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susiiuessopew HouseApril 8, 1984 SECTION3Birthday celebrations are big attractions at Pizza Time Theatre and Showbiz Pizza Place. From left, John Moser, 10, Ken Nichonski, 11, and Chris Egan, 10, all of Barrington, munch pizza at a Pizza Time party. Right, Jim Hatlak fine-tunes an animated character atShowbiz.Pizazz-filled pizza parlors rewriting recipe for successby Pete NenmHerald stiff writerPicture yourself in a restaurant that features a cacophony of screaming children, the buzzing and bleep mg of aliens being zapped m dozens of video games and the singing of an animated rat or mechanical bear Maddening for some it was a gold mine of an idea for the owners of Chuck E Cheese s Pizza Time Theatre and Showbiz Pizza Place two of the largest chains of restaurants designed to provide a night of food and entertainment for young families An innovation in the restaurant industry, they became hot items Seemingly overnight they attracted the attention of children and investors to become darlings of the stock market — until the chill set in Falling earnings and stock prices slowed expansion* leaving Pizza Time Theatres reorganizing under Chapter II of the federal bankruptcy law and Showbiz Pizza trying to reverse its own downward slide AT THE ROOT of the problem the critics charged was oversaturation unsatisfactory food, high prices and a lack of things to hold the parents’ interest — all of which had combined to drive away customers Although both corporations have been sent reeling by the downturns, each claims to be smothering the problems The pizza they say has been improved to make it more palatable to adult tastes and the entertainment contains more music from the ’60s to appeal to parents of the baby-boom era The hope is that the changes will bring back customers, anu «n doing so show a skeptical public that the party isn t over for theme restaurants “We think there will continue to be a demand as long as there are kids,’ said Paul Pendergast senior vice president for investor relations with the Brock Hotel Corp owners of Showbiz Pizza “There s nothing quite like usThat was the notion m 1977 when Pizza Time Theatres was unveiled b Atan founder Nolan Bushnell m San Jose Calif Bushnell later purchased the restaurant s nghts and assets and resigned from Atari to become Pizza Time Theatres full-time chairman of the boardFEATURING A SMILING robot rodent named Chuck E Cheese Pizza Time Theatres was inspired by Farrell s Ice Cream Parlors and a California restaurant that featured music from a massive pipe organ The target company officials said was providing food and entertainment for young families — a market that had been largely untapped m previous years Three years later hotel magnate Robert Brock abandoned plans to become a Pizza Time franchisee and started his own family restaurant The first Showbiz Pizza Place in Kansas City Mo, featured a mechanical banjo-playing bear named Billy Bob Each restaurant cham offered animated musicalshows a video game room birthday parties and pizza as the specialty of the house To foster the family atmosphere and prevent the restaurants from becoming teen hangouts, each company adopted a rule barring children under the age of 18 from entering without an adultThe result was snowballing success Pizza Time Theatres‘went from 25 restaurants m 1980 to 266 in 36 slates and three foreign countries by 1983 — about half of which are franchises Showbiz grew to 133 company owned and 48 franchise owned outlets across the United States during the same period THE EXPANSION INCLUDED the Chicago area where eight Showbiz Pizza and two Pizza Time Theatre restaurants are operating But in 1983 -a dark cloud appeared over the theme restaurant business which had attracted a handful of small imitators and oversaturated many markets Customer traffic counts and earnings started shrinking, forcing many small firms to throw in the towel and holding down stock prices at Pizza Time and Showbiz stock market analysts saidBasically the stocks went south when the earnings went south said Michael Culp vice president and senior restaurant analyst for Prudential-Bache in New York CityCulp said he recently completed an overview report of the restaurant industry m which he traced the progress of 40 stocks since their 1983 peak prices He found that Showbiz and Pizza Time were among the biggest losers The report, he said, showed that Family Entertainment Centers a franchisee for Pizza Time, saw its stock slip to $1 from its 1983 peak of $13 Pizza Time dropped lo $5 per share a fail from a high of $27, and Brock Hotels (owners of Showbiz) was down from $11 to $7 per shareTHE MAIN VILLAINS, Culp said were poor-quality pizza and rapid growth of the chains that led to a cannibalization' of each other The video game novelty also wore off with the advent of home game cartridges, he said ’ The fact that people can find video games m hotels airport terminals, barbershops virtually anywhere, has reduced the incentive for people to go to Pizza Time or Showbiz,1 he said Noise expensive prices and a lack of diversions for adults also helped reduce the number of families that returned to the restaurants for a second visitThere’s nothing for parents to do — it's baby-sitting at one level Culp said As a result he expects to see neither chain expand during 1984, and some poorly performing outlets might be closed‘People either like them a lot of they don’t like them at all,” said Jane Wallace, vice president and editor of Restaurants and Institutions Magazines She added thatThe restaurants are the ‘in* place for tykes. Here, Chuck E. Cheese, Pizza Time Theatre’s star, talks with Mark Hampson of Hoffman Estates.when the chains do expand again, it will be at a slower rate than before “I THINK THE IDEA is a good one I thmk it s fun, Wallace said “The lesson they found was that you eouldn t expect people to come m just because of games — you need decent food too *Pizza Time and Showbiz officials agree they had problems m the past and are curtailing expansion, but they stressed there is a market for their product and they are in business to stayWhen you start a new idea — entering a new niche of the food industry — you want to grab as much as you can as fast as you can You re bound to make mistakes said Jon Porter communications manager with Pizza Time Theatres Company officials say a perception that the food was of poor quality* an oversaturation and a difficult marketing problem — adults being dragged to the rest mrant by their children — caused a rough ride through 1983 After suffering a nearly $6 million loss through the first three quarters of 1983, the deficit ballooned to a projected $16 million during the fourth quarter alone forcing Pizza Time Theatres to take refuge under Chapter 11s protection In addition 18 Pizza Time stores closed in 1983 and another 19 shut down m February Founder Bushnell resigned as chairman chief executive officer and director on Jan 31, officials saidBUT THE COMPANY has spent the past year upgrading the pizza so parents will like it more and revising the video technology robotics and music Porter said‘We want to be a restaurant where adults know they can take the family and it will be reasonably inexpensive and they can get good food ’ he said Mike Ranney, Pizza Time’s director of communications said the company also has closed one division, is negotiating to sell another and is closing stores to concentrate solely on the restaurant business We have 131 company-owned stores in place We ve got the machine there — what we ve got to do is get it to run better/’ Ranney said Company officials and franchisees — including Little Caesar’s Restaurants which owns Pizza Time restaurants in Hoffman Estates and Chicago — stressed that not all stores are having problems Lisa flitch director of marketing and public relations for Little Caesar’s, said the franchisee produces better pizza and entertainment than the corporation, which has kept profits and customer counts at a steady level in recent years She added that the Chicago stores are consistently rated among the top 15 Pizza Time franchisee-owned units in the country “WE'RE DOING WELL without the corporation and I thmk one of the important reasons why is because (Continued on Page 2)Photos by Jon KknEntertainment is also an attraction. For Liz Halat, left, and Kelly Bein, that includes romping in a pit of plastic balls.
Newspaper Details
Arlington Heights Daily Herald Suburban Chicago
Arlington Heights, Illinois, US
Sun, Apr 08, 1984
Page 19
Full Page
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