Abstract: In a process for preparing baked goods containing flavor chips, wherein the baked goods have overall improved flavor and the flavor chips have improved flavor and texture, the flavor chips are pre-soaked in fluid, edible oil under oil-absorbing conditions until the flavor chips contain at least about 33% by weight of oil and fat. The mixture of oil and chips is then chilled to a temperature at which the flavor chips are substantially solid. The oil-chip mixture is then mixed with a dough or batter, wherein the soaking oil becomes a portion of the oil or fat content of the dough or batter, dispensing oil soluble flavor components of the flavor chips throughout the dough or batter. Baked goods made with dough or batter prepared according to the present invention have enhanced flavor, and flavor chips of soft texture.