A high-stakes expansion into Philadelphia is pushing Lancaster County-based Taylor Chip Cookie Co. to reorganize by declaring Chapter 11 bankruptcy.
Taylor Chip, which has locations in Manheim Township and Intercourse, closed its two Philadelphia stores last week and has announced plans to file for Chapter 11.
Doug Taylor, who owns the cookie company with his wife Sara, said that while the Philadelphia venture proved unsustainable, they intend to maintain their retail store and production facility in Lancaster County. The future of their locations in Hershey and York remains under evaluation but the market stand at Harrisburg’s Broad Street Market has also been closed.
Despite the setback, Doug Taylor said he’s still optimistic about the future of the company that the couple began in 2018 in a home kitchen.
After opening a market stand and aggressively promoting their oversized cookies through social media, Taylor Chip experienced rapid growth. Their success earned the couple significant acclaim, culminating in Sara Taylor’s inclusion on the Forbes “30 Under 30” young entrepreneurs list in 2023 when they estimated $4 million in revenue.
“I’m super excited for the future, but we basically didn’t have a future if we were going to keep going the way we were going,” Doug Taylor said. “For the last two years, it seemed like everything that could go wrong did go wrong.”
READ: Taylor Chip drops plans for West Hempfield Twp. creamery, seeks new location
Expansion problems
Doug Taylor said a financial downward spiral began when opening the Philadelphia retail stores in Fishtown and Rittenhouse. Getting the stores open took two years instead of the expected six months. Along the way, costs mounted and the Taylors took on an unspecified amount of debt.
When the Philadelphia stores finally debuted in fall 2024, several other specialty retailers were offering the type of premium cookie that had powered Taylor Chip’s early success. The Philadelphia stores never met revenue expectations, Doug Taylor said. Even with two new stores, Taylor Chip’s companywide revenue was down 6% last year.
As the company was managing the extra costs for its underperforming Philadelphia locations, Doug Taylor said it experienced a hack of its Facebook account that crippled its main method of marketing and led to a decline in sales. As revenue dropped, the Taylors laid off many of their roughly 55 employees, leaving it now with about 25.
Doug Taylor said those laid-off employees were missed over the winter holidays when demand picked up and the smaller staff was unable to fill between 500 to 800 orders, requiring refunds to be issued.
After a slow January, the Taylors realized they had exhausted their options.
“We basically got to the point where we just couldn’t pay our loan,” said Doug Taylor, who declined to specify the amount. “We had emptied out our entire savings, including our home equity line of credit. We did everything we could to keep it going.”
The company opted for Chapter 11 bankruptcy, which allows a business to reorganize its debts and continue operations, rather than a Chapter 7 liquidation. While Doug Taylor declined to estimate the total debt — which will be detailed in an upcoming filing — he remains optimistic about one day turning Taylor Chip into a national brand.
“Every decision you make as a small business with no backers is a decision to bet the farm if you want to grow,” he said. “But if you bet the farm and you plant the crop and it doesn’t rain, well, you’re out of luck. And that’s what happened.”
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