Latest / Success Story with Scott Clary / Rick Rosenfield - California Pizza Kitchen Co-Founder | Two Federal Prosecutors Left the Courtroom and Built a $1B Pizza Empire

Transcript

Rick Rosenfield - California Pizza Kitchen Co-Founder | Two Federal Prosecutors Left the Courtroom and Built a $1B Pizza Empire · Success Story with Scott Clary

• 0:00
  You jumped into the pizza business.
• 0:02
  Why?
• 0:02
  We always wanted to be in the restaurant business, and we did.
• 0:05
  We had one idea after another.
• 0:07
  Finally, we got to the point where we said we've got to do it.
• 0:10
  When did you realize that you were right?
• 0:12
  The day we created barbecue chicken pizza.
• 0:15
  Today's guest is Rick Rosenfield, former federal prosecutor, defense attorney, and co-founder of California Pizza Kitchen.
• 0:22
  After spending years in law, Rick took the leap into the restaurant business and helped build CPK from a single restaurant into a global brand.
• 0:30
  In this conversation, he shares the story behind leaving law for pizza, finding the right people, and why partnership and ego can make all the difference.
• 0:38
  What is your secret for attracting and finding good people?
• 0:42
  We wanted to create a place where people were respected and they wanted to come to work.
• 0:47
  I think that's the key.
• 0:48
  What's the way to move past something productively when you have a disagreement?
• 0:52
  Neither of us had our egos vested in being right.
• 0:55
  If your ego says, I'm always right, and you can't accept that you could not be, you might not be right.
• 1:01
  I don't see black and white, I see gray.
• 1:04
  I'll always see the middle.
• 1:07
  My fitness pal is a success story partner.
• 1:09
  Now, there's this thing that happens when you start paying attention to what you eat.
• 1:13
  And I think we can all agree that we want to care about our health and our wellness and our nutrition.
• 1:17
  But more often than not, we just kind of think we eat clean.
• 1:20
  We think we eat healthy, but we're not really, really paying attention to every single meal and what makes up every single meal.
• 1:27
  But just by paying attention and starting to log and track what you eat, you start making better choices without really trying.
• 1:35
  And that surprised me because when I first started using the MyFitnessPal app, and I've been using it for a while now, it's a nutrition tracking app.
• 1:41
  And I started logging what I was eating.
• 1:44
  It started showing me my macros, which means how much protein, carbs, and fats I was getting.
• 1:48
  And then I started to understand why some days I felt good, high energy.
• 1:52
  Some days I felt like garbage because
• 1:54
  Those three things, proteins, carbs, fats, that's what your food is made out of.
• 1:58
  And the balance between them affects everything.
• 2:02
  So MyFitnessPal app truly changed my life when it came to managing my food, which managed and helped everything else.
• 2:10
  Now on the premium version of the app, it breaks down those numbers by meal.
• 2:14
  So not just seeing one calorie number for the day, I can see what's happening at breakfast versus lunch versus dinner, where my protein actually lands, whether I'm eating enough earlier in the day or piling everything on at night.
• 2:25
  And all of a sudden,
• 2:27
  When I'm crashing at 3, 4 p.m., well, I can take a look and see, it's not so surprising anymore based on what I ate or what I didn't eat.
• 2:34
  So that's what I mean when I say that MyFitnessPal is a great app for awareness.
• 2:39
  It's not obsessive, it's not stressful, it's not time-consuming, it's actually the opposite.
• 2:44
  Guessing is stressful.
• 2:45
  When you have all the information, the food you eat, your nutrition...
• 2:49
  becomes way easier to keep up with.
• 2:51
  Also, a lot of people stress out that logging food is gonna be very time consuming.
• 2:55
  It's not.
• 2:56
  And if it was annoying, I'd stop.
• 2:57
  But what I love about the app is that they've made it super, super simple.
• 3:01
  They've removed all friction in food logging, right?
• 3:04
  They have the largest food database out there.
• 3:06
  So whatever I'm eating is already in it.
• 3:08
  I can voice logs, so I can just say what I'm eating.
