When David McKillips joined Chuck E. Cheese as CEO in January 2020, he noticed a brand that was capital-deprived, not upgraded, and tired.
The COVID pandemic arriving two months later didn’t help. Venues nationwide were forced to shutter, and without foot traffic, Chuck E. Cheese’s sales tanked and the company sank into bankruptcy.
However, the tough transition didn’t change the fact that Chuck E. Cheese remained the biggest player in the eatertainment segment and boasted a nearly 50-year legacy. All it needed was the proper attention and investment.
The most important part was keeping general managers in place. The chain paid them full salaries during COVID and 85 percent of their bonus. So when locations reopened in 2021 and 2022, they could do so with the same people at the highest level. Currently, turnover is less than 20 percent, which is “really unheard of in this industry,” McKillips says.
The second part was fixing the product—remodeling restaurants, updating the menu, and creating traffic-driving value offers. Starting in 2021, Chuck E. Cheese used a $350 million investment to not just revamp facades and decor, but also implement a complete technology overhaul from digital menu boards to kiosks, pager pickups, floor-to-ceiling jumbotrons, and digital dance floors. Last year marked the completion of the brand transformation, with 460-plus locations now remodeled.
“When we were just starting the remodel process, it was in pockets of the country,” McKillips says. “Some pockets were upgraded, but others weren’t. We weren’t able to come out like we do today. We can now say that Chuck E. Cheese is completely upgraded coast to coast. So that that’s been terrific.”
Chuck E. Cheese also wanted to expand beyond its reputation for pizza and games to become a multi-activity destination. Toward the end of 2023, the brand tested a trampoline in Brooklyn and found that it drove guest satisfaction and incremental sales. The company spent 2024 installing trampolines nationwide. On top of that, Chuck E. Cheese is adding Ninja Run obstacle courses featuring climbing walls, balance beams, slides, and other challenges. Together, the Trampoline Zone and obstacle courses are called Adventure Zone, scheduled for a nationwide rollout throughout 2025.
In the roughly 60 locations with an Adventure Zone, Chuck E. Cheese is seeing lifts in average check and visitation.
“What’s important is that we’re now moved from a once or twice visit a year to a multi-visit platform,” McKillips says. “We needed to invest in new games, new active play, just multi-activities because Chuck E. Cheese for years was built on I’m going to come for a birthday, I’ll get one visit, and maybe another half visit. So it was 1.5 to two visits a year.”
The menu required a refresh as well. Chuck E. Cheese’s primary customers are 2 to 12 years old, but it understands those children are brought by parents, grandparents, aunts, and uncles who are hungry too. Also, it kept in mind that the brand overindexes with Hispanic and African American customers. The brand used learnings from its previous Pasqually Pizza & Wings ghost kitchen concept to create more diverse, mature products that appeal to older generations. Some examples: Homestyle BBQ Chicken Pizza, Signature Meatball Pizza, Saucy Meatballs, and eight different wing flavors.
“The grownup menu is going to feature pizzas that are spicier, that have jalapeños, have chicken, have onions, have the ingredients, a base on it that is going to appeal to not only a multi-generation but multi-ethnicity as well,” McKillips says. “So that’s been fun for us.”
Another step was creating a membership package that appealed to cash-strapped guests and encouraged them to visit more often throughout the year. The result was Chuck E. Cheese Fun Passes, which allow customers to come an unlimited number of times across two months (paid as a one-time upfront fee) or for a full year (paid in monthly installments). The membership is tiered as Bronze (40 games per visit, 20 percent discount on food and games), Silver (100 games per visit, 30 percent discount on food and games), and Gold, (250 games per visit, 50 percent discount on food and games).
Chuck E. Cheese has sold more than 400,000 of these Fun Passes, and the math works out favorably. The buyer of a two-month pass is worth 2.5 times the value of a one-day visitor. The buyer of a 12-month pass is worth six to eight times the value of a one-time visitor annually.
Thanks to the improvements, the chain has seen positive same-store sales in eight of its past nine months.
Chuck E. Cheese’s newfound brand consistency gives it opportunities to re-market itself nationally. It’s established partnerships with Buddy V’s virtual dessert concept, Kidz Bop, and the Harlem Globetrotters. Beyond the four walls, the company sells frozen pizza at Walmart and a birthday cake celebration flavor in partnership with Rite Aid’s Thrifty Ice Cream brand. Additionally, with an upgraded digital footprint, it can swiftly switch out its entertainment content for the holidays or any other special occasion.
The brand receives thousands of guest satisfaction surveys each day that measure birthday scores and traditional guest satisfaction, and responses show customers are happy with the remodels and simplification of the menu.
The brand is now at the point where it can create new first impressions with young children. The same goes for customers who grew up with the brand but haven’t visited in years.
“It’s an all-new experience for them and for those that are coming back for the first time, young parents, who haven’t been exposed to our brand in 15 years,” McKillips says. “If you leave when you’re 8, you don’t come back until about 15 years later until you have your own children, so it’s a whole new experience. We’re really proud of it. We’ve got a great buzz in the marketplace, a lot of competition out there now with new entertainment and entertainment concepts. But what we’re really focusing on is staying in our lane. We want to be the absolute best and most desired destination for kids 2 to 12 years old. With the best scratch-made pizza, the best games, the best entertainment, the best partnerships.”
