Cover the inside of an 8-inch square baking pan with aluminum foil, leaving enough foil extending over the sides to create handles for removing the finished fudge.

Lightly coat the foil with nonstick cooking spray, then place the prepared pan aside.

Place the vanilla baking chips and sweetened condensed milk in a medium saucepan over medium heat.

Warm the mixture while stirring frequently to keep it from scorching on the bottom of the pan.

When the baking chips are nearly melted, remove the saucepan from the heat. Continue stirring until the remaining pieces melt completely and the mixture is uniformly smooth.

Add the crushed peppermint candy, peppermint extract, and one drop of red or green food coloring to the warm fudge mixture.

Stir thoroughly until the peppermint pieces, flavoring, and coloring are evenly incorporated throughout.

Transfer the fudge mixture into the prepared baking pan and spread it into an even layer.

Smooth the surface with a spatula, then refrigerate the pan for approximately 2 hours, or until the fudge has become firm and fully set.

Remove the chilled fudge from the refrigerator. Using the overhanging foil as handles, carefully lift the entire slab from the baking pan and transfer it to a cutting board.

Slice the fudge into individual squares. Serve at once or keep the pieces in an airtight container for storage.