California Pizza Kitchen brought the Golden State’s dining culture to Americans across the country for decades. More than 40 years later, one of the chain’s co-founders says that if he had to start over, he wouldn’t necessarily pick California.
“If it were me today, I would open in Florida before I would open it in California,” California Pizza Kitchen co-founder Rick Rosenfield told Fox News Digital. “I think it has a lot going for it. The difference is [it’s] very business friendly and California is less business friendly today, and they make it apparent.”
Rosenfield said that when he and California Pizza Kitchen co-founder Larry Flax started the restaurant chain, the business environment in California was “really good.” In fact, Rosenfield told Fox News Digital that decades ago he would’ve said that “California is the greatest place to do business.”
“We have 365 days a year of great weather. We have a great labor base, great demographics, great densities. And people would say, ‘What keeps you up at night?’ I would say, ‘A snowstorm in the winter on a weekend for the malls,’ right? That’s not true today,” he said.
Several major companies have moved their headquarters out of California in recent years, including Chevron, Oracle and Tesla. The Texas Comptroller’s Office recorded 157 California companies that relocated their headquarters to the Lone Star State between 2015 and 2024.
Rosenfield said California’s business climate changed dramatically following the COVID-19 pandemic, citing labor shortages, increased regulation and rising costs, including the minimum wage. Under a minimum wage law that went into effect in California on April 1, 2024, all eligible fast-food restaurant employees had to be paid at least $20.00 per hour.
The California Pizza Kitchen co-founder said the restaurant typically paid employees more than the minimum wage, but argued that increases to the wage floor still cause a ripple effect throughout the restaurant, as employees earning above the minimum would often also expect raises as well.
Rosenfield noted that restaurants often operate on thin margins, something that is backed up by data from the National Restaurant Association (NRA). According to the NRA, food and labor costs account for around 33 cents of every dollar in restaurant sales. At the same time, other expenses, such as utilities, supplies, repairs and credit card processing fees, among others, represented approximately 29% of sales combined. The NRA states that the average restaurant is often left with a pre-tax margin of around 5%.
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