Two weeks ago we told you that Chuck E. Cheese might file for bankruptcy. You can now change that might part to will.
Late Wednesday the parent company for that host of legendary pizza parties, CEC Entertainment, filed for Chapter 11 bankruptcy protection while pointing the finger at the "financial strain" from the coronavirus as the cause for the decision.
On the bright side, they've made clear their intent clear that (at the moment) they'll continue operation at a number of their restaurants, with the Peter Piper Pizza chain included in that group. Note that I forgot to mention they're also the parent company of the Peter Piper Pizza chain.
"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 and get back to the business of delivering memories, entertainment and pizzas for another 40 years and beyond," said CEC's chief executive, David McKillips, in a statement.
As you may have inferred from that quote, the next step will be restructuring the business model. According to USA TODAY, that will involve chopping debt (not what you want to hear if you work for these places) and renegotiating deals with landlords. At this point it's not clear if CEC will be closing any of their locations permanently.
As of Wednesday, CEC says they'd reopened just under half (266 out of 555) of their Chuck E. Cheese and Peter Piper Pizza restaurants. Through a PR statement, they indicated their intent to keep reopening the remaining restaurants. They also said those restaurants that have begun operating again can still be counted on for dine-in, delivery, carry-out, birthdays, and whatever else they previously did in better times.
Also notable is that there are 186 franchise-owned restaurants donning the prestigious Cheese/Piper name. Those restaurants have nothing to do with this bankruptcy, as they're run by different legal/financial structures.
The filing is part of a rise in bankruptcies that you may have seen coming but is still unfortunate to watch happen in real-time. CBS News reports that 722 companies sought bankruptcy protection in May in the U.S., which is up 48 percent from the same time a year ago.
