In the pilot SpongeBob explains what has happened in the past five years, first the Krusty Krab 2 had to be shut down due to funding (also demoting SpongeBob back to fry cook at the first krusty krab), also the Chum Bucket has been completely destroyed, also in the five years Mermaid Man has passed away, but the biggest change was that Squidward moved away to focus on his music career. This also means that Mr. Krabs now works the cash register. So now it's just SpongeBob and Mr. Krabs and that is when the rest of the series will begin with new adventures for SpongeBob and his friends.