Chuck E. Cheese files for bankruptcy protection

Chuck E. Cheese will file for bankruptcy, the restaurant chain announced Thursday, adding that it will continue to gradually reopen locations.

The chain’s parent company, CEC Entertainment Inc., has reopened 266 of 612 Chuck E. Cheese and Peter Piper Pizza restaurants, but numerous cities and municipalities remain under tight coronavirus restrictions for dine-in restaurant service, complicating a return to the children’s birthday parties that were a major draw for the chain, The Associated Press reported.

The extent to which the chain’s business model relies on dine-in events means it has not been able to pivot to takeout service the way numerous other restaurants have during the pandemic. At one point, several locations offered food delivery through apps under the name “Pasqually’s Pizza & Wings.”

The company will continue the reopening process during talks with debt and lease holders.

“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,” CEO David McKillips said in a prepared statement, according to the AP.

The restaurant industry has been hit hard by the pandemic. A bipartisan, bicameral proposal introduced last week would establish a $120 billion fund for restaurants that are not publicly traded and, in normal circumstances, would bring in $1.5 million or less in revenue.

“We found early in this crisis that the PPP program designed for small businesses didn’t work for the businesses most impacted — not just impacted, but devastated — restaurants,” co-sponsor Rep. Earl Blumenauer (D-Ore.) said on a call with reporters on Thursday.

“When our restaurants are hurting, it means the economy is hurting,” he added.