Line 8-inch square pan with foil, extending foil over sides of pan. Lightly butter foil. Melt vanilla chips in large saucepan over low heat, stirring until smooth.*
Remove saucepan from heat; stir in frosting and peppermint extract. Spread in buttered foil-lined pan.
Drop food color over fudge. Pull knife through mixture to marble. Sprinkle with crushed candy; press lightly. Refrigerate about 1 hour or until firm.
Remove fudge from pan by lifting foil. Cut fudge into squares.