01 - Line an 8x8-inch baking pan with parchment paper, allowing the sides to overhang for easy removal.
02 - Combine white chocolate chips, sweetened condensed milk, and butter in a medium saucepan over low heat. Stir constantly until melted and smooth.
03 - Remove from heat and stir in peppermint extract.
04 - Pour about three-quarters of the mixture into the prepared pan and spread evenly with a spatula.
05 - Add red gel food coloring to the remaining mixture and stir until evenly colored.
06 - Drop spoonfuls of the red mixture over the white layer. Use a knife or skewer to gently swirl the two colors together for a marbled effect.
07 - Sprinkle crushed peppermint candies evenly over the surface, gently pressing them in.
08 - Refrigerate for at least 2 hours, or until fully set.
09 - Lift the fudge from the pan using the parchment paper. Cut into squares and serve.