Ds had one for his 6th birthday and the children all thoroughly enjoyed it. They basically organised them and got them playing a few games in that cheesy BAB way whilst they made their bears. She kept their attention well and they loved it.
I did cake and sandwiches at home first. Other option for us would have been Mcdonalds.
BaB where we are is easy walking distance of several meal options. McD's and Pizza Hut do birthdays with 10% discount on production of your BaB receipt here.
Kids love the party. DD went to one where the parent also did party bags. I felt a nice bear with T-Shirt was more than sufficient. When we did ours we set a budget (was a bit tight) so they had a choice of only a couple of (cheapest) bears and a T-shirt but they all seemed happy enough.
Probably too late for the op, but will put here in case anyone searches in the future. We bought some kits to do at home, they were indeed £5.50 and we made the food. I did a party bag as well, just very cheap stuff, because I thought well some people buy kids entry to a soft play centre for more than a fiver and they get party bags, and in my experience kids still want party bags - and I didn't give the bears a t-shirt. Before any bags appeared, several kids asked for a party bag, while clutching their bear. Whether we want to reward that enterprising spirit or not, it is indicative of their expectations.
Mine was for 5 and 6 year olds and almost NO ONE could do their bear on their own. Some were spectacularly bad at it, and just sat there piles of the puff going 'I can't do it'. The bear stuffing didn't take as long as people said it would because they got bored. There were too many questions at the 'wish making' moment, very few of which I could answer, because I had not really thought through the 'wish making' magic, believing it to be straightforward and unlikely to be probed. Many of the kids tried to close their bears themselves and messed up the zip closing mechanism a bit. The puff got everywhere.
Because some played with theirs and put them down and walked off, there was a good chance people did not go home with the bear they stuffed. As soon as you can, write the names on the label that can't be ripped off. They rip off the other labels, you can't stop them. Have good pens for the adoption certificate, washable felt pens don't always work on the sheeny card, some of the colours do, some don't.
Although they suggest games, small girls anyway are happy to disco dance holding their new bears, if there are balloons to kick around.
I thought the kits themselves were terrifically good value and it was a great party idea. The above is just a list of what needs a little preparation.