California Pizza Kitchen Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$1,587,000 - $5,375,000
Franchise Fee
$50,000
Total US Locations
131
Business Summary
California Pizza Kitchen franchises full-service restaurants that specialize in oven-fired "California style" pizzas, alongside pastas, salads, and a variety of alcoholic and non-alcoholic beverages. Operating under the California Pizza Kitchen and CPK brand names, these restaurants maintain a consistent image, menu, and operating system across all locations, offering innovative dishes like gluten-free and cauliflower crust pizzas.
Corporate History
California Pizza Kitchen Inc. first opened a restaurant in Beverly Hills, California, in 1985, introducing the "California style" pizza concept, including The Original BBQ Chicken Pizza. The company and its affiliates developed a unique system for operating these full-service restaurants. CPK Franchise Inc. was formed on September 1, 2021, and began offering CPK Restaurants franchises in the United States in January 2022, and internationally in December 2022.
Financial Overview
Investment Range
$1,587,000 - $5,375,000
Franchise Fee (Low)
$50,000
Franchise Fee (High)
$50,000
Royalty %
5%
Marketing %
1%
Equipment Costs (Low)
$150,000
Equipment Costs (High)
$500,000
Working Capital
$225,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The franchisor's financial condition, as noted in its financial statements, raises questions about its ability to provide services and support to franchisees. The Maryland Securities Commissioner has required a financial assurance, and all initial fees and payments from Maryland franchisees will be deferred until the franchisor completes its pre-opening obligations.
Financing Details
CPK Franchise Inc. does not offer any direct or indirect financing to franchisees. This means that franchisees will need to secure their own funding for the initial franchise fee, other fees, and all startup and operating costs. The franchisor will not guarantee any promissory notes, leases, or other obligations. Franchisees may be able to obtain financing from third-party vendors if they meet credit requirements, but CPK Franchise Inc. does not determine the terms of such financing nor does it provide any guarantees.
Performance Metrics
Total US Locations
131
Franchised Units
12
Corporate Units
119
Avg Square Footage
4,250
Franchising Since
2022
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
2
Litigation Summary
California Pizza Kitchen Inc. and CPK Holdings filed for Chapter 11 bankruptcy protection on July 29, 2020, which was discharged on March 3, 2021. Additionally, CPK Franchise Inc.'s President and Chief Executive Officer, Jeff Warne, previously served as CEO of Perkins and Marie Callender's, LLC, which also filed for Chapter 11 bankruptcy on August 5, 2019, and was discharged on January 14, 2020.
Bankruptcy History
California Pizza Kitchen Inc. and CPK Holdings filed for Chapter 11 bankruptcy protection on July 29, 2020, to reorganize their business, which was successfully discharged on March 3, 2021. Furthermore, CPK Franchise Inc.'s President and Chief Executive Officer, Jeff Warne, held the CEO position at Perkins and Marie Callender's, LLC, when that company, along with its affiliates, filed for Chapter 11 bankruptcy reorganization on August 5, 2019. The court approved Perkins and Marie Callender's reorganization plan on January 14, 2020, and the brands were subsequently sold.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew, California Pizza Kitchen franchisees must provide 18 months' written notice of their intent to renew. They must have fewer than two defaults in any 12-month period and no more than five OSHA or governmental violations during the initial term. Franchisees need to meet all renewal requirements, demonstrate the right to possess the restaurant location, ensure the lease and all licenses are current, and complete additional training programs. They must also agree to renovate the CPK Restaurant to current image standards, sign a new renewal franchise agreement (which may have materially different terms and higher fees, excluding an initial franchise fee), and sign a general release (subject to state law).
Training & Support Program
Franchisor Assistance
CPK Franchise Inc. assists franchisees before opening by providing site selection criteria, reviewing proposed sites, and approving the lease. They also provide standard building plans and equipment lists, and review final site and building plans. A management training program is offered for the Operating Principal and managers. For the first new CPK Restaurant, a new store opening team will assist with training personnel and the opening. After opening, CPK Franchise Inc. consults on operations, reviews proposed suppliers, sets reasonable price restrictions (subject to law), develops advertising programs, and administers the California Pizza Kitchen brand fund.
Initial Training Hours
480
Training Location
Virtual, at a CPK Certified Training Restaurant, or the RSC
Ongoing Support
California Pizza Kitchen franchisees and their managers are required to repeat CPK Manager Training or take refresher courses as needed to CPK Franchise Inc.'s satisfaction. CPK Franchise Inc. also offers periodic advice and consultation on restaurant operations. If deemed necessary, CPK Franchise Inc. may send personnel to a franchisee's restaurant for additional training or assistance, with the franchisee responsible for all related expenses and salaries.
Franchise Requirements
Ideal Candidate Profile
CPK Franchise Inc. seeks franchisees who will designate an Operating Principal with significant prior restaurant operating experience. This Operating Principal must be approved by CPK, maintain full control over the day-to-day operations and financial performance of the CPK Restaurants, and reside within a reasonable driving distance of the locations they oversee. Franchisees should be prepared to establish their CPK Restaurants in well-established urban or suburban markets, and their Operating Principal must successfully complete CPK Manager Training.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
protected
Territory Size Requirements
California Pizza Kitchen designates a Protected Territory around each restaurant, typically defined as a radius, but may also include specific street, county, state, or municipal boundaries, or railroad tracks. The size and boundaries are determined by factors such as demographics, population density, number of households, growth profile, competitive environment, and other commercial characteristics.
Staffing Notes
California Pizza Kitchen requires franchisees to maintain a competent, conscientious, and trained staff sufficient to promptly serve customers, adhering to specified positions and minimum staffing levels set in the Operations Manual. Franchisees are solely responsible for recruiting, hiring, training, disciplining, and terminating all employees, and for ensuring they preserve good customer relations and comply with dress code, cleanliness, and sanitation standards. No person may be put in charge of the restaurant or any department without successfully completing CPK Manager Training. Managers who complete this training are responsible for fully training the rest of the staff.