• 3:11
  They have a barcode scanner that handles all the package stuff.
• 3:14
  They have a tool called Meal Scan, which lets me point my camera at my plate and it breaks down all the macros and then logs it for breakfast, lunch, dinner, whatever.
• 3:22
  And the app remembers my regular meals.
• 3:25
  And I'm really just in and out of the app in seconds.
• 3:27
  And on top of that, it connects with over 40 fitness apps and wearables.
• 3:31
  So my workouts, my nutrition, they're all in one place.
• 3:34
  See, food is the foundation of everything.
• 3:36
  your energy, your sleep, your weight, your recovery, your performance at work, at home.
• 3:41
  And I really believe that when you start to pay attention to what you eat, every single part of your life improves.
• 3:46
  And to be honest, for me, it's the most useful tool because when I see the information, when I see what I'm eating,
• 3:52
  and I feel the effects of having good nutrition and good food at the right time, the decisions on what to eat become obvious.
• 4:00
  Not because someone told me to eat better.
• 4:03
  It's because I have the data.
• 4:04
  And the data makes it super, super easy to stay on track.
• 4:07
  So please do yourself a favor.
• 4:08
  Go to podcast.myfitnesspal.com and use code SCOTT.
• 4:12
  That's S-C-O-T-T, all uppercase letters, for 15% off MyFitnessPal Premium.
• 4:17
  That is podcast.myfitnesspal.com, code SCOTT, for 15% off.
• 4:22
  My Fitness Pal Premium.
• 4:28
  Rick, so you went from prosecuting organized crime to opening a pizza restaurant.
• 4:33
  Everybody was very surprised when two lawyers were going to the pizza business.
• 4:37
  What did you know that they didn't?
• 4:39
  Absolutely nothing.
• 4:41
  We really didn't.
• 4:42
  You jumped into the pizza business.
• 4:45
  Why?
• 4:46
  It was by a law partner and I.
• 4:47
  So we didn't go straight from federal prosecutors.
• 4:50
  We were both federal prosecutors together.
• 4:53
  Then we were criminal defense attorneys for 12 years as a partnership.
• 4:58
  And we always wanted to be in the restaurant business.
• 5:00
  And we did.
• 5:01
  We had one idea after another.
• 5:04
  And every time we got close, some client would come along with a big retainer, and we'd be back practicing law again.
• 5:12
  But finally, finally, we got to the point where we said we've got to do it.
• 5:16
  It's it was a golden handcuffs a little bit like the money was very good.
• 5:22
  Oh, absolutely.
• 5:23
  That was that was the critical reason.
• 5:25
  But not to not to divert from from the business story too much, but I think that just like go into a little bit about some of the fun stuff that you've done pre CPK when you were still working as a lawyer.
• 5:41
  I've lived a very interesting life.
• 5:44
  I grew up in Chicago, and then right out of law school, I got appointed through the honors program to the Department of Justice in Washington.
• 5:54
  I was writing briefs to the Supreme Court, and that was very heady stuff for a young kid.
• 5:59
  And then went to L.A., fell in love with L.A., and became a federal prosecutor there.
• 6:05
  And then I had—I'm 26 years old.
• 6:10
  And I had the biggest case of my career.
• 6:12
  I was involved in prosecuting the heads of the Detroit and St. Louis mob for holding a hidden interest in the Frontier Hotel in Vegas.
• 6:22
  So as far as I know, that's the only case ever.
• 6:26
  We always hear the stories of the mob owning Vegas.
• 6:30
  But as far as I know, I'm the only case that ever prosecuted and convicted anybody of doing that.
• 6:36
  And during that trial, which is really amazing, it was a very big trial in federal court in Los Angeles, and it was the first time that the metal screening devices, magnetometers, had ever been used in federal court in Los Angeles.
• 6:53
  And during that trial, the Godfather movie came out.
• 6:57
  And the jury wasn't sequestered, so it became a little issue.
• 7:01
  You've, with your background as a prosecutor, dealing with pretty aggressive, hard people, I guess that tees you up to be a good business person too.
