Line an 8x8-inch baking dish with parchment paper or aluminum foil. Spray with non stick baking spray if using foil. Set aside.
Place white chocolate chips and sweetened condensed milk into a medium sauce pan. Stir over medium heat until chips are almost melted.
Remove from the heat and continue to stir until the mixture is smooth and all the chips have melted. Stir in peppermint extract and crushed mints.
Remove half of the mixture to a bowl and add red food coloring, stirring until combined.
Add spoonfuls of the white mixture to the baking dish. Place spoonfuls of the red mixture in the gaps to form an even layer. It's best to do this in two layers to have red spots on top and bottom. Chill for 2 to 3 hours and then cut.
Notes
Add additional crushed candy to the top of the fudge, if desired. It's best to do this prior to chilling.