Chuck E. Cheese returns with trampolines and a subscription program.

In June 2020, just as some states began to lift their pandemic lockdowns, Chuck E. Cheese’s parent company CEC Entertainment Filed for Chapter 11 bankruptcy protection. It emerged months after bankruptcy with new leadership and was freed from about $705 million in debt.

Even as Covid subsided, the company faced another existential threat: figuring out how to entertain kids and their paying parents in an age of iPads and smartphones. The company has spent more than $300 million to address this challenge in recent years — and the investment is starting to pay off.

CEC Entertainment, which also includes Pascali’s Pizza & Wings and Peter Piper Pizza, has seen same-store sales increase for eight consecutive months, according to CEO Dave McClips. The company is not publicly traded, but it discloses its financial results to its bond investors.

CEC Entertainment’s annual revenue grew from $912 million in 2019 to approximately $1.2 billion in 2023. According to Reuters. And that’s with less open Chuck E. Cheese locations. China currently has 470 U.S. locations, down from 537 in 2019.

Sustaining growth will not be easy. Like all restaurants, the chain will have to win over consumers who eat less as costs rise. Chuck E. Cheese also has to capture the attention of kids and parents in a fragmented media market.

Ever since Atari founder Nolan Bushnell opened his first location in San Jose in 1977, Chuck E. Cheese’s has become a staple of many childhoods, known for its pizza, birthday parties and animatronic mouse mascot and band. is

After emerging from bankruptcy, Chuck E. Cheese and its stores underwent a makeover, giving the locations a very different look than today. Gone are the animatronics, sky tube tunnels and physical tickets of yore. Instead, trampolines, a mobile app and floor-to-ceiling jumbo trans have replaced them.

The changes come from former Six Flags executive McCallips. He joined the company in January 2020, a few months before the lockdown would temporarily close all of its locations. As of April 2021, the company has raised $650 million in bonds, which it is spending on its restaurants.

“The company was undercapitalized for many years. It was not rebuilt. It was not even touched,” he said.

Apollo Global Management took Chuck E Cheese private in 2014. Five years later, CEC Entertainment attempted to go public through a merger with a special purpose vehicle. But the agreement was terminated without any explanation.

The new cache takes a clear look at Chuck E. Cheese’s model — including his The famous animatronic bandCharles Entertainment Featuring Cheese and his friends.

McClips said, “We brought out the animatronics. It was a hot topic for a lot of the leggy bands, but the kids were using entertainment in a different way, you know, with the big screens. happening and ever-changing bite-sized entertainment,” said McKillips.

The chain also revamped its menu, upgrading to made-from-scratch pizzas. Kidz Bop becomes an official music partner. Other kid-friendly brands, such as Paw Patrol, Marvel and Nickelodeon, became partners for its games.

And then came the trampolines.

“We’ve got a wonderful opportunity for ourselves … active sports,” McClips said. He added that growth in the family entertainment category is largely coming from activity-based businesses, such as trampoline parks and rock climbing walls.

The company tested the trampoline first 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 SkyTubes or ball pits of the past, customers have to pay extra to use the trampoline. (The ball pits disappeared from Chuck E. Cheese locations in 2011, while the Sky Tubes continued for nearly another decade.)

After the company spent $350 million remodeling Chuck E. Cheese locations, McKillips now says the process is complete.

“We needed to fix the product. The product is fixed,” he said.

Reintroducing consumers to the brand — especially adults who only know the Chuck E. Cheese from their childhood — has been another focus.

“You come in around three, you leave around eight or nine and you don’t come back until 15. We had to speak to a whole new generation of kids, and we were off air during Covid. It was all about building,” McClips said.

For example, Chuck E. Cheese’s birthday business, one of the company’s best marketing tools, struggled in the wake of the pandemic. Today, it has returned to pre-pandemic levels.

And as Chuck E. Cheese begins to see a rebound in consumer spending, it has hit restaurants last year, from McDonald’s to Outback Steakhouse, as a way to appeal to the chain’s value-oriented customer. Had to pull out.

Over the summer, Chuck E. Cheese launched a two-month subscription program offering unlimited visits and discounts on food, drinks and games. Membership encouraged families to visit more frequently than the usual two or three annual visits. Subscriptions start at $7.99 per month, with additional tiers of $11.99 and $29.99 that promise more discounts and more games to play.

“In 2023, we sold 79,000 passes. This year, we sold about 400,000 passes over the same period,” McClips said, referring to 2024. “It shows that the consumer will look for value and spend if it’s getting a great. return on their spend.”

In the fall, the company followed up the success of the passes with 12-month subscriptions and has already sold more than 100,000 of them.

McKillips’ biggest dreams for the chain and its mascot lie outside the four walls of its restaurant.

“There’s another cute mouse down in Orlando that does it very well, so I see us that way, but we’re just getting started,” McKillips said.

In addition to 30 licensing deals for everything from frozen pizza to apparel, Chuck E. Cheese is also exploring various entertainment partnerships that would make its mouse mascot a major character, according to McClips.

And that’s not all. The company has considered the possibility of a game show. It has one. Awesome YouTube channelWith videos focused on his characters, not his pizza or games.

In addition, Chuck E. Cheese himself has six albums available on streaming platforms, and his band plays live, choreographed concerts.

“My dream is to be in a feature film,” McClips said.

Correction: A previous version of this story misstated the company’s current debt load and its investments to refinance its positions.