• 7:13
  But even as a prosecutor, you're never stressed out about people coming after you or?
• 7:19
  People have asked me that.
• 7:20
  I've always wondered, like if you're always worried for your life.
• 7:22
  People have always asked, right, were you afraid of these mobsters?
• 7:26
  And I wasn't.
• 7:28
  And I think in part, I mean, all the lore about the mafia, but the fact is in those days, the mafia did not have a history of going after FBI agents, federal prosecutors.
• 7:42
  It would bring the heat down on you.
• 7:44
  Right.
• 7:44
  So honestly, I don't really remember being afraid at all.
• 7:48
  That's funny.
• 7:49
  But it does set you up so that all the different things you deal with in your business life are not so stressful when you're dealing with people that are...
• 7:57
  Well, I think that's exactly true.
• 7:59
  I mean, you know, I thought...
• 8:01
  When you're dealing with somebody who's probably killed a few people, all of a sudden a contract with a landlord doesn't seem so stressful.
• 8:09
  Not particularly.
• 8:11
  Exactly.
• 8:12
  No, I think that's true.
• 8:14
  Being defense attorneys, you're making really high-pressure decisions, both as prosecutor, defense attorney, on your feet during court trials, right?
• 8:25
  The rest of that stuff sort of rolled over your back.
• 8:28
  And then also Larry and I together, once we came together on an agreement—
• 8:34
  You know, we are a pretty tough act.
• 8:38
  I'm sure some people didn't glove us.
• 8:40
  But out of all the different businesses, so you're obviously very good friends.
• 8:44
  You're practicing law together.
• 8:46
  You've had so much of your career together.
• 8:48
  Out of all the different things you could do together, what makes somebody want to go into the food industry?
• 8:53
  I think so many people feel the same way.
• 8:55
  So how many people always say, I could open a restaurant or I'd love to open a restaurant.
• 9:01
  It's a natural human thing.
• 9:03
  And why is that?
• 9:04
  Because people love the connection.
• 9:06
  They love entertaining their friends.
• 9:09
  Both my partner and I love to cook.
• 9:10
  We love having dinner parties where we were cooking and experimenting with different menu items.
• 9:18
  And it seemed natural.
• 9:20
  Even though it's probably one of the hardest businesses to do.
• 9:23
  Oh, absolutely.
• 9:23
  That's what I say.
• 9:24
  You know, I do and I've reflected upon it.
• 9:29
  If I knew then what I know now, would I have done it?
• 9:32
  And the answer is I really don't know.
• 9:35
  Fortunately, we didn't know what we were getting into.
• 9:38
  I think that there's a beautiful thing in not having experience, like the weight of all this experience in an industry.
• 9:48
  And it just lets you take all these risks that you probably wouldn't take.
• 9:52
  It was absolutely naivete.
• 9:54
  It was naivete coupled with hubris.
• 9:57
  That's so funny.
• 9:58
  I think also about, you know, I interview a lot of people and some of them are close friends.
• 10:02
  And we talk about after they sold the company, like where they're putting their money.
• 10:06
  And for some reason, it seems like 100% of people that put money into a restaurant lose their money.
• 10:12
  It is so true.
• 10:12
  You know, it's interesting.
• 10:13
  One of our 22 original investors was Jane Seymour, the actress.
• 10:19
  And Jane's husband was her business manager.
• 10:22
  And of course, he advised all of his clients to not invest.
• 10:26
  But she convinced him to let her and let them invest.
• 10:30
  And it worked out.
• 10:31
  So finally, you have all these different restaurant concepts.
• 10:37
  What was the reason why with California Pizza Kitchen, why was that the one that you didn't quit and go back to practicing?
• 10:48
  Well, we'd come off a long trial in San Francisco, a four-month fraud trial.
• 10:53
  My daughter was two, and I really had had enough, and I think Larry had too.
• 10:58
  I had seen this pasta concept, cafeteria concept in Chicago, which is my hometown, and I had a lot of fun.
• 11:05
  And at that time, I was a runner and running marathons, and carbohydrate loading was really in.
