Chuck E. Cheese's

Chuck E. Cheese's
Privately held company
Traded as CEC
Industry Family entertainment centers,[1] fast food
Founded May 1977 (1977-05)
San Jose, California, U.S.
Founder Nolan Bushnell, (Pizza Time Theatre, Inc.),[2]
Gene Landrum,[3]
Robert L. Brock (ShowBiz Pizza Place, Inc. - later merged with Pizza Time Theatre, Inc. into "ShowBiz Pizza Time, Inc.")
Headquarters Irving, Texas, U.S.[1]
Number of locations
 590 stores (2015)[4]
Area served
 North America, South America, Middle East
Key people

Tom Leverton (CEO)[4]
Nolan Bushnell (Founder - Pizza Time Theatre, Inc.)[2]

Robert L. Brock (Founder - ShowBiz Pizza Place, Inc.)
Products Pizza, arcade games, kiddie rides, birthday parties[1]
Revenue US$248,133,000 (1st Q.2009), Increase 1% from 1st Q.2008[4]
US$59,214,000 (1st Q.2009) Increase from 1st Q.2008[4]
US$34,052,000 (1st Q.2009) Increase 1% from 1st Q.2008[4]
Total assets
  • Decrease US$ 791.611 million (2013) [5]
  • Increase US$ 801.806 million (2012) [5]
Total equity US$725,868,000 at 2009-03-29 Decrease 1% from 4th Q.2008[4]
Parent CEC Entertainment Concepts, LP (formerly Pizza Time Theatre, Inc; and ShowBiz Pizza Place, Inc; merged as ShowBiz Pizza Time, Inc. in 1984)
Subsidiaries Showbiz Pizza Place & Chuck E. Cheese's Pizza Time Theatre (merged into Chuck E. Cheese's Pizza),[6] Liquidated assets of Discovery Zone, Peter Piper Pizza
Website www.chuckecheese.com

Chuck E. Cheese's (formerly Chuck E. Cheese's Pizza Time Theatre and Chuck E. Cheese's Pizza) is a chain of American family entertainment centers and restaurants. The chain is the primary brand of CEC Entertainment, Inc. and is headquartered in Irving, Texas.[1] The establishment serves pizza and other menu items, complemented by arcade games, amusement rides, indoor playgrounds, and animatronic displays as a focus of entertainment for the entire family.[2] The brand derives its name from its main animatronic character Chuck E. Cheese, a comedic mouse who sings and interacts with guests.[2][7]

Chuck E. Cheese's Pizza Time Theatre in San Jose, California, was the first location to open in May 1977.[8][9] The concept was authored by Atari co-founder Nolan Bushnell, credited with bringing video games such as Pong to the mainstream. The Pizza Time Theatre was the first family restaurant to integrate food, animated entertainment, and an indoor arcade.[2] Following a filing for bankruptcy, the chain was acquired by competitor Showbiz Pizza Place in 1984, forming Showbiz Pizza Time, Inc.[10] In 1990, the company began unifying the two brands with the goal of renaming every location to Chuck E. Cheese's Pizza.[6][11] They redesigned the logo in 1994, dropping Pizza from each store's name.[10] In 1998, Showbiz Pizza Time, Inc. became CEC Entertainment, Inc., and the company operates 590 locations as of 2015.[1][10]

Corporate history

Chuck E. Cheese's, originally referred to as Chuck E. Cheese’s Pizza Time Theatre, was founded by Atari founder Nolan Bushnell who was seeking to expand the purview of video game arcades beyond more adult locations like pool halls to a kid and family friendly venue.[2][12] Bushnell’s experience in the amusement park industry, as well as his fondness of The Walt Disney Company, was influential in the conceptualization of the Pizza Time Theatre concept.[13] The first location opened in San Jose, California in 1977, and was labeled as the first family restaurant to integrate food, cheap animated entertainment, and an indoor arcade.[2][10] In 1978, Bushnell purchased the Pizza Time Theatre concept from Atari's then-corporate parent, Warner Communications.[14]

Franchising

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

As the restaurant became increasingly successful, he began to franchise, resulting in a co-development agreement between Bushnell and Robert Brock of Topeka Inn Management in 1979. The agreement handed Brock exclusive franchising rights for opening Pizza Time Theatres in sixteen states across the southern and midwestern United States,[14] while also forming a company subdivision, "Pizza Show Biz", to develop the Pizza Time Theatres.[14]

