California Pizza Kitchen (CPK) is opening franchised restaurants in the U.S. for the first time as it looks to return the brand to growth.
The casual-dining chain known for its unique pizzas is looking to expand in both existing and new markets with the goal of adding about 75 domestic locations through franchising over the next five years.
Currently, CPK has 131 locations in 27 states. About 17 of those are licensed locations in airports, and it franchises internationally.
CPK President Michael Beacham, who has been with the company for about a year, said management believes that franchising is the best way to grow California Pizza Kitchen.
“We resonate with so many different age groups, so many different markets, but we’re not in enough locations to be able to reach everybody,” he said in an interview. “The best way forward for us is to have fantastic partners in parts of this country that we probably wouldn’t be investing our capital to build our corporate estates further.”
CPK’s first partner is Sundine LLC, a Las Vegas-based operator of fast-food brands like Del Taco and Jack in the Box. Sundine is buying three existing CPK locations and has agreed to build six more in Vegas and Utah, which will be a new market for the brand.
Going forward, CPK will look to add three to four carefully selected partners each year in different markets, with an initial focus on places where it already has a presence. Its home market of California, however, will remain company-operated.
CPK has tried franchising before, first in 2021, after emerging from bankruptcy, and then in 2023, when it began looking to sell existing stores to franchisees. But it never signed any agreements. The current executive team has now “fully activated and optimized” its franchising strategy, the company said.
The chain is known for its pizza, but most of its sales come from other items. | Photo courtesy of California Pizza Kitchen
The Costa Mesa, California-based chain was founded in 1985 in Beverly Hills and became known for its inventive pizzas such as the signature BBQ chicken pizza. It saw consistent growth through the early aughts but began to slow down during the Great Recession. Since 2013, both sales and unit count have declined by about a third, according to Technomic data. Last year was a particularly difficult one for the chain, as sales fell 10% and more than 20 locations closed, according to Technomic.
Full-service restaurants have generally struggled in recent years due to inflation and a consumer shift toward limited service and delivery. Full-service pizza chains have had an especially hard time: Sales in that segment rose just 0.8% last year, the weakest performance within the casual-dining category, per Technomic.
Despite those challenges, Beacham said franchising has not been a tough sell. He noted that less than 30% of the chain’s sales actually come from pizza; many customers opt for its salads or other entrees.
“We don’t play in the same space as all the other pizza players out there,” he said. “That’s not our competitive set, and we don’t share customers with Pizza Hut and Domino’s and Cicis or the rest of them.”
Additionally, about 30% of CPK’s sales are from off-premise, a high rate for a full-service chain. That includes delivery, pickup and catering.
Still, Beacham said CPK is making some changes to adapt to a grueling environment for casual dining.
Many of its new restaurants will be smaller, for instance, which should keep costs down and create more real estate opportunities. But they will still have a full-service format, including a bar.
Beacham also said the brand will focus on menu innovation, which has always been part of its DNA. And, in a recent effort to boost sales, corporate locations have begun selling food from Man Vs. Fries, a delivery-only virtual brand with a large following in California. The virtual brand will be optional for franchisees.
CPK’s renewed growth push won’t just be limited to franchising, either. Beacham said the brand plans to open in more airports and expand its line of frozen pizzas, among other initiatives.
“I think you’re gonna see over the next year us emerging in a lot of different ways,” he said. “In our mind, it’s not a comeback, because we haven’t gone anywhere. But we do know this brand is in tremendous growth mode right now and we’re very excited about the next couple years.”
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