California Pizza Kitchen plans new prototype, brand renewal

Chief executive G.J. Hart says the chain aims to become again “the California pizza authority” at UCLA restaurant conference

California Pizza Kitchen is planning to build a new prototype this year that will represent the brand’s renewal efforts as it attempts to reclaim its position as “the California pizza authority,” chief executive G.J. Hart said Tuesday.

Speaking at the 16th Annual Restaurant Industry Conference hosted by UCLA Extension, Hart, who joined CPK as chief executive in September 2011 [3] from Texas Roadhouse, also hinted at new initiatives to come for the Los Angeles-based chain, which was acquired by private-equity firm Golden Gate Capital last year for $470 million [4].

Hart was among several leading U.S. restaurant operators at the conference who shared their views on the macroeconomic environment, segment trends and franchising.

Although he did not reveal details, Hart said the company planned to open only one new restaurant in the United States this year, the prototype, in Florida.

With the prototype, the chain will test the economic viability of various brand upgrades, which, if successful, could spark domestic growth in 2013, Hart said.

CPK had lost its way a bit, Hart said, adding that the chain has been inwardly focused, working on “blocking and tackling” over the past several months.

“We want to be best-in-class at what we know how to do best,” Hart said. “We were the California pizza authority once, and we will be the pizza authority again.”

Meanwhile the chain will continue to grow internationally, with 16 new locations planned overseas in 2012, although Hart did not indicate where.

Hart also said he may bring some initiatives to CPK that worked at Texas Roadhouse, where under his leadership revenue grew from $63 million to more than $1 billion over a decade.

Among them is a possible “quasi management partner” program that would align manager compensation with unit performance, “so they’ll have skin in the game,” Hart said.

CPK is also planning to test a new loyalty program that will incorporate digital and social media components.

Sustainability will also be a focus, he said.

“Since we’re a California company, we will look at every part of our business to see where we can become more sustainable,” he said.

Here are some other insights from the conference:

Economy. Ron Paul, president and chief executive of research firm Technomic Inc., and Andy Barish, managing director of restaurant equity research for Jefferies & Company Inc., gave an overview of the industry’s economic environment, painting a picture of improvement still hampered by low consumer confidence, climbing gas prices and underemployment.

Barish said industry market share within casual dining has been stolen by “haves” from the “have nots.”

Among the “haves” are brands like BJ’s, Buffalo Wild Wings, Bravo Brio and Yard House, which have thrived through the recession in part because of their focus on execution and improving the customer experience, he said.

“The haves are building a slightly better mousetrap,” Barish said.

Still showing “signs of life” are brands like CPK, Red Robin Gourmet Burgers and P.F. Chang’s China Bistro, Barish said, all of which are working through revitalization plans that could turn around sinking sales, he said.

The high-growth categories continue to be within the fast-casual segment, and coffee is growing strong, he said.

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Innovation. BJ’s chief executive Jerry Deitchle was presented with UCLA Extension’s 2012 Innovation Award.

Calling himself a “recovering accountant,” Deitchle said he had to learn how to become a “true restaurateur” after becoming chief financial officer at The Cheesecake Factory following years in the quick-service segment.

In quick service, he said, “the definition of quality was avoidance of errors. At the Cheesecake Factory, quality was sought in every aspect of the dining experience.”

As CEO of BJ’s, Deitchle took that experience to elevate the brand within the bar-and-grill “sandbox,” creating a hospitality culture that focused on good service, disciplined execution and high performance.

Most growing restaurant companies are content with the status quo, he said, “but a high performance company wants to make the business better and better,” Deitchle said. “You have to always surpass your previous best.”

Deitchle noted that if he could be born again, “I’d like to be Ted Balestreri,” owner of the Sardine Factory in Monterey, Calif., and former head of the National Restaurant Association, whom Deitchle described as “the consummate restaurateur.”

Franchising. Greg Creed, chief executive of Taco Bell Corp., and Steve Carley, chief executive of Red Robin, compared a good franchisor–franchisee relationship to a marriage.

Like a spouse, Carley said, “What I hear most from franchisees is: ‘You’re not communicating with me enough.’”

And, like a marriage, “If things are getting litigious, it’s an indicator that things aren’t going so well,” Creed added.

Creed noted that Taco Bell, a subsidiary of Louisville, Ky.-based Yum! Brands Inc., has never been sued by franchisees.

When asked, however, about franchisee lawsuits filed against sister brand KFC, Creed said the lack of a strong franchise agreement for that brand may be to blame.

“I think a strong franchise agreement is great for both the franchisee and the company,” he said.

Carley contended that when sales and profits are growing, there’s less chance of litigation.

He noted franchisees at the conference like Phil Ratnor, chief executive of Five Guys Burgers and Fries franchise group Bicoastal Restaurant Partners LLC, who said that, when his franchisor asks him to do something, “we click our heels and do it because we’re making money.”

Hospitality. Conference keynote speaker Danny Meyer, chief executive of Union Square Hospitality Group, spoke of his company’s culture of hospitality, saying it’s important for restaurant operators to remember that “humans crave opportunities to be elbow to elbow with other human beings,” despite our increasingly digital means of interaction.

Meyer compared creating a new restaurant concept to writing music: The elements of any restaurant, like musical notes, are not new in themselves, but the way they are pulled together results in something unique and authentic.

The group’s rapidly growing Shake Shack concept, for example, with 14 units, taps into an era before fast food, when people gathered to eat burgers at drive-ins or curbside burger stands.

When it comes to innovation, Meyer said his favorite motto is: “Everything has already been said, but not everything has been said superbly. And even if it had been, everything must be said freshly over and over again.”

Contact Lisa Jennings at [email protected] [6].
Follow her on Twitter: @livetodineout [7]