<P> Chuck E. Cheese's Pizza Time Theatre was founded by Atari founder Nolan Bushnell, who was seeking to expand the purview of video game arcades beyond more adult locations like pool halls to a child - and family - friendly venue . Bushnell's experience in the amusement park industry, as well as his fondness for the Walt Disney Company, were influential in the conceptualization of the Pizza Time Theatre concept . The first location opened in San Jose, California, in 1977, and was labeled as the first family restaurant to integrate food, cheap animated entertainment, and an indoor arcade . In 1978, Bushnell purchased the Pizza Time Theatre concept from Atari's then - corporate parent, Warner Communications . Gene Landrum then resigned from Atari and was made President and Chief Operating Officer of Chuck E. Cheese's Pizza Time Theatre . </P> <P> Bushnell has said of his decision to open a pizza restaurant, "It was my pet project...I chose pizza because of the wait time and the build schedule: very few components and not too many ways to screw it up ." After finding out from employees working on the animatronics that the costume he bought was a rodent rather than the coyote he thought he was buying, Bushnell says he suggested changing the name of the establishment from the planned "Coyote Pizza" to "Rick Rat's Pizza". Marketing people disliked that and proposed "Chuck E. Cheese" instead, which is what was used . </P> <P> To expand beyond California and the west coast, Nolan began to franchise, resulting in a co-development agreement between himself and Robert Brock of Topeka Inn Management in 1979 . The agreement handed Brock exclusive franchising rights for opening Pizza Time Theatres in sixteen states across the Southern and Midwestern United States, while also forming a company subdivision, "Pizza Show Biz", to develop the Pizza Time Theatres . </P> <P> In November 1979, Brock met Aaron Fechter of Creative Engineering, Inc . Concerned that Fechter's animatronics would be too strong a competition for Bushnell's work, Brock requested that Bushnell release him from the co-development agreement, citing misrepresentation . In December 1979, Brock and Fechter formed "Showbiz Pizza Place Inc", severing Brock's business relationship with Bushnell . ShowBiz Pizza Place was conceptually identical to Pizza Time Theatre in all aspects except for animation, which would be provided by Creative Engineering . Showbiz Pizza Place opened its first location on March 3, 1980, in Kansas City, Missouri . </P>

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