Since its inception in 1977, Chuck E. Cheese has been a staple in family entertainment. It is known for its unique blend of arcade games, pizza, and the beloved Chuck E. Cheese character.
Over the past four years, the brand has undergone significant transformations, adapting to new trends and expanding its global presence. Speaking with David McKillips, CEO of CEC Entertainment, and Mario Centola, EVP & COO of international operations and Chuck E. Cheese worldwide franchise development, we delve into the exciting changes and future plans for this iconic brand.
The brand expands
We last talked to McKillips in 2020, at the height of the global pandemic. Reflecting on the brand’s journey since then, he says:
“The last four years have been an incredibly fun ride despite the challenges we faced in 2020 and 2021. The pandemic gave us an opportunity to reevaluate our business, trends, and position in the entertainment space as the largest family entertainment centre (FEC) in the world. It was a tough time, but it also allowed us to reimagine the Chuck E. Cheese experience for a new generation of kids.”
During the height of the pandemic, Chuck E. Cheese leveraged its intellectual property beyond its physical locations. It expanded into digital content, streaming music on platforms like iTunes and Spotify and licensing characters for apparel, toys, and games.
The Chuck E. Cheese characters have been entertaining audiences with their original music for the past three summers while on live tours nationwide. Weekly original entertainment content airs on YouTube and YouTube Kids, music streaming channels, and app-based mobile games. The business signed over a dozen new licensees in 2023 as it increased its licensing activities for branded goods.
“Taking Chuck E. Cheese into the digital and physical space outside our traditional walls was a strategic move. We aimed to bridge into the broader world of location-based entertainment, and our partnership with California Dreamin’ Waterpark in Northern California is a testament to that.”
CEC Entertainment and California Dreamin’ Entertainment have entered into a multi-year licensing, entertainment and marketing partnership that will see the Chuck E. Cheese brand branch out into the world of location-based entertainment for the first time.
Chuck E. Cheese and California Dreamin’
This collaboration marks Chuck E. Cheese’s first significant venture into the location-based entertainment sector. A new themed children’s area within the new Calibunga water park, formerly Raging Waters Sacramento, will include family-friendly branded water rides, slides, and splash zones.
Evolving the IP in new areas of location-based entertainment is a natural step for the iconic family-friendly brand, says McKillips. He adds that California Dreamin’ is an ideal partner:
“The first Chuck E. Cheese location was in San Jose, just an hour or so from this park. So, there was a little bit of nostalgia for us. It was a perfect place to celebrate one of the greatest intellectual properties from California.”
Steve Dooner, the CEO of California Dreamin’, is a former Chuck E. Cheese executive, which McKillips says makes this partnership even more special. McKillips himself is no stranger to the sector, having held various leadership roles at Six Flags for almost 14 years.
The two firms will collaborate on immersive branding, entertainment, and marketing elements, such as a Chuck E. Cheese-themed children’s area with water rides and attractions, an on-site arcade and branded retail shop, as well as a Pasqually’s Pizzeria Restaurant serving pizza, wings, and desserts. They will also develop cross-promotions with Chuck E. Cheese branches in Sacramento and Northern California.
In addition, visitors will be able to enjoy live appearances throughout the season featuring Chuck E. Cheese and friends.
When asked about further plans to bring the brand to life in the world of LBE, McKillips says:
“There are a lot of discussions happening in the US and around the world in terms of how we can develop the character, not only in water parks but also with theme parks and other areas of entertainment.”
Brand transformation and modernisation
One of the most significant undertakings has been the brand transformation project. This has seen over 350 locations remodelled and modernised.
“We’re close to completing the upgrade of every single location in the U.S.,” says McKillips. “These have been remodelled and reimagined, and they look fantastic. This $350 million investment has reimagined the entire Chuck E. Cheese experience.
“Our locations are now cleaner, brighter, and fully digital, with e-tickets, electronic paging, mobile ordering, and more. This year, we will have upgraded all our domestic locations. Then, Mario will be working with all of our partners to upgrade their locations around the world as well.”
Commenting on the goal of this brand transformation project, McKillips says:
“We’re the largest FEC in the world, and just turned 47 years old, it was time for us to look at the trends, the demands of a whole new generation of kids, and look at how we could upgrade and reimagine the entertainment experience.
“We spent a lot of time researching and understanding what that new Chuck E. Cheese experience would look like.”
The refreshed locations feature new interactive dance floors, video walls, and screens with audio to provide a more immersive experience. Technology upgrades include a tap-to-play game card system to replace tokens, e-tickets to replace paper tickets, contactless payments, self-service kiosks, and mobile table ordering. Innovations include floor-to-ceiling jumbotrons, new games, and an emphasis on active play, with trampolines being installed at every location.
“We’ve also debuted a new menu featuring our classic scratch-made pizza. In addition, we have a grown-up menu with bolder flavours and celebrity-inspired cakes by Cake Boss Buddy Valastro. As the number one birthday destination in the world, this was a natural evolution for us.”
Chuck E. Cheese’s global expansion
Chuck E. Cheese and its franchisees operate a system of nearly 600 FECs in 17 countries worldwide. The brand currently operates 84 locations in Latin America, the Caribbean, and the Middle East. It is actively expanding into Europe and Asia, where it is seeking franchise partners.