ShowBiz Pizza Place

Main article: ShowBiz Pizza Place

In November 1978, Brock met Aaron Fechter of Creative Engineering, Inc. Concerned that Fechter’s animatronics would be too strong a competition for Bushnell’s work, Brock requested that Bushnell release him from the co-development agreement, citing misrepresentation.[14] In December 1979, Brock and Fechter formed “Showbiz Pizza Place Inc”, severing Brock's business relationship with Bushnell.[14][15] ShowBiz Pizza Place was conceptually identical to Pizza Time Theatre in all aspects except for animation, which would be provided by Creative Engineering.[14] Showbiz Pizza Place opened its first location on March 3, 1980, in Kansas City, Missouri.[10]

Upon the opening of ShowBiz Pizza Place, Bushnell sued Brock and Topeka Inn Management over breach of contract.[14] Brock immediately issued a counter-suit against Bushnell, citing misrepresentation.[14] 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.[14] During this period, Topeka Inn Management also changed its name to Brock Hotel Corporation and moved its headquarters to Irving, Texas.[14] Both restaurants experienced increased success as the video game industry became more robust,[14] and, to maintain competition, both franchises continually modified and diversified their animatronic shows.

Mergers and restructuring

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, and by 1984, Bushnell’s debts were insurmountable, resulting in the filing of Chapter 11 bankruptcy for Pizza Time Theatre Inc.[10] Showbiz then bought the foundering company, recreating itself as Showbiz Pizza Time Inc.[10]

After the merger, both restaurants continued operating under the different titles, while major financial restructuring had begun,[10] eventually becoming publicly traded in 1989, with sales increasing by 8.3%.[1][10] During this period, Creative Engineering began to sever ties with ShowBiz Pizza Time (they officially left the company in September 1990), eventually resulting in the unification of its mixed characters. By 1992, all restaurants assumed the name of Chuck E. Cheese’s Pizza.[6] However, the name was changed to Chuck E. Cheese's by March 17, 1995 after a 1994 redesigning of the concept.[10][16] In 1998, the company renamed itself CEC Entertainment, Inc.. Part of this renaming was related to a move from the NASDAQ to the NYSE.[1][10] In 1999, CEC Entertainment, Inc. bought out competitor Discovery Zone.[17] Chuck E. Cheese's celebrated its 30th anniversary in 2007.[10]

In February 2014, Apollo Global Management acquired CEC Entertainment for $54 per share, or about US $950 million.[18] There are 577 open locations throughout North America, South America, and the Middle East.[1][4][19]

Mascot redesign

In 2012, Chuck E. Cheese's announced that their Chuck E. Cheese mascot would receive a major makeover to make the character look more like a rockstar.[20] Jaret Reddick, lead singer of the musical group Bowling for Soup, was hired as the new voice of Chuck E. Cheese,[21] who had been voiced by Duncan Brannan for many years.

The newly designed character was featured in a series of advertising campaign spots produced by Sugar Film Productions, Reel FX and BREED.[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] Chuck E. Cheese also opened at least one restaurant in Hong Kong, which closed shortly thereafter as a result of the company's 1984 bankruptcy.[23]

In addition to the U.S. and Canada, there are Chuck E. Cheese's locations in Mexico, Chile, Guatemala, Panama, Peru, Saudi Arabia, Trinidad and Tobago, and United Arab Emirates.[24]

Products

Menu items

While its primary focus is pizza, Chuck E. Cheese's also offers cold-cut sandwiches, chicken wings, salad bars and desserts. Some stores are also used as "test" locations which feature new Chuck E. Cheese foods.[25] Certain Chuck E. Cheese locations also offer beer and wine.[26]

Starting on November 13, 2012, new gluten-free menu items are available at more than 500 locations in the U.S. and Canada. This currently includes a choice of a personal-size cheese pizza and an individual chocolate cupcake.[27]

Entertainment

Arcade and currency

From the time of the company's inception to today, one of the main draws for the stores has been the arcade.[2][1] The arcade games primarily consist of either redemption games or video arcade games.[28]

The brass tokens issued by the company for use in their arcades exist in numerous varieties, and are collected by exonumia enthusiasts.[29] The company once tested a card access method for use with their arcade and skill games in one location. The test location would no longer use tokens, and instead use a refillable card to access credits, which replace tokens, and points, which replace tickets. However, this was later scrapped. It was tested under different names, including "Chuck E.'s Super Discount Card" and "Chuck E. Token Card".[30][31] This method is currently being tested in some markets again. Instead of electronic tickets like the former cards, Patrons still carry paper tickets and the card just take the place of the metal tokens. CECE, or CEC Entertainment, has called the new system "Play Pass".

