Studio Movie Grill’s theme throughout its bankruptcy process has been to survive, revive and thrive — and filing for Chapter 11 bankruptcy in October was part of its survival, said founder and chairman of the board Brian Schultz.
The company has been flirting with revival since then, he added.
Now, since it filed its plan for reorganization earlier this month, its path to emerging from bankruptcy is one step shorter, pending its confirmation by the U.S. Bankruptcy Court for the Northern District of Texas in March.
Schultz, who founded the company in 1993, said the bankruptcy process has been an “emotional rollercoaster,” but that it will, in the long term, create the conditions needed to save more jobs and be more successful in the future.
He said filing for Chapter 11 allowed the company to reset, especially where it was needed on some lease and contractual obligations. While the company is hoping to keep as many of the theaters and jobs as possible, it’s still in negotiations with landlords, though Schultz said the specific locations under discussions are sensitive information.
Since Hollywood studios have put a pause on film releases, it’s tough to have a productive movie theater, Schultz said. But just because movies aren’t coming out doesn’t mean real estate costs or taxes change.
It’s a catch-22, he said. It’s difficult for theaters to stay open while movies aren’t coming out, and it’s tough for films to come out when there aren’t operating theaters.
“I kept on holding out hope that more films were going to be distributed,” Schultz said. “As more and more movies fell off the schedule, it became inevitable. Our decision was to file (for bankruptcy) as early as possible so that we can emerge as quickly as possible.”
One of the bigger challenges throughout the process, Schultz said, is having to change agreements with vendors Studio Movie Grill has worked with for nearly 30 years. He said it feels like letting down friends and, like he was losing control.
He added the business has to remain centered on the things it can control, which for Studio Movie Grill, is working to maintain jobs and keep employees and customers as safe as possible.
“As a business owner for so long, you think that you can control the outcomes or make adjustments or decisions,” Schultz said. “But when you’re forced to be closed for eight or nine months, it’s really hard to manage your way out of that situation.”
He said that with the remaining 19 theaters Studio Movie Grill still has open, it’s made many changes to account for the COVID-19 pandemic, including touchless ticket buying, updated HVAC systems, streamlining menus and quicker payout through innovations like automation. The chairman of the board said guest and employee safety — physically, along with mentally and financially — is the company’s priority.
The theater chain went from 7,200 employees to, at the lowest, 44 employees and is now at around 400 folks. Schultz said Studio Move Grills still has 19 operating theaters out of an original 34.