Chuck E. Cheese's Pizza Time Theatre Logo

Creating a presentational outline titled "The Big Cheese". It was not only one of the proposed restaurant titles, but also the name the mascot rat. The name wasn't meant to be however, as it was discovered that Marriott had already trademarked the name for its own chain of restaurants. Even though the trademark was on the verge of expiring from non-usage, Atari's legal department decided a new and unique name was needed. The name "Chuck E. Cheese" was eventually chosen, as it was both alliterative of Mickey Mouse and because it was a three-smile name - just saying it forced a person's mouth to smile.

Along with refining their mascot, a group of supporting characters was also developed. Crusty, a black and white baseball playing cat; Billy "Banjo" Boggs (soon renamed Jasper T. Jowls), a hillbilly hound dog; Pasqally, the Italian chef; and the Warblettes, a trio of singing magpies. These characters were the original Pizza Time Players, and were soon fabricated into animated form by Goldbrandsen. To handle the technical side of animating the animatronics, Landrum hired Larry Emmons and the team at Cyan Engineering (often referred to as Atari Grass Valley) to design the control system to make the show work.

The first Chuck E. Cheese's Pizza Time Theatre opened on May 17, 1977 in San Jose, California. The pilot location was a 5,000 square foot former brokerage building and was the first restaurant of its kind – offering a combination of pizza, animated entertainment, and an indoor arcade. The most unique aspect of the Pizza Time Theatre was of course the animatronic show - life-sized animatronic critters that were placed in faux picture frames around the showroom and entertained guests free of charge throughout the day. The Pizza Time Theatre was as innovational as it was groundbreaking and became an immediate success. Improvements and innovations continued to be tested at the pilot store including the addition of revolving guest characters who would periodically join the animated cast to keep the show fresh - Helen Henny in August 1977, Madam Oink in February 1978, and Foxy Colleen in October 1978. Other additions included an improved pizza ordering system called "NOTALOG", developed by Bushnell's former partner at Atari, Ted Dabney.

Despite the apparent success of the Winchester pilot store, the heads of Warner Communications were disinterested in the concept. They had purchased a video games company, and were eager to shutter the restaurant so they could better focus on Atari's struggling entry into the home video game market. Warner finally sold the restaurant and concept ownership to Bushnell in June of 1978 for $500,000. Bushnell quickly incorporated the business into Pizza Time Theatre, Inc. and formed a team to open additional units. He placed himself and Chairman and immediately hired Landrum away from Atari to become President and Pizza Time's first employee. Other talent was soon secured - Greg Tilden became the Director of Technical Operations, Michael Hatcher became the Director of Entertainment, and Ray Davis was appointed Director of Engineering.

A second location was secured in San Jose on Kooser Road. This former grocery store was 19,000 square feet and nearly four times the size of the Winchester store. Containing over 100 video games, pinball machines, and other types of games, it was the country's largest pizza parlor upon opening. New attractions such as a cabaret room featuring Dolli Dimples, a piano playing hippo, and the Fantasy Forest Game Preserve (named after Goldbrandsen's Fantasy Forest company) were new additions for the Kooser store. A few changes to the cast of characters were also made, including changing out the Warblettes for the Mopsey Sisters, and swapping out Crusty the cat for a new purple monster character named Mr. Munch.

Back at Atari, Bushnell had become more and more frustrated with Warner's management and conservative market responses. They were slow to pursue new inventions such as the Atari 2600 home video game system, and Bushnell's unhappiness reached a peak in November 1978. He shortly thereafter left Atari, but the non-competitive agreement he signed 2 years earlier would come back to haunt him, as it barred him from competing with Atari in the video game world. Unable to compete in the arcade industry, his full attention became devoted to creating an empire of Pizza Time Theatre restaurants.

Bushnell aggressively began marketing the Pizza Time concept and trying to attract franchisees. Promotional paraphernalia was distributed via Pizza Time's PR firm Eesley Public Relations. In these various flyers, Pizza Time Theatre is touted as having the only computer controlled 3D animation outside Disneyland, a fact which wasn't exactly true. Regardless, the high profit yields attract several clients such as Robert L. Brock. Bob Brock, President of Topeka Inn Management (TIM), took an immediate an interest in Pizza Time as his current company was focused on diversifying their enterprises. Brock was already wealthy from being the world's largest franchisee of Holiday Inn hotels in the United States. In late June of 1979, as a way of securing an exclusive franchise deal, Brock signed a $200 million dollar Co-Development Agreement with Bushnell. This contract gave Brock exclusive franchising rights to open Pizza Time Theatres in 16 states across the Southern and Midwestern U.S. The contract included a target of 285 stores, 200 to be operated directly by TIM and another 85 to be sub-franchised. For these stores, Topeka Inn Management would be the one setting forth the capital to build each restaurant, estimated at a million dollars apiece.