California Pizza Kitchen, known for its distinct representation of the Golden State’s dining culture, has been a staple across the U.S. for decades. Reflecting on over 40 years since its inception, co-founder Rick Rosenfield provides insights into the evolving business environment.
Business Climate Shift
Rosenfield, in an interview with Fox News Digital, expressed a preference for starting anew in Florida over California. He noted Florida’s business-friendly environment contrasts sharply with California’s, which he described as increasingly unfriendly to businesses. This sentiment is shared by several major companies relocating from California to other states. For instance, Chevron, Oracle, and Tesla have moved operations to Texas, with 157 companies following from 2015 to 2024.
Impact of Pandemic and Legislation
The shift Rosenfield refers to accelerated post-COVID-19, marked by labor shortages, higher regulation, and rising costs, including a minimum wage hike. As of April 2024, fast-food workers in California must earn at least $20 per hour. Although California Pizza Kitchen often exceeds minimum wage in pay, these increases impact wage expectations across the board, affecting profit margins.
According to the National Restaurant Association, food and labor costs represent about 33% of restaurant sales, with other expenses making up around 29%. This leaves an average pre-tax margin of 5% for restaurants.
Price Adjustments
Businesses often adjust prices in response to increased operational costs. Rosenfield pointed out that taxing businesses indirectly affects consumers due to subsequent price hikes. As costs rise, businesses adapt by raising prices, transferring expenses to customers.
Competitive Edge
Rosenfield relocated to Florida, highlighting its business-friendly nature. Florida’s reduced bureaucracy contrasts with California’s, creating an attractive landscape for entrepreneurs. In 2025, Florida reported 561,143 new LLC filings, continuing a trend of strong business growth.
Governor Gavin Newsom’s office defended California Pizza Kitchen’s base, asserting pride in their headquarters and the establishment’s substantial presence in California. Yet, Rosenfield acknowledged California remains a strong economic player, albeit less friendly to business ventures.
Policy and Prospects
Rosenfield emphasized the importance of welcoming business environments fostered by conducive government policies. He urged California to renew its approach to supporting entrepreneurship.
Rachel Wolf, the author, is a media and culture reporter for Fox News Digital.