Backlog of 7 billion paper tickets had built up in supply chain since COVID-19 closures, parent CEC Entertainment says in bankruptcy filings
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As a result of CEC Entertainment Inc.’s bankruptcy reorganization, customers can expect a more electronic mouse.
The Irving, Texas-based company, parent to the Chuck E. Cheese, Peter Piper Pizza and Pasqually’s Pizza & Wings brands, submitted plans last week to destroy more than 7 billion paper prize tickets that had built up in the family entertainment brand’s supply chain since COVID-19 closures were ordered in March.
Chuck E. Cheese had announced earlier in September it was moving to an eTicket platform at company-owned locations. Parent company CEC Entertainment filed for Chapter 11 bankruptcy protection in June.
“The debtors’ decision to accelerate the implementation of eTickets in large part was prompted by the COVID- 19 pandemic and the industry’s rapid move toward contactless service,” the company said in filings with the U.S. Bankruptcy Court for Texas’ Southern District, “addition to the debtors’ ability to eliminate the future cost associated with the use of tickets and maintenance of its ticket munchers (i.e., the Chuck E. Cheese devices that are used to collect and count tickets as guests insert them into the mouth of the muncher).”
CEC said the company’s supply chain had about 7 billion excess paper prize tickets, “which is enough tickets to fill approximately 65 40-foot cargo shipping containers.”
Because paper tickets remain redeemable, the company said it wanted to prevent them from being circulated. The company is retaining about 2,500 cases of paper tickets for use by franchisees.
Cost estimates for destruction of the tickets among three suppliers totaled about $2.3 million, court filings said.
In early September, Chuck E. Cheese had announced on Instagram that it was moving to eTickets for prizes at company-owned locations.
CEC has received $200 million of debtor in possession financing from its first-lien lenders to support the reorganization and operational expenses.
Meanwhile, the family-entertainment brand said it would continue with plans for Halloween promotions, which including a “Boo-tacular” family bundle for guests to have a Chuck E. Cheese experience at home.
The company said Chuck E. Cheese locations that have re-opened have done so with enhanced health and safety protocols, including temperature checks upon entrance, face-covering requirements, social distancing between games, contactless payments, upgraded air filters, limited indoor capacity and elimination of the paper ticket “muncher.”
CEC and its franchisees operate a system of 570 Chuck E. Cheese restaurants and 122 Peter Piper Pizza stores, with locations in 47 states and 16 foreign countries and territories. The delivery-only Pasqually’s brand, debuted in March, is offered via third-party delivery platforms.
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