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For the character, see Chuck E. Cheese (character).

Chuck E. Cheese
Formerly
  • Chuck E. Cheese's Pizza Time Theatre (1977–1990)
  • Chuck E. Cheese's Pizza (1990–1994)
  • Chuck E. Cheese's (1994–2019)
Company typeSubsidiary
Nasdaq: CHKY (1981–1984)
IndustryFamily restaurant, fast food
FoundedMay 17, 1977; 47 years ago (1977-05-17)
San Jose, California, U.S.
FounderNolan Bushnell
Headquarters
Irving, Texas
,
U.S.
Number of locations
612
Area served
The Americas, The Middle East, India
Key people
Gene Landrum (first president and COO)
Products
Pizza
BrandsPasqually's Pizza & Wings[1]
Services
Arcade games
OwnerApollo Global Management (2014–2020)
Monarch Alternative Capital (2020–present)
Parent
Websitewww.chuckecheese.com

Chuck E. Cheese is an American family entertainment center and restaurant pizza chain founded in 1977 by Atari co-founder Nolan Bushnell. Headquartered in Irving, Texas, each location features arcade games, amusement rides, and character stage shows in addition to serving pizza and other food items; former mainstays included ball pits, crawl tubes, and animatronic shows. The chain's name is taken from its main character and mascot, Chuck E. Cheese. The first location opened as Chuck E. Cheese's Pizza Time Theatre in San Jose, California. It was the first family restaurant to integrate food with arcade games and animated entertainment.

After filing for bankruptcy in 1984, the chain was acquired in 1985 by Brock Hotel Corporation, parent company of competitor ShowBiz Pizza Place. The merger formed a new parent company, ShowBiz Pizza Time, Inc., which began unifying the two brands in 1990, renaming every location Chuck E. Cheese's Pizza. It was later shortened to Chuck E. Cheese's in 1994, and Chuck E. Cheese in 2019. Parent company ShowBiz Pizza Time also became CEC Entertainment in 1998.

As of June 2020, CEC Entertainment owned 611 Chuck E. Cheese venues in 47 U.S. states, four Canadian provinces, and Puerto Rico. The COVID-19 pandemic put significant financial strain on the company, and CEC Entertainment filed a voluntary bankruptcy petition under Chapter 11 in the Southern District of Texas on June 25, 2020. The announcement was coordinated with 47 states and 16 countries including the United States, Canada, Mexico, Chile, Saudi Arabia, United Arab Emirates and India.

History

Two children in the Ticket Blaster, where children having birthday parties can collect as many tickets as they can before the time expires.
A girl playing in the now-removed SkyTubes play area.

Chuck E. Cheese's Pizza Time Theatre was founded by Atari founder Nolan Bushnell, who sought to expand video-game arcades beyond adult locations like pool halls to family friendly venues.[2][3] His experience in the amusement park industry, and his fondness for Disneyland's Country Bear Jamboree, influenced his concept for Pizza Time Theatre.[4][5] He has said, "It was my pet project ... I chose pizza because of the wait time and the build schedule—very few components, and not too many ways to screw it up."[6] When his first animatronic show was being assembled, Bushnell learned the costume he had bought for his main character, a coyote, was actually a rat, prompting him to suggest changing the name from "Coyote Pizza" to "Rick Rat's Pizza". His marketing team believed this name would not be appealing to customers and proposed "Chuck E. Cheese" instead. The company adopted the rat as their mascot.[7]

The first Chuck E. Cheese's Pizza Time Theater opened in San Jose, California, in 1977.[2][8] In 1978, when Atari's then-corporate parent Warner Communications refused to open additional locations, Bushnell purchased the rights to the concept and characters from Warner for $500,000.[9] Gene Landrum then resigned from Atari and was made the restaurants' president and chief operating officer.[10][11] By late 1979, there were seven PTT locations, all in California.[12] Its animatronics were produced fully in-house by PTT employees.