Animatronic figures

Chuck E. Cheese animatronic in 2014

Along with the arcade, the other main draw for the centers since the beginning was its animatronic show, until the mid-1990s. More recently, less attention has been placed on animatronics. However, there are now several different styles of animatronic shows in use within the company, depending on when the location opened, whether it was renovated, and other factors.[32]

When the first location opened in 1977, the animatronic characters were featured in framed portraits hanging on the walls of the main dining area, but they are no longer in use today. The 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.[33] Later, restaurants also added "Cabaret" shows in separate rooms of each restaurant.[2] They also frequently changed out the sole female character, named Helen Henny, in the main show. They achieved this by applying a cosmetic change to the existing robot, as well as a change of stage backdrop, to match the performer.[34][35]

Beginning in 1998, the company's show installed into new stores, referred to as "Studio C", consists of a single animated Chuck E. Cheese character alongside large television monitors, lighting effects, and interactive elements. The other characters appear as puppets on the TV screens.[36] In some markets, the company has also tried a new store concept that omits the animated show entirely. This is the Circle of Lights stage which either consists of a live Chuck E. Cheese costume character or an animatronic in a futuristic light stage with large television monitors.

The members that currently perform in the animatronic show are:[37]

Play area

Chuck E. Cheese's has indoor play areas similar to play areas such as the Playplace at McDonald's with slides and tube mazes.

Formerly, the play areas at Chuck E. Cheese's were equipped with ball pits, but were removed in 2003 due to extremely poor conditions and multiple severe injuries.

Chuck E. Cheese's also has a play area for smaller children called "The Toddler Zone" where it features a smaller play area and younger appropriate arcade games and rides.

Costumed shows

A Chuck E. Cheese walkaround character performing for guests in 2011.

There are two types of costumed shows used by Chuck E. Cheese's: the LIVE! show and the Road show. The LIVE! show is performed at the front of the stage in the showroom, whenever a child is celebrating a birthday. The live show is a way of pumping up the crowd before a customized rendition of "Happy Birthday" is sung to the child that is celebrating the birthday ("I say Happy, you say Birthday...). A costumed Chuck E. Cheese dances with the guests and sings, while being accompanied by the cast members.[38] The Road show is a performance by a costumed Chuck E. Cheese character, and is performed outside the normal showroom. Children are gathered via the public announcement system or by Chuck E. Cheese himself. Chuck E. Cheese wants the kids to dance in order to win free tickets. The free tickets are thrown at the end of the performance for all the kids that participated. Chuck E. comes out every hour on the half hour (12:30, 1:30, etc.). The songs Chuck E. and the kids dance to are usually well-known classic songs such as "If You're Happy and You Know It" and "Head, Shoulders, Knees, and Toes".