• 11:10
  I said, well, that's really great.
• 11:12
  These fresh pastas, just a perfect idea.
• 11:15
  So I told Larry about it.
• 11:17
  And we came home from the trial, and we saw a restaurant like that in a mall in Glendale, California.
• 11:25
  And in that afternoon, on the way home, after seeing that, we saw some pizza going around.
• 11:32
  And on the way back to the office, we started kicking around.
• 11:36
  Well, how about this new style of pizza, this California style pizza?
• 11:40
  And by the time we got back to our office in Beverly Hills, the concept had changed entirely.
• 11:45
  So what was the first concept then?
• 11:47
  Well, the first concept was the pasta cafeteria, no pizza.
• 11:51
  Then add pizza when we saw it.
• 11:54
  And then by the time we got home, it's like, forget the pasta cafeteria idea.
• 11:59
  Let's do this new style of pizza that's emerging called California style.
• 12:04
  It was in its complete infancy, and it had been started by Alice Waters at Berkeley.
• 12:10
  Chez Panisse.
• 12:10
  Yeah, yeah, yeah.
• 12:11
  And then Wolfgang Puck introduced duck sausage and smoked salmon pizza at Spago, which was so celebrity-oriented.
• 12:19
  And so our original concept was, let's use that idea of these new original pizzas and put it in a family-friendly restaurant.
• 12:29
  And we thought of it as that time as Spago for the masses.
• 12:33
  Yeah.
• 12:33
  But in hindsight, it makes sense why what you created worked out.
• 12:40
  But at the time, it was just you just sort of following your intuition.
• 12:44
  It was purely intuition.
• 12:46
  Because you had no idea.
• 12:47
  Yeah, absolutely.
• 12:48
  We had no idea.
• 12:50
  We had no idea.
• 12:50
  But...
• 12:51
  When we went to the bank, we borrowed a quarter of a million dollars, $250,000 on the strength of our law practice.
• 13:00
  Well, plus mortgaging our homes.
• 13:03
  You mortgage your house?
• 13:04
  Mortgage the house.
• 13:04
  Both of you?
• 13:05
  Yes, both of us.
• 13:06
  Plus you put like a lien on the law practice?
• 13:08
  Yes, literally.
• 13:10
  And we signed personal guarantees on the lease of this little space in Beverly Hills.
• 13:15
  Oh my God.
• 13:16
  So we were all in.
• 13:17
  And then the banker asked me to write a business plan.
• 13:23
  Well, I didn't do anything about business plans.
• 13:24
  I was a trial lawyer.
• 13:26
  But I sat down, I wrote a business plan.
• 13:28
  I said, well, we're going to create California Pizza Kitchen.
• 13:31
  It will be the third major type of pizza in the U.S., along with New York and Chicago.
• 13:39
  Sorry about Boston and Detroit, but that's pretty much the state of it.
• 13:43
  We said, we're going to define this new category of pizza called California Style in the U.S.
• 13:49
  And in the future, oh, we're going to make it international, national and international.
• 13:54
  And to add to that, I added, and in the future, California-style pizza will be defined by whatever California Pizza Kitchen says it is.
• 14:06
  That's before we had a menu.
• 14:08
  So you did say a little bit of hubris.
• 14:10
  Oh, a lot of hubris.
• 14:12
  A little more than a little bit, because this is not something you came from.
• 14:16
  You have no idea really how to succeed in the restaurant industry, but you're saying we're betting on ourselves.
• 14:23
  We're literally putting our money where our mouth is.
• 14:26
  And this is not only going to be a successful business.
• 14:29
  But this is going to be the standard for what people, when, you know, what's the, I don't know what the term is, but when you say, when a brand becomes like a verb, like the brand is going to be synonymous, not with a verb, but with a verb.
• 14:45
  The entire... Category.
• 14:46
  Category, yes.
• 14:47
  Category, that's how we intended.
• 14:49
  It was crazy.
• 14:50
  What was the thing, because obviously you're taking money out, you're starting this.
• 14:54
  When did you realize that you were right?
• 14:57
  The day we created barbecue chicken pizza.
