Using an electric mixer, beat butter on medium speed for about 30-60 seconds until smooth and creamy. Add 3 cups of powdered sugar, cream, peppermint extract, salt, and food coloring, if using. Increase speed to high and beat for 3 minutes. Add more powdered sugar if frosting is too thin (up to 4 cups total) or more cream if mixture is too thick.
Fold in the chopped chocolate. Frost cooled cupcakes.
Store frosted cupcakes up to 1 week in the fridge in an airtight container.