Strategy

Chuck E.'s in trouble

An alarming number of violent incidents occur at the kids' pizza chain.

“Brawl,” “murder,” and “knife fight” aren’t words you want associated with your brand if your slogan is “Where a kid can be a kid!” But that’s exactly what CEC Entertainment, owners of the Chuck E. Cheese’s pizza restaurants, have seen after a string of arrests and violent attacks attracted the media eye.

The 33-year-old establishment has spread to more than 500 locations in 48 states and six countries, and is known as a children’s birthday party haven, but some security experts say that this demographic is part of the problem. Protective parents adopt the “mama bear instinct” to defend their children in the noisy, bustling establishment, leading to confrontations between adults.

Police and politicians have attributed the violence to the alcohol served at about 70% of locations in the U.S. A Milwaukee location lost its license in 2006 after multiple brawls. In Brookfield, Wis., one Chuck E. Cheese’s location provokes more police calls than a local biker bar.

Revenues still managed to exceed expectations in the fourth quarter of 2009, at $187.6 million. But if the violence doesn’t get Chuck E., the cheese might. The company has warned that it expects to experience pressure on food and labour costs this year, with unstable cheese prices and increased payroll taxes looming.