ShowBiz Pizza Place

Main article: ShowBiz Pizza Place

To expand beyond California and the west coast, Bushnell began to franchise, resulting in a co-development agreement between himself and Robert Brock of Topeka Inn Management in June 1979.[13] The agreement handed Brock exclusive franchising rights for opening Pizza Time Theatres in sixteen states across the Southern and Midwestern United States,[9] while also forming a company subdivision, "Pizza Show Biz", to develop the Pizza Time Theatres.[9]

Late in 1979, Brock became aware of Aaron Fechter of Creative Engineering, Inc. and his work in animatronics. In November 1979, he scouted Fechter's business and concluded that Creative Engineering's animatronics would be too strong a competition for Bushnell's work. Brock therefore requested that Bushnell release him from their co-development agreement, wishing to develop with Fechter instead.[9] In December 1979, Brock and Fechter formed ShowBiz Pizza Place Inc., and Brock gave notice to sever his development relationship with Bushnell.[9][14] ShowBiz Pizza Place was conceptually identical to Pizza Time Theatre in all aspects except for animation, which would be provided by Creative Engineering.[9] ShowBiz Pizza Place opened its first location on March 3, 1980, in Kansas City, Missouri.[8]

Upon the opening of ShowBiz Pizza Place, Bushnell sued Brock and Topeka Inn Management over breach of contract.[9] Brock immediately issued a counter-suit against Bushnell, citing misrepresentation.[9] The court case began in March 1980, eventually settling out of court with Showbiz agreeing to pay Pizza Time Theatre a portion of its profits over the following decade.[9] During this period, Topeka Inn Management also changed its name to Brock Hotel Corporation and moved its headquarters to Irving, Texas.[9] Both restaurants experienced increased success as the video game industry became more robust,[9] and, to maintain competition, both franchises continually modified and diversified their animatronic shows.

Mergers and restructuring

An older Chuck E. Cheese location under the now defunct title of Chuck E Cheese's Pizza

In 1981, Pizza Time Theatre went public; however, the evolving video game industry and the video game crash of 1983 resulted in significant losses for Pizza Time Theatre, which lost $15 million in 1983. By early 1984, Bushnell's debts were insurmountable, resulting in the filing of Chapter 11 bankruptcy for Pizza Time Theatre Inc. on March 28, 1984.[8][15] Brock then bought the foundering company, finalizing the purchase in May 1985 and merging the two restaurant companies into Showbiz Pizza Time Inc.[8][16]

After the merge, both restaurant chains continued operating under their respective titles, while major financial restructuring had begun.[8] During this period, Creative Engineering began to sever ties with ShowBiz Pizza Time (officially splitting in September 1990), resulting in the unification of the two brands. By 1992, all restaurants assumed the name of Chuck E. Cheese's Pizza.[17][18] The name was then shortened to Chuck E. Cheese's by March 1994 after a redesigned concept.[8][19] In 1998, Showbiz Pizza Time renamed itself CEC Entertainment, Inc. to reflect the remaining chain brand.[20][8] CEC Entertainment has since acquired additional family restaurant properties, including 13 locations of the now-defunct Discovery Zone in 1999,[21] and all locations of Peter Piper Pizza in October 2014. Peter Piper Pizza still operates under that name.[22]

International expansion

In the early 1980s, the restaurant franchise debuted in Australia under the name Charlie Cheese's Pizza Playhouse. The name change had to do with the common meaning of the word "chuck", which in Australia is a reference to the phrase "to throw up".[23] Consecutively, Pizza Time Theatre, Inc. also opened at least one restaurant in Hong Kong and Singapore, which both closed shortly thereafter as a result of the initial company's 1984 bankruptcy.[23]

Chuck E. Cheese's Boulevard Marina in Viña del Mar, Chile
Chuck E. Cheese's Mallplaza in Trujillo, Peru

As of June 2020, Chuck E. Cheese operates 612 corporate and franchise stores, as well as 122 Peter Piper Pizza restaurants. They are located in 47 states across the United States and in 16 countries and territories around the world.[24][25]

Buyout and modern redesign

By 2012, CEC was struggling with decreasing revenue.[26] They ran a rebranding campaign, changing the rat mascot into a rock star guitar-playing mouse.[27] In-store restaurant sales continued to decline through 2013 but merchandising and box office revenue increased.[28]

[CEC Entertainment]

