Chuck E. Cheese – where the children could be children while the parents were treating headaches – files for bankruptcy. The 43-year-old chain, which attracted children with pizza, video games and a singing mouse mascot, was in trouble even before the coronavirus pandemic. But he said that the prolonged closure of many sites due to coronavirus restrictions led to the filing of Chapter 11 on Thursday.
CEC Entertainment Inc. has reopened 266 company-operated Chuck E. Cheese and Peter Piper Pizza restaurants, but it is unclear to what extent parents will be prepared to host birthday parties and other gatherings. The Irving, Texas-based company will continue to reopen locations and offer take-out products while negotiating with debt and lease holders.
CEC and its franchisees operate 734 restaurants in 47 states and 16 countries.
“The Chapter 11 process will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most difficult event in the history of our business,” said CEO David McKillips in a statement. press release prepared.
The restaurant industry has been devastated by the pandemic. At the low point of the pandemic in mid-April, transactions in American family restaurants fell by more than 80%, according to The NPD Group, a data and consultancy firm.
Orlando-based FoodFirst Global Restaurants, owner of the Italian restaurant chains Brio Tuscan Grille and Bravo Cucina Italiana, filed for bankruptcy in April. BarFly Ventures, which owns HopCat and other Midwestern bars, filed for bankruptcy earlier this month.
Chuck E. Cheese got his start in 1977 when Atari co-founder Nolan Bushnell opened Chuck E. Cheese’s Pizza Time Theater in San Jose, California. The restaurant featured a cast of animatronic characters led by Chuck E. Cheese, a brave rat in a bowler hat who was later renamed a mouse. “Where a child can be a child,” the chain promised in its slogan.
But in recent years, the chain has experienced difficulties. New competitors like Dave and Buster were offering larger sites, while trampoline parks like Launch and AirTime were offering alternatives for the holidays.
In 2014, CEC was bought by private equity firm Apollo Global Management. Under Apollo, he renovated stores, introduced up-to-date technology like game cards, and revamped his menu, adding coffee drinks and top-quality beer and wine. It has also refocused advertising to attract parents more directly.
In 2019, the chain’s same-store sales – or sales in places open for at least one year – increased by 3%. They increased in January this year but started to decrease in February and March.
The pandemic was a last drop. Fast food restaurants and take-out restaurants have done better, but restaurants that rely on food – like Chuck E. Cheese – have been hammered.
At one point, perhaps recognizing its downside, some Chuck E Cheese locations began offering food deliveries on apps like Grubhub under the alias “Pasqually’s Pizza & Wings”.