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Chuck E. Cheese May File For Bankruptcy Due To COVID-19 Lockdowns

The place where a kid can be a kid may be a place no more. Three months after the government shut down the U.S. economy due to the COVID-19 pandemic, the pizza and arcade franchise Chuck E. Cheese may soon be filing for bankruptcy to offset the massive losses it has incurred.
According to Newsweek, the franchise, owned by CEC Entertainment, is now nearly $1 billion in debt with 527 locations in 47 states.
“Founded in 1977, the kids party playhouse has suffered in recent years and the Coronavirus pandemic has really put a strain on their finances,” the outlet reported.  “The company apparently tried to sell pizzas under the bogus name of ‘Pasqually’s’ on Grubhub and Seamless in some regions, but that probably won’t save the entire enterprise.”
Should Chuck E. Cheese flounder, it will be the second major business to go under due to the sweeping COVID-19 restrictions that have rendered buffets, arcades, and playgrounds literally untouchable. Just last month, the popular buffet chain Souplantation, known as Sweet Tomatoes outside of Southern California, regretfully announced it will be closing all locations permanently due to the pandemic.
“The FDA had previously put out recommendations that included discontinuing self-serve stations, like self-serve beverages in fast food, but they specifically talked about salad bars and buffets,” Garden Fresh CEO John Haywood told the San Diego Tribune. “The regulations are understandable, but unfortunately, it makes it very difficult to reopen. And I’m not sure the health departments are ever going to allow it. We could’ve overcome any other obstacle, and we’ve worked for eight weeks to overcome these intermittent financial challenges but it doesn’t work if we are not allowed to continue our model.”
Following Souplantation’s unfortunate announcement, the fast-food chain Steak N Shake announced it would be closing 10% of its locations due to the shutdowns.
In March, the National Restaurant Association predicted that 11% of restaurants could be closing permanently. Hudson Riehle, the Association’s senior vice president of research, said the data shows the industry is in “uncharted territory.”
“Association research found that 54% of operators made the switch to all off-premises services; 44% have had to temporarily close down. This is uncharted territory,” said Riehle. “The industry has never experienced anything like this before.”
Celebrity chefs Robert Irvine and Tom Colicchio are in agreement that changes will have to be made if restaurants are to survive over the next few months as the lockdown restrictions ease.
“Clearly we have to come up with some hybrid model, especially for the next year,” said Colicchio. “Because à la carte dining, with the spacing that [we’ll need to implement], and knowing that most likely bartenders, waiters are going to have to wear masks… People aren’t necessarily going to be very comfortable going to a restaurant like that.”
“A restaurant, like any other business, has a break-even point, and that’s a huge thing when we come into business,” said Robert Irvine. “People need to come back to work, but it has to be done safely. We are not going back to full 300-seat restaurants. We have to let the guests know that it’s safe to come into not only the restaurant but the stores at the same time. People are going to be scared, and … we don’t know what’s going on.”

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