In February 2014, Apollo Global Management acquired CEC Entertainment, Inc. for $54 per share, or about $950 million.[29][30] In October 2014, under Apollo Global Management, CEC Entertainment announced that they would purchase their Phoenix-based competitor, Peter Piper Pizza from ACON Investments.[31]

In August 2017, the company began to pilot a new design concept at seven remodeled locations (three in Kansas City, three in San Antonio, one in Selma, Texas), branded as Chuck E. Cheese Pizzeria & Games. These locations feature more upscale decor with a "muted" interior color scheme, an open kitchen, the "Play Pass" card system to replace arcade tokens, and the animatronic stage show replaced by a dance floor area. These changes, along with expansions to food offerings, were intended to help the chain be more appealing to adults and encourage family dining as opposed to primarily hosting parties.[32][33]

In 2019, the corporation announced it would go public on the New York Stock Exchange through a shell company, Leo Holdings Corporation, in which Apollo will still own 51% of.[34] Bloomberg also reported that after going public, Chuck E. Cheese would no longer have animatronic animals as part of the entertainment.[35] The proposed merger between CEC Entertainment and Leo Holdings Corporation was terminated on July 29, 2019.[36]

Entertainment

Video arcade

A 2001 Chuck E. Cheese token.

Since the company's inception, one of the primary draws for the business has been its video arcade offering inside restaurants.[2][20] Within the arcade, customers can play coin-operated video games or redemption games, the latter of which involves games of skill that reward players in the form of tickets based on score. Tickets can be redeemed later for merchandise, such as candy and toys.[37]

The coin-op games originally accepted brass tokens issued by the company, stamped with various logos and branding that evolved over time. The company experimented with a card access method as a replacement for tokens, which allowed customers to load credits onto a card that could then be swiped for access at arcade games and refilled later. It was tested under different names including "Chuck E.'s Super Discount Card" and "Chuck E. Token Card".[38][39]

Characters and animatronics

Chuck E. Cheese Animatronics Munch's Make Believe Band 2009

Another primary draw for the centers since their beginning through to the mid-2010s has been its animatronic shows.[40] There have historically been several different styles of animatronic shows in use within the company, details of which would vary depending on when the location opened, whether it was renovated, available room for animatronic stages, and other factors.[41] Over the years, these animatronics have often been supplemented by (and in recent years been completely replaced by) costumed characters.

When the first location opened in 1977, the animatronic characters were featured as busts in framed portraits hanging on the walls of the main dining area. The original show featured Crusty The Cat (the first character to face retirement as he was soon replaced with Mr. Munch in 1978), Pasqually the singing chef, Jasper T. Jowls, the Warblettes, and the main focus of the show, Chuck E. Cheese.[42] By 1979, many restaurants had also added "Cabaret" shows in separate rooms of each restaurant.[2] One of the early Cabaret characters was Dolli Dimples, a hippopotamus who played the piano and sang in the blues/jazz style of performer Pearl Bailey.[43][44] The in-house control system consisted of a 6502-based controller in a card cage with various driver boards was called "Cyberamics".[45][46]

While Fechter separately produced the Rock-afire Explosion animatronics for ShowBiz Pizza through the early 1980s, Bushnell and Pizza Time Theatre continued work on characters for their portrait format and newer balcony performance stage shows under the umbrella of the Pizza Time Players.[47] Development on Cabaret concepts slowed greatly after Pizza Time Theatre Inc.'s bankruptcy in 1984 and its purchase by ShowBiz a year later. From 1985 to 1990, the merged company kept their brands (and their respective animatronics) mostly separate.

After Fechter refused to sign over the rights to the Rock-afire Explosion to Showbiz Pizza Time, Inc., "Concept Unification" was undertaken beginning in September 1990 and continuing through 1992, to eliminate Fechter's characters from ShowBiz locations.[48] The animatronics used for ShowBiz's Rock-afire Explosion band were redressed as "Munch's Make Believe Band", with new costumes.[49] In the mid-1990s, the character Chuck E. Cheese began to see significant design changes. His vest (or suit) and derby hat were changed for a baseball cap, casual shirt, and optional sneakers in an attempt to appeal to a younger audience.