See also

References

  1. 1 2 3 4 5 6 7 8 9 "Investor Information" (PHP). Chuck E. Cheese's Official Site. CEC Entertainment, Inc. Retrieved 2009-03-03.
  2. 1 2 3 4 5 6 7 8 9 Packer, Linda (October 1979). "Catering To Kids" (PDF). Food Service Marketing. pp. 46–7.
  3. ↑ Ponder, Erica. "Building a Strong Business Network with Dr. Gene Landrum". Houston Style Magazine. Retrieved 10 March 2016.
  4. 1 2 3 4 5 6 7 "CEC Entertainment Reports Financial Results for the First Quarter of Fiscal 2009; Revises Previously Scheduled Date for Investor Conference Call" (Press release). Business Wire. 2009-04-30. Retrieved 2009-05-04.
  5. 1 2 "CEC ENTERTAINMENT INC 2013 Annual Report Form (10-K)" (XBRL). United States Securities and Exchange Commission. February 12, 2014.
  6. 1 2 3 Prewitt, Milford (1990-09-10). "ShowBiz Parent Merges Concepts Into One Big Pie" (PDF). Nation's Restaurant News. pp. 12–3.
  7. ↑ "Entertainment" (PHP). Chuck E. Cheese's Official Site. CEC Entertainment, Inc. Retrieved 2009-05-12.
  8. ↑ "Chuck E. Cheese's 'founder' speaks to mom in campaign from Dallas' Richards Group - Dallas Morning News". The Dallas Morning News. 2012-08-16. Retrieved 2016-08-20.
  9. ↑ "Chuck E. Cheese fined for violating child-labor laws - Mercury News". San Jose Mercury News. 2011-12-13. Retrieved 2016-08-20.
  10. 1 2 3 4 5 6 7 8 9 10 11 12 "Company History". Chuck E. Cheese's Official Site. CEC Entertainment, Inc. Archived from the original on January 6, 2012. Retrieved 2009-05-04.
  11. ↑ "www.showbizpizza.com/info/articles/joint/joint_cuarticle.pdf" (PDF). ShowbizPizza.com. 1990-09-10. Retrieved 2016-08-20.
  12. ↑ Kent, Steve L. The Ultimate History of Video Games: From Pong to Pokémon and Beyond: The Story behind the Craze That Touched Our Lives and Changed the World. Roseville, CA: Prima Pub., 2001.
  13. ↑ "Pizza Time's Vaudeville Theatre" (PDF). Western Foodservice. March 1979.
  14. 1 2 3 4 5 6 7 8 9 10 11 Kinkead, Gwen (July 1982). "High Profits from a Weird Pizza Combination" (PDF). Fortune. pp. 62–68.
  15. ↑ "Rock-afire Explosion Brochure" (PDF) (Press release). Creative Engineering, Inc. 1980. Retrieved 2009-03-03.
  16. ↑ "www.sec.gov/Archives/edgar/data/813920/0000813920-95-000002.txt". U.S. Securities and Exchange Commission. 2009. Retrieved 2016-08-20.
  17. ↑ Zuber, Amy (1999-07-05). "Chuck E. Cheese's 'traps' Discovery Zone". Nation's Restaurant News. 33 (27). Irving, Texas. p. 1. ISSN 0028-0518. Archived from the original on 2015. Retrieved 2009-04-08.
  18. ↑ Chuck E. Cheese Owner Agrees to $950M Buyout; ABC News; January 16, 2014
  19. ↑ Apollo Global Management Announces Completion of Its Acquisition of CEC Entertainment, Inc.; BusinessWire - Press release; February 14, 2014
  20. ↑ "Chuck E. Cheese: Pizza chain mascot gets an overhaul". The Christian Science Monitor. Retrieved 2012-10-13.
  21. ↑ Choi, Candice (July 5, 2012). "Chuck E. Cheese transforming into a rock star". Chicago Sun-Times. Retrieved July 5, 2012.
  22. ↑ Chuck E. Rocks; Screen Magazine; June 29, 2012
  23. 1 2 VegaNova. "Chuck E. Cheese's Collectables". www.showbizpizza.com. Retrieved 2016-02-21.
  24. ↑ "Chuck E. Cheese's Locations Near You". Chuck E. Cheese's. Retrieved September 25, 2016.
  25. ↑ "Nutritional Information" (PDF). Chuck E. Cheese's Official Site. CEC Entertainment, Inc. January 2009. Retrieved 2009-05-13.
  26. ↑ Lieberman, Al & Esgate, Patricia (2002). "Location-Based Entertainment and Experiential Branding". The Entertainment Marketing Revolution (PDF) (Illustrated ed.). FT Press. p. 272. ISBN 0-13-029350-4. Retrieved 2009-05-13.
  27. ↑ "New Gluten-Free Offerings - Chuck E. Cheese's". Chuck E. Cheese's.
  28. ↑ "Games & Rides" (PHP). Chuck E. Cheese's Official Site. CEC Entertainment, Inc. Retrieved 2009-05-13.
  29. ↑ "Chuck E. Cheese Tokens". Forrest's Token Page. Retrieved 2009-03-03.
  30. ↑ S., Travis. "CEC Token Cards" (CSS). Showbiz Pizza.com. Retrieved 2009-03-03.
  31. ↑ S., Travis. "Super Discount Card Poster 9Irving, TX 2006)" (JPG). Showbiz Pizza.com. Retrieved 2016-08-29.
  32. ↑ S., Travis. "Pizza Time Theatre: Stage Shows" (CSS). Showbiz Pizza.com. Retrieved 2009-03-03.
  33. ↑ "Pizza Time Theatre Program" (PDF). ATARI, Inc. 1977. Retrieved 2009-03-03.
  34. ↑ "Pizza Time Theatre Balcony Show Photograph #1". 1981. Retrieved 2009-03-03.
  35. ↑ "Pizza Time Theatre Balcony Show Photograph #2". 1980s. Retrieved 2009-03-03.
  36. ↑ "Chuck E.'s New Look" (PDF) (Press release). Garner Holt Productions. 1998. Retrieved 2009-03-03.
  37. ↑ "Our Promise to Parents". Chuck E. Cheese's.
  38. ↑ "Birthday Parties" (PHP). Chuck E. Cheese's Official Site. CEC Entertainment, Inc. Retrieved 2009-03-03.

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