hospitality Investments did not immediately respond to requests for comment about the lawsuit.
Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.
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