California Pizza Kitchen Co-Founder Critiques Business Climate in California

Washington DC, United States Jul 19, 2026 ALN: California Pizza Kitchen (CPK), co-founded by Rick Rosenfield and Larry Flax, has been a prominent player in California's vibrant dining scene since its inception in 1985. Known for its innovative take on pizza and a diverse menu that includes salads, pasta, and desserts, CPK has become a beloved institution for many Californians. However, in a recent interview, Rosenfield expressed his concerns about the evolving business climate in California, suggesting that if he were to start the company today, he would opt for Florida instead of his home state.

Rosenfield's comments reflect a growing sentiment among business leaders regarding the challenges of operating in California. He pointed out that Florida's business-friendly environment stands in stark contrast to California's increasingly complex regulatory landscape. "If it were me today, I would open in Florida before I would open it in California," he stated, emphasizing the difficulties entrepreneurs face in the Golden State. His remarks highlight a broader trend of dissatisfaction among business owners who feel that California's policies have become less conducive to growth and innovation.

Historically, California has been viewed as a hub for entrepreneurship, particularly in the tech and food industries. The state's favorable climate, diverse population, and access to capital have attracted countless startups and established companies alike. Rosenfield reminisced about the early days of California Pizza Kitchen, recalling a time when he would confidently assert, "California is the greatest place to do business." This optimism was rooted in the state’s robust economy and supportive infrastructure for new ventures.

However, Rosenfield's perspective has shifted dramatically over the years. He noted that the favorable conditions he once enjoyed have deteriorated, particularly in the wake of the COVID-19 pandemic. The pandemic exacerbated existing issues such as labor shortages, increased regulations, and rising operational costs, which have collectively made it more challenging for businesses to thrive. The recent introduction of a new minimum wage law, which mandates that fast-food employees be paid at least $20.00 per hour starting April 1, 2024, is a prime example of the regulatory changes that Rosenfield believes are detrimental to the restaurant industry.

While he acknowledged that California Pizza Kitchen typically pays above the minimum wage, Rosenfield cautioned that such wage increases create a ripple effect throughout the restaurant's financial structure. Employees earning above the minimum wage often expect corresponding raises, leading to increased payroll expenses that can strain a business's profitability. This is particularly concerning given that data from the National Restaurant Association (NRA) indicates that food and labor costs account for approximately 33 cents of every dollar in restaurant sales. Additionally, other expenses such as utilities and supplies consume about 29% of sales, leaving restaurants with a meager pre-tax margin of around 5%.

Rosenfield's warning about the impact of rising labor costs is echoed by many in the industry. "Businesses don't simply eat the costs and are often forced to raise prices, thus passing the expense along to customers," he explained. This dynamic can lead to higher menu prices, making dining out less affordable for consumers and potentially driving them away from restaurants altogether. As Rosenfield pointed out, the higher labor costs in California have created an environment that is increasingly challenging for restaurateurs, many of whom are struggling to maintain profitability.

The migration of companies out of California further underscores the concerns raised by Rosenfield. Prominent corporations such as Chevron, Oracle, and Tesla have made headlines for relocating their headquarters to states with more favorable business climates, particularly Texas. According to the Texas Comptroller's Office, 157 California companies relocated their headquarters to Texas between 2015 and 2024, highlighting a significant trend of businesses seeking more accommodating environments. This exodus raises questions about California's long-term economic viability and its ability to retain businesses and entrepreneurs.

In contrast, Florida has emerged as an attractive destination for entrepreneurs and businesses alike. The Florida State Department's Division of Corporations reported that entrepreneurs filed 561,143 new domestic limited liability companies (LLCs) in 2025 alone, marking the fifth consecutive year that the state has recorded over 500,000 new LLC filings. This surge in business formation is indicative of Florida's appeal as a pro-business state, characterized by less bureaucracy and a more streamlined regulatory framework. Rosenfield, who relocated to Florida two years ago, noted his positive experiences with the state's business environment, stating, "Florida is quite friendly. There's less bureaucracy in Florida and there's more bureaucracy [in] California, and that's basically my experience."

In response to Rosenfield's critique, California Governor Gavin Newsom's office made light of the situation, quipping that "Florida Pizza Kitchen doesn’t have the same ring to it." The statement reflects a sense of pride in California's culinary heritage and the state's continued significance as a hub for the restaurant industry. Indeed, nearly half of all California Pizza Kitchen restaurants are located in California, underscoring the brand's deep roots in the state.

Despite his criticisms, Rosenfield acknowledges that California remains an economic powerhouse with many inherent advantages. "It still has the great weather, still has a great labor base, but for the restaurant business and for other businesses, it's just not as friendly," he stated. He recognizes that while starting a business in California is still possible, the increasing number of entrepreneurs are weighing their options and considering relocation to states like Florida that offer a more favorable business climate.

Looking ahead, Rosenfield hopes for a transformation in California's business climate. He advocates for policies that encourage entrepreneurship and foster an environment conducive to business growth. He expressed concern that the current political landscape, characterized by a supermajority enacting business-unfriendly laws, could deter future entrepreneurs from pursuing their dreams in California. "When you bash businesses, it's not encouraging for entrepreneurs," he concluded, emphasizing the need for a shift in mindset among policymakers.

In summary, Rick Rosenfield's critique of California's business climate serves as a reflection of the challenges faced by many entrepreneurs in the state. As California Pizza Kitchen continues to thrive, the concerns raised by its co-founder highlight the need for a reevaluation of policies that impact the restaurant industry and small businesses. The ongoing migration of companies to more favorable environments like Florida raises important questions about the future of California's economy and its ability to adapt to the changing needs of entrepreneurs. As the landscape continues to evolve, the dialogue surrounding business-friendly policies and regulations will be crucial in shaping the future of entrepreneurship in California and beyond.