Line an 8 by 8 inch pan with aluminum foil, set next to your stove top.
Set out your peppermint and measuring spoon, your red food coloring, and your measured peppermint chips, and a butter knife next to the pan.
Over medium low heat, combine the white chocolate chips and the sweetened condensed milk until smooth. Remove from the heat.
Working quickly, pour the peppermint extract into the fudge mix, pour half (roughly) of the fudge mix into the 8 by 8 inch pan. Add a few drops of red food coloring dispersed throughout the surface of the fudge. Gently swirl the food coloring in with a butter knife.
Add the rest of the fudge to the pan. Give it one or two more swirls, but not too much, you don't want pink fudge.
Quickly pour the baking chips over the top of the fudge.
Refrigerate overnight before cutting into squares. Store in an airtight container at room temperature for up to two weeks.