• 15:00
  Why?
• 15:01
  So we brought this original, the original chef from Spago had left, original pizza chef.
• 15:08
  And we hired him as a consultant.
• 15:11
  And that original menu had rabbit sausage pizza on it, duck sausage pizza on it, radicchio pine nut, grape leaf, and barbecue chicken pizza.
• 15:24
  And even before we opened, when we tasted this barbecue chicken pizza, that was the light bulb.
• 15:32
  It all came together.
• 15:33
  And then we opened, and 70% of our pizzas sold were barbecue chicken pizza.
• 15:40
  literally the day we opened the first version of of of the restaurant you were not cooking yourself you you had to find good people to sort of bring this vision to life now somebody who has no idea how to find like a lot of people listen to this podcast are entrepreneurs
• 15:58
  And the hardest thing for an entrepreneur to do is to hire somebody, a really important piece of their business, without really having that skill set.
• 16:08
  And the way that I think about it, it's not usually hiring a chef.
• 16:11
  It's usually like a software developer who has to hire like a head of sales or something like that.
• 16:18
  But I feel like the average software developer, even if they, even if they like,
• 16:25
  Don't know much about sales.
• 16:27
  There's a lot of places you can go and figure out now what to look for in that good hire.
• 16:31
  There's probably some podcasts you can listen to and some books you can read.
• 16:35
  But when you started this, when you started California Pizza Kitchen, you're a prosecutor and you have to hire a chef.
• 16:42
  Nothing in your background is, from what I understand, going to give you any experience on how to hire a good chef or how to hire a good restauranteur.
• 16:51
  I don't even know what's in a restaurant, to be quite honest.
• 16:53
  I've never worked in the food.
• 16:54
  But also, like, there's no resources to find the right people.
• 16:59
  But what it sounds like is from the get-go, this was very successful.
• 17:04
  So I guess the question, teeing up this question,
• 17:07
  Sorry, I'm going long-winded because I just think it's fascinating how you were so successful so quickly.
• 17:12
  And I know that there's been ups and downs.
• 17:14
  But the question is, how do you find that good first team to actually execute and not do what a lot of people do and screw up those hires?
• 17:23
  It's great questions.
• 17:24
  And so, in fact, we had a horrible shift.
• 17:28
  Right.
• 17:29
  I mean, he came up with barbecue chicken pizza, but he didn't want us anywhere near the restaurant.
• 17:34
  He thought you two lawyers stay out of the restaurant, leave it to me.
• 17:38
  So he was, we got lucky there.
• 17:42
  However, our first hire...
• 17:44
  was critical.
• 17:45
  We were being served in a restaurant in Santa Monica at lunch.
• 17:49
  This is around the time we signed the lease.
• 17:52
  So six months before we opened the first restaurant and a woman by the name of Julie Carruthers, she was 23 years old.
• 18:01
  She was an aspiring actress who like many actresses in California was working a restaurant and she was the epitome of what we thought would be great service.
• 18:11
  So,
• 18:12
  So we said to her, we're starting a restaurant chain.
• 18:16
  Not that we're starting a restaurant.
• 18:18
  Starting a restaurant chain.
• 18:19
  We're starting a restaurant chain.
• 18:20
  Would you come to interview with us?
• 18:23
  Okay.
• 18:24
  Well, Larry and I didn't know anything about interviewing.
• 18:26
  So when she came to our office the next day, which she did, we didn't interview her.
• 18:31
  We sold her on our vision.
• 18:35
  Here's what we're going to do.
• 18:36
  And she left her job, and she came to work for us.
• 18:40
  And then she worked with my wife, Esther, who actually had some experience growing up in her family's diner in Birmingham, Alabama.
• 18:49
  And then she was a stewardess.
• 18:52
  Before there were flight attendants, there were stewardesses.
• 18:56
  And they worked on creating the opening training manual.
• 19:00
  And then Esther went to work as the hostess for the first year in the front, and she was incredible for our success.
• 19:08
  The third founder, she's the unsung third founder.
