Chuck E. Cheese has invested $300 million into modernizing the brand and bringing fun to a new generation after coming out of Chapter 11 bankruptcy in 2021.
Flexibility is essential to achieving longevity in franchising, as is the deployment of new tactics to maintain a brand’s relevance.
Chuck E. Cheese is in the midst of a modernization effort after emerging from bankruptcy in December 2020 and shuttering numerous stores. It had nearly 600 total locations at the start of 2020 and today its unit count sits at about 400 in the United States and another 84 in international markets.
“I’ve transitioned and worked with Chuck E. Cheese at a great time,” said Mario Centola, executive vice president and chief operating officer of international and franchise operations at CEC Entertainment, parent company of the family entertainment concept. “The revitalization of the brand was taking root post-COVID, so it was a really good time to start with the organization.”
Joining CEC in 2022, Centola is focusing franchise growth efforts outside of the U.S., but the changes to the brand are universal.
CEC is undertaking a $300 million remodel initiative that includes the removal of what for decades was a mainstay of the pizza and arcade chain: the animatronic band, Munch’s Make Believe. (Horror movie “Five Nights at Freddy’s,” which follows a security guard at Freddy Fazbear’s Pizza defending themselves from hostile animatronic characters, was coincidentally released last year around the time CEC made its announcement. The company has said the movie didn’t impact its decision.)
The animatronic bands are being replaced with dance floors featuring Chuck E. Cheese characters and music.
Instead of stiffly moving robot puppets, Chuck E. Cheese is embracing technology and new representations of the band in and outside its units. Digital dance floors will replace the bands, featuring music videos of the characters instead of the oversized performers themselves. The company also continues to push consumer packaged goods, with its branded pizza available at Kroger and Walmart stores, along with other select grocers.
As kids entertainment trends have shifted to active play, Trampoline Zones are being installed at dozens of U.S. locations. Arcade games, meanwhile, remain a key feature.
“We’re in the business of creating lifelong memories for everyone who walks through our doors,” said Centola. “In many ways, we have really held true to what made Chuck E. Cheese a memorable experience for you and for me growing up.”
Most U.S. Chuck E. Cheese units are company owned, though a few franchised locations remain. The brand is pursuing master and multi-unit franchise expansion globally, with a focus on Southeast Asia, Europe, India, China, Japan, and parts of Latin America, the Middle East and Africa. Recent international openings include Egypt, at the Royal Park Mall in Sheikh Zayed City, and Kuwait, within Al Muhallab Mall in Kuwait City.
Twist Brands enhances activities as part of reboot
Formed in November 2020 when Painting with a Twist acquired Color Me Mine and supplier Chesapeake Ceramics, Twist Brands was already seeing growth slow for its paint-and-sip franchise prior to the pandemic. Closures followed.
Painting with a Twist started 2020 with 288 units, a number that by the end of 2023 had fallen to 220. Color Me Mine, a paint-your-own pottery concept, has likewise seen its store count dip, from 137 in 2020 to 121 at the end of last year. Those declines necessitated a strategy shift.
“We looked at the system bottom-up and evolved the system with our franchisees,” said CEO Todd Owen. “We had a huge opportunity during daytime hours, and we studied that for other crafts.”
Twist Brands is adding day-time activities to increase sales during less popular hours, such as candle making and pottery.
Like CEC, Twist found that sticking with the roots of its brands and adding new activities was the way to rejuvenate sales. Adding the paint-your-own pottery from Color Me Mine and candle pouring from the acquisition of Bottle & Bottega in 2018 rekindled interest for customers.
New programs, such as “Pop in and DIY,” became a way to spur activity during otherwise slow daytime hours. Seventy-five percent of business happens in the evening and on weekends, Owen said, so filling this quiet time has been a major profit boost. It’s still in its infancy, and Owen estimated the company is in phase three of the program’s full rollout.
Average gross sales for Painting with a Twist hit $251,747 in 2023, up from $239,796 the year prior, and its unit count remained stable. The AUV for Color Me Mine was $443,436 in 2023, up from $361,833 in 2022.
“The numbers are really strong, so we’re really excited about it,” said Owen. “I need to credit our marketing team.”
Pita Pit undergoes rebrand as former CEO returns
When CEO Peter Riggs and partners Jack Riggs and Robert Fasnacht sold Pita Pit USA in late 2018, the brand had 250 units.
“However, a little over a year later, COVID hit, and the buyer defaulted on payments as the franchisee count declined to under 100 locations,” said Riggs. “On March 7, 2023, the buyer returned all assets back to us.”
The Mediterranean pita sandwich concept now has 75 locations. Average gross sales in 2022 ranged from $188,546 for the bottom quartile of franchise stores to $579,484 for the top quartile.
Peter Riggs returned to Pita Pit after the brand dropped to less than 100 units to revitalize it. He’s sticking to the brand’s roots while adjusting to new demands and inflation.
The return of assets also meant the return of Riggs as CEO and a brand refresh under Pita Pit USA 4.0 Inc. after the 2018 buyer’s companies dissolved due to the default payments. (Pita Pit USA operates separately from Pita Pit Canada and Pita Pit International, which are owned by Canadian platform company Foodtastic.)
Since then, Riggs has been hard at work revitalizing the brand, starting with the menu.
Food preferences are always evolving, and keeping up with trends can prove to be a make-it-or-break-it move for restaurants.
“That can be a challenge for a brand, especially recognizing the right time for it,” said Riggs. “Throw that on top of things like COVID and other things we’ve gone through in recent years, it really upends your current way of thinking.”
Quality and consistency remained essential, even as ingredients became more expensive, so the team came up with a solution: make a cheap “hearty snack” item in the Greek Grilled Cheese. Filling price gaps gives customers options without simply adding another $10 to $12 sandwich, said Riggs. Depending on the market, the Greek Grilled Cheese is priced between $6.95 and $8.89.
With third-party delivery remaining popular with consumers, Pita Pit is shrinking its footprint and orienting itself to meet that demand. Locations can now operate in spaces as small as 400 square feet. The brand is advertising its catering options to drive sales from additional channels beyond the typical lunch daypart.
“There’s a lot of a lot of excitement about Pita Pit coming back to areas where we haven’t been for a while,” Riggs said. “We’re getting a lot of positive feedback and a lot of excitement about the new menu, the new operations plans and some of the prototype stuff that we’ve been showing the public.”
Pita Pit this month announced the promotion of longtime employee Meghan Haugen to chief operating officer. With the brand for nearly two decades, Haugen was the director of operations and also held training and development roles during her tenure.