Beloved cookie company files for bankruptcy years after explosive growth

Taylor Chip, a once-fast-growing Pennsylvania company that began as a couple’s pursuit of baking perfect chocolate chip cookies, is now facing significant financial pressure as it reorganizes, newly released bankruptcy filings reveal.

Documents released this week showed the company was saddled with more than $2.5 million in debt and had reported assets of just $400,000, according to WHP.

Customers compare Taylor Chip to national phenomenon Crumbl Cookies because they have similar oversized, gooey cookies and come in unique flavors like lava cake and salted caramel pretzels.

Owners Sara and Doug Taylor opened the first store in August 2018 for the Lancaster County-based company, known for its oversized cookies and rapid expansion into new markets like Philadelphia. But delays and rising costs later led to its financial woes.

Taylor Chip announced earlier this month that it would seek protection under Chapter 11 of the U.S. Bankruptcy Code and close two of its Philadelphia plants as part of efforts to stabilize operations. The founders said in a statement that the move was intended to give the company a chance to survive and rebuild.

“Chapter 11 is often misunderstood. It does not mean we are leaving. It means we are restructuring so the business can survive and thrive,” they posted on social media last week. “We had to make the difficult decision to close our stores in order to have the opportunity to build our future. This decision was not easy, but it was necessary.”

Taylor Chip owner told independent The company received a 7A loan through NewTek Bank and the U.S. Small Business Administration (SBA) with a balance of $1.8 million.

An SBA spokesperson told independent In a statement: “The SBA maintains a strict privacy policy and does not disclose information about loans to specific individuals or businesses. This includes details related to programs such as the PPP, COVID EIDL, or any other SBA-administered assistance.”

Taylor Chip stores in Manheim Township, Gordonville, Hershey and York, Pa., will remain open, the store owners said. The couple said they would refocus Taylor Chip on its roots by prioritizing rural areas, expanding online sales and building the future of the brand, including its range of nutritional supplements.

“Building something from scratch means taking risks, and not every bet will pay off the way you expected,” Doug Taylor said in a statement. “We’re proud of what we’ve built in Philadelphia, even though it hasn’t worked out the way we hoped. This decision allows us to protect the core of the brand, take care of our team, and continue building for the long term. If you’re in the middle of a tough chapter, keep moving forward, it won’t define you and that’s rarely the end of the story.”

Earlier this month, the Taylors pointed to significant approval delays in Philadelphia as a major factor in the company’s financial troubles.

After the lease was signed in late 2022, the opening of the Philadelphia stores was originally expected to take six months, but has now been extended to nearly two years, resulting in the stores being unable to generate revenue while expenses continue to increase.

Without outside investors, the Taylors said they relied on creative financing to stay afloat, but the Philadelphia plant ultimately failed to generate enough revenue to pay off the debt incurred during the long delays.

“Like many businesses in our community, Taylor Chip started small. With no investors. Just a maxed-out credit card, a passion for making desserts with better ingredients, and a community that was looking for the same thing,” the Taylors said in a social media post last week. “As we grew, we took bigger risks. Some worked and some didn’t. That’s part of building a business.”

Editor’s note: An earlier version of this article referred to Paycheck Protection Program loans, which are not part of the company’s outstanding liabilities.