Dive Brief:
- California Pizza Kitchen has launched its first-ever domestic franchising program, the company announced Wednesday.
- The full-service chain, which emerged from bankruptcy in late 2020, said it has returned to 2019 performance levels and added new international partnerships in Canada and Hong Kong.
- CPK, which has nearly 200 units across eight countries and U.S. territories, joins a growing list of chains that have increased development efforts through franchising, including Papa John's, Jack in the Box and Caribou Coffee.
Dive Insight:
CPK's trajectory has taken a dramatic turn over the last two years. Even before the pandemic, the company was working to restructure its debt. CPK was also in the early stages of selling itself before those plans were derailed by COVID-19.
After emerging from bankruptcy, CPK began to focus on global expansion, menu innovation and investing in marketing and digital enhancements. Earlier this year, the company was also reportedly considering a sale or an IPO, but instead completed a debt refinancing in the fall with a new $195 million senior secured credit facility, which will continue to support its growth efforts.
Franchising will hasten the company's current pace of development, but CPK will face significant competition for locations and attractive operators. Many other chains that survived the pandemic have begun franchising aggressively in order to take advantage of second generation real estate opportunities following the closure of about 10% of all restaurants.
CPK said it's actively expanding into new markets and is seeking franchisee partners with extensive experience in foodservice. It will offer four store design layouts for franchisees. Prospective franchisee requirements include a minimum $5 million total net worth, a minimum of $2 million in cash available for investment and a commitment of opening three to five restaurants during the first five years, according to the company's website.
CPK is also planning to sign franchising agreements in new global markets, including Abu Dhabi, Dubai, Honduras, Japan, Malaysia, Mexico, Singapore and the Caribbean.
