Irving-based Chuck E. Cheese, the restaurant chain that became a Mecca for children and a crucible for many of their parents, is filing for bankruptcy protection.
The restaurant chain and kids' party venue, like so many other restaurants and businesses, was hit hard by the coronavirus pandemic. Full-service restaurants lost about 80% of their average revenue at the peak of the pandemic.
Prior to that though, the company still carried nearly $1 billion in debt on their balance sheet through the fourth quarter 2019.
CEC Entertainment Inc. has since reopened 266 of its 612 company-operated Chuck E. Cheese and Peter Piper Pizza restaurants but did not elaborate on how willing parents are to again host birthday parties and other gatherings with so many cities still under tight restrictions on crowds.
It did say Thursday that it will continue to reopen locations while it negotiates with debt and leaseholders. Earlier this month the company paid out nearly $3 million in executive awards as part of key employee retention deals.
"The Chapter 11 process will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company's history," said CEO David McKillips in a prepared statement.
The service industry, which includes restaurants, has been devastated by the pandemic. This month, the Institute for Supply Management reported that the sector shrank for a second month in May.
Business News
Restaurants that can offer takeout have done so but those that rely on dining in, like Chuck E Cheese, have been hammered.
People go to Chuck E. Cheese to let children loose on dozens of video and Skee-Ball machines and other games. The company has posted a video on its webpage where McKillips talks about their commitment to health and safety.
At one point, perhaps recognizing its disadvantage, some Chuck E. Cheese locations began offering food delivery on apps like Grubhub under the alias "Pasqually's Pizza & Wings."