• 19:12
  But we had Julie who then hired, and along with Esther hired those original servers, and we got some great people as our original servers.
• 19:25
  One of which was Sean Howey,
• 19:27
  who later went to law school and became part of the defense team in the OJ case and then was, I think, the managing partner of the Cochrane Law Firm.
• 19:37
  She was an original server at CPK.
• 19:40
  Obviously, you've become very good over the years.
• 19:43
  And even before we started this podcast, we were talking about, you know, there's so many different things you can teach and talk about.
• 19:49
  What do you want to focus on?
• 19:50
  And you were like, people.
• 19:51
  I want to talk about people and the importance of people and culture.
• 19:54
  And we'll go there eventually.
• 19:57
  But what is your secret for attracting and finding good people?
• 20:01
  Like, even when you don't know what to look for, it seems like you find really good people.
• 20:07
  I think you have to, from day one, create a work environment where people want to work.
• 20:13
  So what happened to us, because we had all this class with this chef, we were clashing with him from day one.
• 20:22
  And he was just a consultant.
• 20:24
  Didn't want us in the restaurant.
• 20:26
  We were in.
• 20:27
  He lasted maybe six weeks or two months until he blew up in the restaurant.
• 20:33
  And we had to fire him on the spot.
• 20:36
  And now we were at it really full-time, Esther and I and Larry.
• 20:41
  It's the first thing we did.
• 20:42
  Now, here we had, within the first two months, here we...
• 20:48
  had this wildly successful start.
• 20:51
  We had the chef.
• 20:53
  It was oil and water from day one.
• 20:57
  Finally, we couldn't support him.
• 20:59
  He did something we couldn't support him.
• 21:01
  We terminated him.
• 21:03
  And Esther and I and Larry were in my law office, and we sat on the floor and we cried.
• 21:08
  We were scared out of our minds.
• 21:10
  This is like we're actually in this now.
• 21:12
  Yeah, we're in it now.
• 21:13
  We don't have a safety net.
• 21:16
  We fortunately did have a cook that the chef had brought in that could run the restaurant.
• 21:23
  But what we saw...
• 21:26
  which maybe shouldn't have surprised us, but it seemed endemic in the restaurant business at the time.
• 21:33
  The front of the house and the back of the house didn't get along.
• 21:36
  They were culturally very different.
• 21:39
  And we said, this is not going to work.
• 21:42
  We have to get along.
• 21:44
  We have to respect each other, and we can talk more about it, about what became our culture known as ROC.
• 21:51
  But from the moment, way before we created a culture or even knew the word, we knew we needed it.
• 21:59
  And so our mantra always was to respect people.
• 22:04
  We told people, we just made it up on the spot.
• 22:07
  We said, listen...
• 22:09
  We're all going to get along.
• 22:10
  We have to get along.
• 22:13
  We're a company that's going to be colorblind, genderblind, religionblind, educationblind.
• 22:18
  We don't care where you came from, what your background is.
• 22:21
  Let's just all get along here and figure out how to do this.
• 22:27
  And so I think in answer to your question,
• 22:30
  What I've always believed, and Larry too, my partner, is we wanted to create a place where people were respected and they wanted to come to work.
• 22:43
  I think that's the key.
• 22:45
  It's to create a place where people want to work.
• 22:50
  It seems like such a simple thing, but I feel like not enough people focus on that, that creating an environment where people actually enjoy showing up.
• 22:57
  You know, it became, and we can talk about it now, ultimately in later years when we were asked to create a mission statement and we sat down and we said, what, to sell more pizzas than anybody in the world?
• 23:11
  That's not our mission, right?
• 23:12
  I mean, but we came up with ROC.
• 23:17
  R for respect, O for opportunity, C for communication, and K for kindness.
• 23:24
  And we had rock stars, which was a complete coincidence.
• 23:28
  It was completely organic.
• 23:29
  It wasn't a gimmick, but it actually worked.
• 23:32
  But what's the key word in that one?
• 23:35
  Kindness.
• 23:36
  You want to be, you want to work and be around kind people.
• 23:40
  We use that as how we decided to promote people or not.
