The End Of Chuck E. Cheese: What's Next?

Chuck E. Cheese, the entertainment-and-pizza chain with locations across the US, has been facing financial troubles since the onset of the COVID-19 pandemic. The company filed for Chapter 11 bankruptcy protection in 2020 and has since been in and out of bankruptcy. As a result, several Chuck E. Cheese locations across the country have closed down, with little to no warning for employees and customers.

Chuck E. Cheese closed 10 locations in 2024

The 10 locations that closed in 2024 include:

• Arlington, Texas
• Fargo, North Dakota
• Bridgewater, New Jersey
• Monroeville, Pennsylvania
• Sioux Falls, South Dakota
• Joplin, Missouri
• Hagerstown, Maryland
• Davenport, Iowa
• Omaha, Nebraska (unknown, rumoured)
• Berks County, Pennsylvania

The company spokesperson noted that families are welcome to visit nearby locations, and that they will continue to seek new opportunities for families to enjoy Chuck E. Cheese. In addition, employees at the closed locations were offered opportunities at other Chuck E. Cheese sites.

While the company did not give out a full list of the stores that will close, there are rumours that West Des Moines might be next, while Omaha remains unknown.

The company has been in and out of bankruptcy since COVID-19

The COVID-19 pandemic has had a devastating impact on the service industry, and restaurants, in particular, have struggled. Chuck E. Cheese's parent company, CEC Entertainment, has been no exception. In June 2020, CEC Entertainment filed for Chapter 11 bankruptcy protection. The company cited the pandemic as the most challenging event in its history, with the temporary closure of its venues resulting in a loss of over 90% of revenue.

However, even before the pandemic, CEC Entertainment faced financial difficulties. In 2014, the company was taken private by Apollo Global Management through a leveraged buyout that left it with substantial debt. In 2019, the company posted a net loss of $29 million. The pandemic only exacerbated these existing financial problems, and the company found itself unable to pay rent at hundreds of locations.

CEC Entertainment has attempted to turn its fortunes around by filing for bankruptcy protection and negotiating with debt and leaseholders. The company has also sought to revamp its brand and image, investing $300 million in a series of revamping measures to make the restaurants more appealing to modern families. These measures include introducing kid-sized trampolines and replacing animatronics with floor-to-ceiling JumboTrons.

Despite these efforts, Chuck E. Cheese continues to face challenges. As of December 2024, the company had permanently closed around 34 locations, and there are concerns that more may follow. The company has been in and out of bankruptcy since the COVID-19 pandemic, and it remains to be seen if it can recover and return to profitability.

The closure of the Fargo location came 15 months after a full remodel

The Chuck E. Cheese location in Fargo, North Dakota, closed its doors in March 2024, leaving the community with a sense of disappointment and nostalgia. This closure came as a surprise to many, with a note on the door simply stating, "Sorry, we're closed," with no further explanation. The Fargo location had been a beloved fixture in the community for years, offering pizza, games, and entertainment for families and serving as a first job for many teenagers.

The closure of the Fargo location came just 15 months after a full remodel, which included a dance floor, new and updated games, and a video wall. This recent renovation made the sudden closure even more unexpected and left employees and patrons alike feeling a sense of loss. Stephanie Samson, a former employee, shared her fond memories of working at Chuck E. Cheese and the joy she experienced being a part of children's excitement when the iconic mouse, Chucky, made an appearance.

The closure of the Fargo location also highlighted the financial burden on parents, as well as the impact on children who looked forward to visiting Chuck E. Cheese. With little to no warning, employees were left scrambling to find new jobs, and the community expressed their support and empathy for those affected. Elizabeth MacFarlane, a resident of Grand Forks, shared her concerns and sympathized with the employees, having been through a similar situation herself.

The closest Chuck E. Cheese location to the Fargo community is now in St. Cloud, Minnesota. While gift cards and points can still be redeemed at participating locations across the US, the closure of the Fargo site marked the end of an era for the local community. The Fargo location holds a special place in the hearts of many, and its closure serves as a reminder of the impact that such establishments can have on individuals and families.

The closure of the Fargo location is part of a broader trend of Chuck E. Cheese closures across the US. In addition to Fargo, locations in Bridgewater, New Jersey; Monroeville, Pennsylvania; Sioux Falls, South Dakota; and Hagerstown, Maryland, among others, have also shut down. These closures can be attributed to various factors, including lease terms, changing neighbourhoods, new competition, and financial struggles, especially in the wake of the COVID-19 pandemic.

The company filed for Chapter 11 bankruptcy protection in 2020

The COVID-19 pandemic has had a devastating impact on restaurants, and Chuck E. Cheese has not been immune to this. The company filed for Chapter 11 bankruptcy protection in June 2020, after pandemic-related shutdowns and sweeping restrictions on crowds left its finances in freefall.

The parent company of Chuck E. Cheese, CEC Entertainment, had already accumulated substantial debt following a leveraged buyout by Apollo Global Management in 2014. The pandemic exacerbated this, with the company losing more than 90% of its revenue despite efforts to increase food delivery and takeout services.

In a court filing, CEC Chief Financial Officer James Howell said:

> "In ordinary times, the company would be financially sound."

CEC Entertainment's credit rating and income plummeted after the pandemic hit, and the company faced mounting debt. In April 2020, it began restructuring to mitigate losses, and in May, it was revealed that Chuck E. Cheese had started selling pizza on Grubhub under the name "Pasqually's Pizza". This attempt to adapt to the changing restaurant landscape, however, was not enough to save the company from bankruptcy.

Despite the bankruptcy filing, CEC Entertainment planned to continue reopening Chuck E. Cheese locations as it negotiated with landlords and stakeholders. The company said it hoped to use the Chapter 11 process to shed debt and emerge as a more sustainable operation. CEO David McKillips called the pandemic "the most challenging event in our company's history" and expressed his desire to "get back to the business of delivering memories, entertainment and pizzas for another 40 years and beyond."

Chuck E. Cheese emerged from bankruptcy in 2020

Chuck E. Cheese's parent company, CEC Entertainment, filed for Chapter 11 bankruptcy protection in June 2020. The company emerged from bankruptcy months later, in December 2020, with new leadership and freed from about $705 million in debt.

The company's bankruptcy was largely due to the COVID-19 pandemic, which saw its venues temporarily closed and resulted in the loss of more than 90% of its revenue. CEC Entertainment also struggled under the weight of substantial debt incurred when Apollo Global Management took the company private in 2014 through a leveraged buyout.

Under the new leadership of CEO Dave McKillips, a former Six Flags executive, Chuck E. Cheese has undergone a dramatic makeover to introduce its games and pizza to a new generation. The company has spent over $300 million in recent years to remain competitive in the age of iPads and smartphones, investing in trampolines, a retooled pizza recipe, and the elimination of animatronics.

The changes seem to be paying off, with CEC Entertainment, which also includes Pasqually's Pizza & Wings and Peter Piper Pizza, reporting eight straight months of same-store sales growth and no longer carrying any debt. The company's annual revenue grew from $912 million in 2019 to roughly $1.2 billion in 2023, despite having fewer open locations.

While sustaining this growth will be challenging, with the need to win over consumers who are eating out less due to rising costs, the successful turnaround has positioned Chuck E. Cheese for a new chapter.

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