The 40-year-old company also expects to grow in non-traditional locations such as airports and retail, while revisiting franchising
Few restaurant companies have experienced as much turbulence in recent years as California Pizza Kitchen.
The company amassed a significant amount of debt while sales slid prior to the pandemic. The impact of the pandemic pushed it into bankruptcy in July 2020. Several months later, an auction to sell its assets was cancelled because there were no qualified bidders. CPK then successfully emerged from bankruptcy by November 2020 and reduced its debt in the process. To re-gain momentum in 2021, the company dipped its toe into franchising, but no agreements were signed. Now, it remains a much smaller system than it used to be — about 33% smaller versus 10 years ago, according to Technomic data.
CPK president Michael Beacham, who joined the company in late 2023, is earnestly working to change the chain’s recent trajectory and believes it is the right time to do so.
“I’ve always been a fan of the brand. It’s an amazing time right now and it’s our 40th birthday in ’25,” he said during a recent interview. “I’ve had the opportunity to be with a lot of legacy brands, but this is one that still has a shine on it. People want it to win. We’re growing again in a lot of different areas. We’re doing a lot of cool, interesting things.”
Vending machines
One of those “cool, interesting things” is the addition of CPK vending machines. Beacham said this is something the company “never would have touched” five years ago because the equipment quality wasn’t there.
“This is the intersection of the right time and the right tech. The technology in foodservice equipment has come so far that now we can produce a product in 3½ minutes,” he said. “We can give you pizza or pasta that is restaurant quality in an environment where there’s a food desert. We can get closer to consumers where others can’t.”
California Pizza Kitchen has analyzed 32 different manufacturers to get this part of the business off the ground, looking at attributes such as product quality, cost, and cooking time. The company whittled the list down to two vendors — one that cooks products faster and therefore fits well into high-volume locations, and another that keeps the products frozen for longer and reduces spoilage. Both are currently in test in different locations, starting with airports.
“Airports, because of labor costs, are closing restaurants earlier than they have, but they still have a terminal full of people at 8 or 9 at night, so it’s a good fit,” Beacham said.
The potential here, he adds, is not only airports but also casinos, dorms, stadiums, business parks, and hotels. He expects to have “thousands” of CPK vending machines in the next couple of years.
“We are looking anywhere that could fit 24-hour foodservice options,” Beacham said. “Hotels aren’t getting revenue from DoorDash or Uber Eats orders. If we put a machine into a hotel and have the hotel stock and operate it while giving guests food options under $20, that’s a huge scalable model. Think about college dorms, warehouses. There’s just so much potential.
“We will analyze the machines in the first quarter and tweak what is needed as we look at a bigger rollout.”
Other nontraditional channels
That said, California Pizza Kitchen’s growth aspirations extend well beyond vending machines. Because the company exists in many different formats, from full-service to counter-service models, Beacham said the company is able to fit into several non-traditional locations.
“We brought in outside consultancy to make sure we’re in every airport (request for proposal) in the country. You’re not going to have a full-service sit-down experience at Papa Johns or a counter-service experience at P.F. Chang’s, but because we’ve been able to exist as a brand in multiple channels without conflict or confusing the consumer, we have those opportunities. We can fit any scenario and adapt our model to be appropriate for any location.”
California Pizza Kitchen is also currently “looking at how to play a part” in the fast casual space and is expecting something along those lines later this year to add even more flexibility.
Retail is also a major opportunity for CPK. The company has had a presence in the frozen pizza aisle since 1997, but Beacham believes there’s much more runway here.
“We’ve sold a lot of frozen pizzas, but we’ve only ever been in the frozen food section,” he said. “It has helped us with brand recognition, but we’re ready to migrate to different parts of the supermarket.”
That means launching products like refrigerated snacks and pizza sauce.
“We’ll expand with the same mindset to bring globally inspired culinary innovation with a flair,” Beacham said. “We are going to take a broad-based approach in how we grow the brand starting this year.”
Back to franchising
As part of that growth strategy, CPK is also returning to franchising after those previous attempts fell short. Beacham said the company should have shifted to a blended system — part franchised, part company-owned — a decade ago and believes it is the right strategy to run an efficient system. In its home market of California, CPK will remain company-owned, he notes. His goal otherwise is to refranchise 60-70% of the system in the next five years.
“Hawaii is our most successful market in the world, but we still feel like someone else could do it better because we don’t have strong local relationships with landlords, other businesses, and that understanding of the consumers and labor base,” Beacham said. “That’s our thinking about refranchising in other markets, too.”
He believes franchising will work this time because the approach is different. CPK isn’t going to wait around for franchisees to show up but rather target ideal operators with existing experience.
“We have a partner in Las Vegas with multi-brand experience, great infrastructure, capital, but most importantly, they love the brand,” Beacham said. “Their kids went to dinner with us and were talking about every item that had come and gone on the menu. That’s how you pick a partner. Franchise relationships are like a marriage.”
Because CPK is being intentional about its franchising partners, Beacham doesn’t have an expansion target that builds on its current 131 restaurants in 27 states. He is comfortable, however, with about three or four deals a year in the next six years.
“We’re not doing this to raise money or as an asset transfer exercise,” he said. “We’re doing it because we think it’s the right long-term strategy. We’re not going to mess with a good thing here. We’ve built equity for 40 years. We have to be careful who we’re handing it to.”
Contact Alicia Kelso at [email protected]
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