“We’ve seen tremendous success in Latin America and the Middle East,” says Centola. “This year, we’ve signed an agreement for Australia, marking our foothold into Asia. We’re exploring opportunities in Europe, where the market for family entertainment is underserved. We also opened our first location in North Africa.”
The firm is looking at niche markets around the world where it has identified a void for entertainment, especially entertainment gear towards kids, he explains:
“There are a lot of attractions right now targeting 25 to 45-year-olds, but we have a unique weight in targeting those under 14 and their families, and we offer them a wonderful experience. One of our niche things is that we are probably one of the most flexible brands internationally.
“For instance, we can change menu items to fit local customs. Menu items at our international locations are very different internationally than what you’re going to find in the US, and we can also change the experience in terms of what’s inside the box.”
Chuck E. Cheese: an internationally recognised brand
These international partners are also having an influence on the brand based on their knowledge of their individual locations and audiences:
“As David noted, a lot of what we are adding now in the US is activity-based and soft play. Many of our partners stepped into that space fairly early, having looked at market trends in their home countries. For instance, Chile and Mexico were some of our first markets that focused on activity-based play, and we’ve taken that up a notch globally, so our partners worldwide are more focused on that than ever before.
“You’ll see trampolines in our international locations, climbing walls, zip lines, ropes courses, and Ninja courses; we are much more of that family entertainment experience, which helps in terms of repeatability and getting people more engaged with the brand.”
One of the most recent markets is Australia, where CEC Entertainment has a franchise partnership with Royale Hospitality Group. As part of the multi-unit agreement, Perth-based Royale Hospitality will redefine family entertainment nationwide with a reimagined Chuck E. Cheese experience.
Centola says:
“The unique thing about Australia is that our engagement with our partner there came about because his five-year-old daughter was on YouTube Kids and was engaging with the Chuck E. Cheese content, and that piqued his curiosity. That demonstrates the power of the brand that we have internationally. In today’s world, with social media and the power of the internet, we can promote the brand and bring it to people around the world.”
The franchise model
The franchise model has been crucial to the brand’s global expansion:
“Franchising allows us to enter smaller markets with local partners who understand their markets and can tailor the experience to local customs and preferences. This approach has led to success in places like Trinidad and Suriname, where we might not have ventured independently.
“If we were investing ourselves, we’d probably focus on bigger, well-developed markets. But there’s a lot of opportunity in many of those smaller markets because they’re more underserved in terms of that family-based experience and entertainment than a large developed market.”
Additionally:
“You hear about large US brands going into foreign markets and not necessarily having great success in trying to lift and shift the US model. By having franchise partners who are on the ground and know their markets and the constituency in their markets, we’re able to formulate and create an experience unique to that market.”
Future directions
Chuck E. Cheese continues to innovate with new offerings like the Summer Pass program and membership options to ensure that the brand’s physical reimagination is complemented by a value proposition for today’s families, who are being challenged by inflationary pressures and still looking for an out-of-home entertainment experience.
“That’s the next generation of how we’re going to market the brand, and we’re seeing a lot of success this year,” says McKillips. “We launched the Summer Pass program, which allows unlimited visits for eight weeks for $49.99, similar to theme park passes. We’re also testing annual memberships with monthly payments in three markets, providing everyday value to families.”
Active play remains a core focus, with new activity concepts being tested and trampolines being added to all locations by the end of Q3.
The brand also emphasises inclusivity and community engagement:
“We’ve partnered with Autism Speaks to host sensory-sensitive events, debuted our birthday celebration in sign language with the American Society of Deaf Children, and are an official sponsor of Red Nose Day, helping kids fight poverty worldwide.
“It’s part of our company’s mission to be there for all kids,” adds McKillips. We’re doing it from an entertainment perspective. We’re doing it from a community perspective. And now we’re doing it from an active play perspective. So, it’s really an exciting time, probably the most exciting time in the history of Chuck E. Cheese!”
The enduring appeal of Chuck E. Cheese
Over 20 million kids have celebrated their birthday parties with Chuck E. Cheese, and 1 billion people have been welcomed through the doors of its branches. As Chuck E. Cheese approaches its 50th anniversary, the brand continues to resonate across generations.
“Chuck E. Cheese is a multi-generational entertainment icon,” says McKillips. “It is one of the most popular intellectual properties in the world. We now have four generations of families that have celebrated countless memorable moments with us, from birthdays to graduations. Now, we’re evolving the physical appearance and complementing it with new entertainment for the next four generations.
“Anyone can open an arcade, but only we can offer the unique Chuck E. Cheese experience.”
Centola adds: “We hold true to the tagline ‘Where a kid can be a kid’. For 47 years, our focus has been on entertaining kids, and that niche has made us successful. We’re excited to continue expanding and evolving the brand globally.”
With a blend of digital innovation, strategic partnerships, and a focus on active play, Chuck E. Cheese is well-positioned for continued growth and success. As it approaches its 50th anniversary, the brand’s commitment to creating memorable experiences for children and families remains stronger than ever.
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