Chuck E. Cheese’s parent company has spent $230 million renovated its stores.
Source: CEC Entertainment
Four years after exiting bankruptcy, Chuck E. Cheese is making a comeback, thanks to a dramatic makeover to introduce its games and pizza to a new generation.
In June 2020, just as some states began lifting their pandemic lockdowns, Chuck E. Cheese’s parent company CEC Entertainment filed for Chapter 11 bankruptcy protection. It emerged from bankruptcy months later with new leadership and freed from about $705 million in debt.
Even when Covid subsided, the company faced another existential threat: figuring out how to entertain children – and their paying parents – in the age of iPads and smartphones. The company has spent more than $300 million in recent years tackling that challenge — and the investment has started to pay off.
CEC Entertainment, which also includes Pasqually’s Pizza & Wings and Peter Piper Pizza, has seen eight straight months of same-store sales growth, according to CEO Dave McKillips. The company isn’t publicly traded, but it discloses its financial results to its bond investors.
CEC Entertainment’s annual revenue grew from $912 million in 2019 to roughly $1.2 billion in 2023, according to Reuters. And that’s with fewer open Chuck E. Cheese locations. The chain has 470 U.S. locations currently, down from 537 in 2019.
Sustaining the growth won’t be easy. Like all restaurants, the chain has to win over consumers who are eating out less often as costs rise. Chuck E. Cheese also has to draw the attention of children and parents in a fragmented media market.
iconic animatronic band, featuring Charles Entertainment Cheese and his friends.
“We pulled out the animatronics. It was a hot debate for many legacy bands, but kids were consuming entertainment in such a different way, you know, growing up with screens and ever-changing bite-sized entertainment,” McKillips said.
The chain also redid its menu, upgrading to scratch-made pizzas. Kidz Bop became an official music partner. Other kid-friendly brands, like Paw Patrol, Marvel and Nickelodeon, became partners for its games.
And then came the trampolines.
“We found one glaring opportunity for us … active play,” McKillips said. He added that growth in the family entertainment category is largely coming from activity-based businesses, like trampoline parks and rock-climbing walls.
The company first tested the trampolines in Brooklyn and then in Miami, St. Louis and Orlando. As of December, 450 Chuck E. Cheese locations now have kid-sized trampolines. And unlike the SkyTubes or ball pits of the past, customers have to pay extra to use trampolines. (The ball pits disappeared from Chuck E. Cheese locations in 2011, while SkyTubes lasted roughly another decade.)
After the company spent $350 million to remodel Chuck E. Cheese locations, McKillips now says that process is finished.
“We needed to fix the product. The product is fixed,” he said.
prolific YouTube channel, with videos focused on its characters, not its pizza or games.
Plus, Chuck E. Cheese himself has six albums available on streaming platforms, and his band plays live, choreographed concerts.
“My dream would be to have a feature movie,” McKillips said.
Correction: A previous version of this story misstated the company’s current debt load and its investment to remodel locations.