Chip City is closing all 22 of its remaining stores, ending a run that began nearly a decade ago and peaked at 45 company-operated locations generating more than $35 million in system sales.

Nicolas Baizan, named company president just 10 weeks ago, told employees on Thursday that the New York-based cookie chain would cease operations at the close of business that day. The message, seen by Restaurant Business and also posted on Reddit, blamed deteriorating consumer conditions.

"After almost 10 years of passionately serving our loyal customers, we have decided to cease all store operations," Baizan wrote. "This means our 22 remaining stores will permanently close at the close of business today."

"Our industry and business have faced a challenging environment," he added. "Consumers are spending less and their preferences are evolving and that has negatively impacted our sales."

Company representatives did not respond to multiple requests for comment on Friday.

The shutdown landed just days after co-founder and former CEO Peter Phillips sued the company. That litigation is the latest chapter in a corporate restructuring that began in March, when Danny Meyer's Enlightened Hospitality Investments took a majority stake in Chip City for $4 million. EHI first invested in 2022 and added $7.5 million in 2024, bringing its total commitment to $17.5 million. Under the March recapitalization, Phillips' ownership was cut to 5%, according to documents filed in the lawsuit.

Phillips' suit centers on unpaid compensation. Under his separation terms, he was to stay with the company part-time through early December, collecting a prorated share of his $210,000 base salary — $157,500 for the period — plus health coverage.

He alleges Chip City conditioned that pay on two concessions: surrendering four web domains he personally registered and described in the suit as "valuable," and executing third-party borrower authorization documents on five store-level SBA loans on which he remains personally exposed.

The dispute over the SBA loans carries financial weight. SBA-backed loans protect lenders, not borrowers, and borrowers frequently must post personal collateral. Phillips claims the company asked for his cooperation on the loans without shielding him from personal liability with the SBA. He also alleges the company threatened him with more than $900,000 in counterclaims, which he characterized as "manufactured."

The closure caps a steep contraction. Chip City operated 45 company locations by 2024 and generated more than $35 million in system sales in 2025, according to Technomic. But the chain had been closing units throughout this year and was down to fewer than half its peak count when Baizan sent the announcement.

All of Chip City's locations were company-operated, a structure that concentrated the cost of closures and lease obligations on the recapitalized entity rather than spreading them across franchisees.

Chip City's collapse fits a broader pattern in the cookie segment. Crumbl, the roughly 1,000-unit franchised chain, has closed stores this year as sales have fallen and has laid off workers at its Utah headquarters.

Consumer pullback cited by Baizan mirrors the dynamics in Technomic's Top 500 data, which shows chain restaurant sales slowed again in 2025 as diners cut back, even as coffee, beverages and snacks, and chicken concepts continued to grow. The Phillips lawsuit will now work through the courts against a wind-down entity rather than a going concern.