Dive Brief:
- California Pizza Kitchen (CPK) has signed its first major domestic franchise deal with Sundine LLC, according to a Monday press release.
- The casual chain is refranchising three Las Vegas-area stores to the franchisee, which will build an additional six stores in Nevada and Utah.
- In late 2021, CPK launched a domestic franchising program. To draw multi-unit operators into its system, it began offering refranchising of its corporate stores in 2023.
Dive Insight:
California Pizza Kitchen’s deal with Sundine marks a significant step for the chain, given its struggles to keep stores open. Its franchising program has yet to stem its declining unit count.
In 2021, roughly a year after it emerged from bankruptcy, the chain had 168 total units in the U.S., including 15 franchised stores, according to its franchise disclosure document. At the end of 2023, that number had fallen to 148 total units, including 15 franchised stores.
Sundine operates 85 franchised restaurants and retail locations, including Del Taco and Jack in the Box units, according to the press release. The operator has “deep industry experience and operational infrastructure,” CPK said.
“These strategic openings will serve as a cornerstone of CPK's domestic expansion strategy, which focuses on partnering with a select group of experienced operators in key markets,” CPK said in a press release.
According to the announcement, CPK plans to choose three or four new multi-unit operators a year and has “engaged with potential partners for markets such as Florida, the Mid-Atlantic region and along the East Coast, among others.”
The chain offers a wide range of store formats for its development partners, ranging from a 750-square-foot kiosk to a nearly 6,000-square-foot flagship location. While the chain does have some franchised locations already, they are located primarily in airports, casinos and stadiums.
Casual dining has struggled in 2024, with many major brands facing falling traffic. Red Lobster’s bankruptcy and CEO transition aside, a number of chains have closed stores and are taking measures to shore up their store bases. Dine Brands is exploring dual branded IHOP-Applebee’s units at embattled locations. TGI Fridays has closed scores of stores and filed for bankruptcy. And Denny’s is closing more than 150 underperforming restaurants.
But CPK’s ill luck might not be confined to its market segment, since pizza brands have struggled in the last year almost regardless of price point. Fast casual chain Mod Pizza closed a large but indeterminate number of stores before selling itself to avoid bankruptcy. Oath Pizza filed for Chapter 7 last month, while the parent company of BurgerFi and Anthony’s Coal Fired Pizza and Wings sought Chapter 11 protections in September. QSR Pizza has likewise suffered, with Papa Johns and Pizza Hut seeing sales slides and, in Pizza Hut’s case, the bankruptcy of a major franchisee.
