Designer pizza at off-the-rack prices - success of innovative pizzeria chain California Pizza Kitchen

Nation's Business, March, 1991 by Michael Barrier

To finance that infrastructure, Flax and Rosenfield sold private placements of stock they now own 60 percent of CPK, compared with the 92 percent they owned when they started. But that 60 percent is of course worth many millions of dollars--and, because Flax and Rosenfield expanded through equity financing, CPK has less than $1 million in debt, and it has a cash flow more than adequate to finance rapid growth. CPK franchised one restaurant in Las Vegas and started three others as joint ventures (two, in Chicago, with Rosenfield's brother), but the company is unlikely to use either method again.

Flax and Rosenfield do plan to take their company public within the next few years, even though they don't need to do that to raise capital. "It's a very tempting public concept," Rosenfield says. "California Pizza Kitchen is one of those unique businesses that people walk into and want to own a piece of."

Neither man plans to use going public as the occasion for cashing out of CPK. Says Flax: "It would kill me to sell now for $100 million and sit on the sidelines and watch somebody else either destroy it or do great with it."