Chuck E. Cheese revamps its business model, attracting budget-conscious families with subscription services and upgraded venues.
IRVING, Texas — This story was originally published by our content partners at the Dallas Business Journal. You can read the original version here.
Chuck E. Cheese was a staple of many a childhood — many possess fond memories of the animatronics, arcade games and cheesy pizza.
The company entered troubled waters when the coronavirus pandemic tore down sales at the entertainment restaurant that depends on face-to-face interactions with customers. Parent company CEC Entertainment Inc., which also owns Peter Piper Pizza, filed for Chapter 11 bankruptcy protection in June 2020. Executives cited financial strains relating to the pandemic as the cause of bankruptcy.
CEO David McKillips took over the Irving-based chain in January 2020, just weeks before the pandemic arrived. Four years later, McKillips has led Chuck E. Cheese to a stunning brand revival, reforming the company’s business model and services that it provides.
Since 2021, Chuck E. Cheese has spent $350 million upgrading the restaurant experiences to appeal to more budget-conscious consumers, McKillips told CNBC Jan. 22. The CEO reported seeing a tremendous demand for affordable entertainment options from low-income families.
Last summer, Chuck E. Cheese rolled out a monthly subscription program with tiered options, offering discounts on games, drinks and food. The first tier costs $7.99 per month, offering unlimited visits and up to a 20% discount on food. Additional tiers are available at $11.99 and $29.99 per month, each providing higher food discounts and additional games subscribed visitors can play.
“It’s all new for us,” McKillips told CNBC.
At the same time, the brand tested a 12-month pass. In 2023, the brand sold more than 79,000 passes across nearly 600 locations. In 2024, it sold more than 400,000.
In addition to changing up its business model, the company has invested in a complete makeover of every Chuck E. Cheese storefront. Outdated animatronics were replaced with floor-to-ceiling jumbotrons with live character programs, trampoline zones were added and new merchandise was purchased.
“We’re catering to a brand new generation of kids who are growing up and consuming entertainment in a different way,” McKillips told CNBC.
The business is exploring ways to license and franchise iconic Chuck E. Cheese characters, potentially creating television shows to further pad revenue.
A component of Chuck E. Cheese that’s enjoyable for all ages is its scratch, made-to-order pizza. The company began a delivery and carry out service for its food, alongside an all new menu including “grown-up” options.
McKillips, a winner in Dallas Business Journals’ 2023 Most Admired CEOs program, told CNBC that while CEC Entertainment may explore going public one day, right now the focus is on deploying its membership program after years of testing. He’s also looking to expand the company globally, adding to its list of 18 countries it already does business in.
