Place marshmallows in a microwave safe bowl and microwave in 30 second intervals. Stir between each burst until marshmallows are just melted.
Pour water over the marshmallows to release from the bowl and scrape all into the bowl of a stand mixer fitted with a dough hook attachment.
Add shortening, corn syrup, peppermint oil and food coloring and mix for 20 seconds.
Add half of the sifted confectioners' sugar and mix until it begins to come together. Add the remaining confectioners' sugar a mix until your mixer no is no longe incorporating the ingredients - then remove the fondant to a counter top lightly coated with shortening.
Knead until the fondant is smooth, using extra shortening if it feels sticky.
Flatten out slightly with your hand and place a layer of chopped chocolate and fold together a few times to begin to incorporate the chocolate. Flatten again and add the remaining chocolate and fold 10 more times. Knead a few times to create a nice round mass, coat in shortening, wrap twice in plastic, and place into a Ziploc bag to store for up to 4 weeks.
You can use this fondant immediately - it does not need to rest.
If it has rested for a length of time, to bring it back to rolling and working consistency, place in the center of the microwave and heat it for 5 seconds. Move one end to the center of the microwave and heat again for 5 seconds, then do the same with the opposite end.
When kneading, using shortening on your hands will help keep the chocolate from melting (though this is very temperature resistant to begin with).
Paneling is the best method to apply this fondant.
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