hi there it's your old pal chuck e cheese chuck e cheese's files for chapter 11 bankruptcy back in
june citing the pandemic as the main reason however things hadn't been going very well
even before that point where did things go wrong what happened well let's get the lowdown on the
top 10 untold truths of chuck e cheese's decline recycled pizza oh wow eco-friendly good there had
been unfounded conspiracy series circling around for years that chuck e cheese recycled their pizza
took uneaten slices reheated them and added them to new pizzas however nothing much has
come of it because as we said they were completely unfounded but in 2019 shane dawson a guy who got
famous for doing stupid stuff on youtube posted a video to his millions of followers that suggested
the rumors were true he went into a local chuck e cheese and ordered pizza the photos of his pizzas
did show that multiple slices didn't seem to match up with each other but that appeared to be the
extent of this guy's investigation but because he is a youtube star with loads of followers chuck e
cheese had to come out and make a public statement strongly denying the accusation who didn't see
anything former employees were also seen on social media rebuking the conspiracy claims
made by dawson this is noteworthy as we usually only see ex employees using social media to bash
their former employers and reveal secrets but the damage to the cheese's reputation was already done
and this hit just added to the problems the chain was already having of getting people into their
restaurants not that people went there because of the amazing pizza but even the thought of
potentially eating recycled za would be enough to keep plenty of folks from making chuck e cheese a
destination for the family never come back what does atari have to do with chuck e cheese what
is that a quarter the chuck e cheese token chuck e cheese was actually founded in 1977 by nolan
bushnell the man who co-founded the atari video game company bushnell saw that the arcade machines
he was selling to businesses for fifteen hundred dollars were raking in over thirty thousand
dollars worth of quarters over their lifetime this was the light bulb moment for bushnell who decided
to get in on the action himself and opened the pizza time theater in 1977. the restaurant had
arcade games and pizza and bushnell liked the idea of pizza because people love pizza and the
wait time for it to be ready gave customers time to play the games which is where the real money
was made do you like video games he also wanted to bring in animatronic mascots and when the intended
wolf he ordered arrived as a rat he named him chuck e cheese and the restaurant became chuck e
cheese's pizza time theater which we can all agree is much better than his original idea rick rat
pizza and no that's not a joke although bushnell had the idea and made it happen it was his company
atari that technically owned the restaurant being a division of atari the restaurant didn't actually
belong to him the good news was that the people who went on to buy atari had no interest in being
in the restaurant business so for five hundred thousand dollars they sold it all back to bushnell
and he was off and running it's still mine and i wouldn't change it for anything early competition
i am ready that first restaurant that bushnell opened in 1977 was a huge success and it didn't
take long before he was opening up a second and even bigger chuck e cheese's pizza time theater
this second location was also a success and he followed it up by opening even more locations
things were looking good for the rat so good in fact that he was receiving requests from people
who wanted to open up their own chuck e cheese franchises one of those franchise requests came
from businessman robert brock and the two men came to a deal to make it happen however soon
after signing the deal brock decided he wanted out because he wanted to partner with someone else
and open his own competing chain of restaurants which he called showbiz pizza place we broke up
there was of course a lawsuit and the result of the suit was that brock could go ahead and open
his showbiz competitor but a small portion of his profits would have to go to bushnell showbiz pizza
place was founded in 1980 and for the next three years the two entertainment restaurant chains went
up against each other in an effort to get families hard-earned quarters into their arcade machines
and not the other guys i won't let squidward win they've gone bankrupt before i declare
bankruptcy most people aren't aware of this but this recent chapter 11 filing is the second time
that chuck e cheese has gone bankrupt the first time was back in 1983 and the reason back then
was twofold the first was competition former chuck e cheese franchisee robert brock's competing chain
showbiz pizza place restaurants came at bushnell hard and in an effort to outdo each other
both chains expanded opening up restaurant after restaurant in the end this arcade restaurant
build-up came to a head at the end of 1984. it's also important to go back one year to
the big video game crash of 1983 when arcade popularity dropped dramatically remember how
good i was at that motorcycle arcade game the competition between showbiz and chuck e cheese
meant that both chains were expanding faster than they should have been and weren't doing proper due
diligence before throwing up new restaurants this led to poor decisions on restaurant locations and
a mounting debt load for both companies add to that the decline in the popularity of video
games the heart of both businesses and things weren't looking good for either chain however
showbiz was able to raise some money and refinance their loans and in doing so were
able to make it through this hard time but not chuck e cheese their money maneuvers didn't work
and in 1984 they declared bankruptcy and get this showbiz ended up buying chuck e cheese assets for
35 million dollars worth it totally worth it chuck e cheese comes back strong at first
after their bankruptcy and sale of assets in 1984 chuck e cheese was being run by the showbiz
company but at the same time they were also still running showbiz pizza restaurants as well
then in the early 1990s the showbiz company made the smart decision to merge the two chains into
one and they decided that chuck e cheese was the better brand to go with so they began the process
of converting showbiz pizza place locations into chuck e cheese's and for the next little while
things were looking up and by the year 2000 there were 300 chuck e cheese locations those years in
the 90s and the first decade of the 2000s were a definite high point for the restaurant and if you