Beginning in 1998, the animatronics show installed into new stores, referred to as "Studio C", consisted of a single animated Chuck E. Cheese character created by Garner Holt alongside large television monitors, lighting effects, and interactive elements.[50] The other characters appear as puppets on the TV screens. The control system dubbed "Cyberstar" was re-designed from the ground up and produced by Dave Philipsen. The last animatronic stage mass-produced for Chuck E. Cheese, "Circles of Light", premiered in early 2012.

Elimination of animatronics

In July 2012, the long-standing rat mascot was rebranded, changing to a slimmer rock star mouse who plays electric guitar. Voice actor Duncan Brannan, who for 19 years had characterized Chuck E. Cheese as a wise-cracking rat from New Jersey, was replaced with Jaret Reddick, the frontman and guitarist for the pop punk band Bowling for Soup.[27][51]

By 2015, the "Chuck E. Live Stage" Also known as "Stage V2", which featured no animatronics at all, a modernized dance floor, and performances only with costumed characters, had been created. In 2017, the chain announced that animatronic shows would be removed entirely in favor of this design in seven pilot locations.[52] After the pilot locations showed promise, retirement of animatronics at Chuck E. Cheese locations accelerated and continued through 2019, by which time 80 of its stores were expected to be retrofitted to the new design.[53][54] Live costumed character performances, particularly of the Chuck E. Cheese character himself, are still widely used today, especially in locations where animatronics have been eliminated.

Food

Pizza is the main focus of the restaurant portion of the business, but the menu features other items as well including cold-cut sandwiches, chicken wings, salad bar access, and desserts.[55] In addition, some Chuck E. Cheese locations offer alcoholic beverages.[56]

In March 2020, during the COVID-19 pandemic, the restaurant began selling pizza, wings, desserts and more through food delivery services under the virtual brand Pasqually's Pizza & Wings. The Pasqually name comes from Pasqually P. Pieplate, who is a member of Munch's Make Believe Band, the Chuck E Cheese animatronic band. While food sold under this brand comes from the same brick-and-mortar kitchens as Chuck E. Cheese, the company claims to use different ingredients and recipes that cater to a more mature audience. Practically all of the Chuck E. Cheese stores in the United States are selling and delivering food under this virtual brand.[1][57]

CEC Entertainment

CEC Entertainment Holdings, LLC. is an American holding company headquartered in Irving, Texas. It is the parent company of the chain stores Chuck E. Cheese and Peter Piper Pizza and was founded after the former purchased ShowBiz Pizza Time, Inc. in 1998.[58]

History

In 1998, the company renamed itself CEC Entertainment, Inc. Part of this renaming was related to a move from the NASDAQ to the NYSEhttps://cecentertainment.gcs-web.com/ In 1999, CEC Entertainment, Inc. bought out competitor Discovery Zone Chuck E. Cheese's celebrated its 30th anniversary in 2007.[3] Currently, there are 590 open locations throughout North America, South America, and the Middle East.

In 2012, CEC Entertainment announced that their mascot would receive a redesign. Jaret Reddick [59], lead singer of the musical group Bowling for Soup, was hired to become the new voice of Chuck E. Cheese, after having been voiced by Duncan Brannan for 19 years. The Redesign is now animated in CGI. The replacement of Brannan with Reddick was met with backlash [60], but the company issued the following statement: "Brannan was not fired from Chuck E. Cheese's, rather we simply chose to utilize new voice talent for the original music we have written as part of a TV advertising campaign in partnership with The Richards Group. On several occasions prior to the release of Chuck E.'s new single last week, we communicated to Brannan that his primary responsibilities with our in-store entertainment group would not change. There is still plenty of opportunity for Duncan to provide more of his voice talent and services for Chuck E. Cheese's in the future if he chooses to do.”

Financial trouble

The COVID-19 pandemic has been financially damaging to the parent company, and with an estimated $1–2 billion in debt, the possibility exists of all CEC properties being forced to close if bankruptcy refinancing fails.[61] CEC Entertainment solicited $200 million in loans to finance a restructuring under bankruptcy protection.[62] They also filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas on June 25, 2020.[63]

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