California Pizza Kitchen played a significant role in bringing California’s dining culture to people nationwide for decades. Now, over 40 years later, one of its co-founders reflects on the current business climate.
Changing Business Landscape
Rick Rosenfield, a co-founder of California Pizza Kitchen, shared with Fox News Digital that if he had to start over today, he might choose a different state. “If it were me today, I would open in Florida before opening in California,” he stated, emphasizing Florida’s business-friendly climate compared to California’s.
Rosenfield recalled that when he and Larry Flax started the restaurant chain, California was perceived as a great place for business. He noted, “We have 365 days a year of great weather, a great labor base, and strong demographics.” However, the business environment has shifted dramatically. Several major companies, including Chevron, Oracle, and Tesla, have relocated their headquarters out of California recently.
Impact of Rising Costs
The COVID-19 pandemic contributed to the changes in California’s business environment, with labor shortages, increased regulations, and rising costs being prominent challenges. In April 2024, California’s new minimum wage law required fast-food employees to earn at least $20 per hour. While California Pizza Kitchen typically paid more than the minimum wage, Rosenfield noted that such increases can lead to further wage expectations from higher-paid employees.
Data from the National Restaurant Association (NRA) indicates that food and labor costs account for about 33 cents of every dollar in restaurant sales, with other expenses like utilities and repairs taking up another 29%. This leaves an average pre-tax margin of around 5% for restaurants.
“The mantra is, ‘We’re going to tax businesses.’ But the customer ultimately pays more when businesses raise prices to cover increased costs.” — Rick Rosenfield
The Appeal of Florida
Rosenfield mentioned that challenges in California have made Florida attractive for business startups. In recent years, Florida has seen strong growth, with 561,143 new domestic limited liability companies filed in 2025. Axios reports that Florida had the third-highest rate of new business applicants per 1,000 residents in 2023.
Although Rosenfield praises Florida’s business environment, he acknowledges that California remains an economic powerhouse. “It still has great weather and a great labor base, but it’s just not as friendly for businesses anymore,” he said.
Hope for Change
Rosenfield hopes California will become more business-friendly again. He believes government policy significantly affects a state’s ability to nurture entrepreneurship. According to Rosenfield, failing to support businesses could dissuade the next generation of entrepreneurs.
Rachel Wolf is a media and culture reporter for Fox News Digital.