have fond memories of chuck e cheese it's probably because you were a kid during those couple decades
but by the early 2010s things were back on the decline and sales just weren't where the company
wanted or needed them to be this led to a number of attempts to revamp and reinvigorate the brand
including in 2012 giving the chuck e cheese mascot a makeover to become a rock and roll mouse did you
know that he had actually been a rat for the first 35 years fine fine mouse fine mouse rat so much
debt that's a debt i'll never be able to repay according to the company website chuck e cheese
is an orphan who celebrates other kids birthdays in order to make up for his tough childhood as the
company entered the early 2010s they like another famous orphan found themselves living a hard knock
life sales started to drop and their attempts to revamp the brand a new rock and roll mouse more
menu items aimed at parents etc weren't having the desired effect but in 2014 even as chuck e cheese
tried to remain positive and keep the faith that the sun would come out tomorrow sales continued
to dip and that's when daddy warbucks uh apollo global management arrived to save the day or so
it seemed the company purchased chuck e cheese for 950 million dollars in a leveraged buyout this all
sounds good but with a leveraged buyout the firm making the purchase uses some borrowed money to do
so which then becomes debt on the purchased entity this ended up just adding loads more debt to a
business that had already been faltering for a few years this is basically the same situation that
led to the downfall of toys r us among others they made more changes to the brand and the restaurants
to try and revitalize the business but it wasn't enough and while they were making money the debt
was so high that they were only really able to make the interest payments but not pay down any
of the debt amount since the apollo acquisition the company has reported a profit only one year
out of the last six bob let him cry he's obsessed more changes following the purchase of the chain
by apollo global management the mountain of debt had the company living paycheck to paycheck
so in order to bring people back they made some of the biggest changes they had made in years
if you haven't been to a chuck e cheese since the 90s you might not have recognized the place
if you walked in again after the mid-2010s in 2016 they got rid of the tokens yes those tokens
the ones that many of you probably still find when scavenging your change jar looking for a few extra
bucks they replaced them with simple paypass cards and points they also finally retired the
animatronics those cute and kind of creepy things had been a part of the brand since the beginning
but now they were no more and another change one that most people probably didn't even realize
was that they changed the name to chuck e cheese what's that you say wasn't that always the name
actually no it wasn't it was in fact chuck e cheese's which harkens back to when the restaurant
was originally called chuck e cheese's pizza time theater but while the pizza time theater
had disappeared years ago up until 2017 when the possessive s was finally removed it looked like
each location belonged to mr charles entertainment cheese that really is his full name do you ever
remember someone calling it chuck e cheese's me pandemic problems stay at home the global pandemic
has been a difficult time for pretty much everyone from individuals to businesses and one of the
hardest hit industries has been restaurants while some establishments were able to transition into
delivery and pick up to make up for lost revenue due to lockdown measures that hasn't been the case
for many of them add to that the high commercial rental cost in many cities and there is no doubt
that many of these numerous restaurants will close with very little chance of reopening in the future
at least when the food is your main order of business then delivery and dine out
are viable options to maintain your financial future during these hard times i almost died but
at chuck e cheese their business model derives over 50 percent of their business revenue from
the games and about 16 of their business came in the form of children's parties both those revenue
streams require people to physically come to your locations which isn't exactly conducive
to social distancing so with the business already heading downhill the 2020 pandemic gave it a push
sending it down the hill even faster in june only about 50 percent of the chain's 560 restaurants
had reopened for dine-in delivery or takeout and by june 25th the company was 2 billion dollars
in debt and had filed for chapter 11. well we tried everything we could locations closing 0:12:08.880,1193:02:47.295 in the days not
among the available usa today also reported that the company had plans to also reject 45 leases
for those of you worried about all those chuck e cheese tokens you had been saving up well the
chain wants to honor those commitments on those little gold coins point cards etc as part of their
bankruptcy filing the company made a request to the judge that they still be able to continue to
honor credits tokens gift cards customer deposits discount offers and loyalty accounts as long as
the company remains in business now if your local chuck e cheese is one of the ones that has closed
down you might have to take a road trip in order to cash in those hoarded credits but for those
die hard chuck e cheese heads it might be worth the effort no matter how far is this the end of
chuck e cheese no way while bankruptcy sounds like it's the end of the road for chuck that may not
actually be the case chuck e cheese has come back from bankruptcy once before back in the mid 1980s
and they could come back from the almost dead again this time as well the company plans on using
the bankruptcy to offload a bunch of its debt and they are even saying they will continue to open
new locations during these bankruptcy proceedings and believe it or not the chuck e cheese brand
still has some solid name recognition and popular appeal you'd be surprised by all the youtube
videos of people going to their local chuck e cheese to look around and play the games one last
time with that in mind the wall street journal has reported that there are a number of potential
buyers circling with an interest in buying the pandemic has changed a lot though and if the mouse
does come back we are probably going to see an updated business model for the new chuck e cheese
what that looks like we will all just have to wait and see why wait for another great video just tap
that screen oh and hit that subscribe button and ring that bell to join our notification squad