It operated as a non-profit organization, received funding from donations, as well as profit from museum tickets, gift shop sales, and Hug Club membership.

The museum started when Frances Pew Hayes received a small M&M's teddy bear from a grandchild.

Reasons included rising operating costs, a lack of volunteers, and flat admission numbers.

The museum contained various exhibits, such as a Teddy Bears' Picnic, a parade, a wedding ceremony, a "beard of directors", and collections from around the world.

It was usually held in October and consisted of various activities, such as games, performances by bands and groups, and petting zoos.