• 23:45
  Were they rock stars?
• 23:47
  Were they kind?
• 23:48
  I love this.
• 23:50
  There's so many places where I've worked in my career where kindness is unfortunately not taken into consideration, but performance in some other way, some other KPS, some other performance metric is.
• 24:07
  And I think it turns a lot of really good people off from working for the company.
• 24:11
  If they see that, for example,
• 24:13
  There's, you know, the asshole salesperson that always achieves and overachieves, but like they're a very toxic personality.
• 24:22
  I think the kindness, like kindness attracts really good people too, really talented people.
• 24:27
  That was the key.
• 24:29
  Plus, you know what else?
• 24:31
  Training.
• 24:32
  Yes.
• 24:33
  And so it was very interesting.
• 24:35
  We, from day one, again, involved because of Julie and Nestor, too, is we required every server to know every menu item, every single, every menu.
• 24:48
  every recipe in every minute and gave them tests.
• 24:51
  In fact, in later years, one of my friends who had got his son a job at the CPK told me his son said he studied harder for his finals at CPK than his finals at Harvard.
• 25:03
  So you focused on kindness, education, and then like everything else took care of itself.
• 25:07
  The thing about training, think about having those tests at the beginning, weeded out people who weren't willing to do the work.
• 25:16
  to spend the time to actually get the job.
• 25:19
  Yeah.
• 25:20
  And so that became self-fulfilling or self-weeding in a sense.
• 25:26
  That first year, what was the hardest thing that you had to deal with?
• 25:30
  And was it figuring out the business?
• 25:34
  Was it sort of dealing with your own anxiety about going all in?
• 25:38
  Like what was the first year?
• 25:40
  I think that breaks a lot of entrepreneurs and they're not ready for what's coming to them.
• 25:44
  Well, the first step, signing the lease with a personal guarantee.
• 25:50
  That's stressful.
• 25:51
  So stress one.
• 25:53
  Two, mortgaging your home.
• 25:54
  Okay.
• 25:56
  Okay.
• 25:57
  For a business you didn't know anything about.
• 26:00
  So we had to believe in ourselves, obviously.
• 26:04
  And then, of course, the early stresses with that chef.
• 26:08
  But those were, I mean, as I said, sitting on the floor and crying, that was real.
• 26:14
  We were scared out of our minds because at that point, we started off as wildly successful.
• 26:21
  I mean, wildly.
• 26:22
  People.
• 26:24
  all because of the barbecue chicken pizza.
• 26:26
  People were saying, you know, I don't even like pizza.
• 26:29
  I love this, right?
• 26:30
  That was the light bulb for us, and we were packed, and it was a tiny little restaurant, and we'd have 30, 40 people waiting on the street to get in to this restaurant, which was its own billboard, right?
• 26:42
  So we didn't have that issue.
• 26:45
  We weren't really worried about managing costs at that point.
• 26:48
  We weren't.
• 26:50
  We were not managing costs.
• 26:51
  We wouldn't even know how, right?
• 26:53
  But—
• 26:53
  But that was the number one fear.
• 26:57
  And then the stress over getting rid of that chef and being left to pick up those pieces and figure it out.
• 27:05
  Do you think you could have done this alone?
• 27:08
  Without my partner?
• 27:10
  Without Larry.
• 27:10
  I don't know the answer to that.
• 27:12
  I'm glad I didn't have to.
• 27:14
  Meaning we had a unique relationship.
• 27:17
  I mean, we were best friends, law partners for 40 plus years.
• 27:22
  But in that point for 12 or 13 years, we trusted each other 100%.
• 27:29
  And we were lawyers.
• 27:30
  We never necessarily started from the same spot.
• 27:33
  We've debated like crazy.
• 27:35
  We were lawyers.
• 27:36
  And we were worse yet.
• 27:37
  We were trial lawyers.
• 27:39
  But when we came to a conclusion,
• 27:42
  We backed each other up.
• 27:43
  We didn't do I told you so's.
• 27:45
  We didn't look back.
• 27:47
  It was our joint conclusion.
• 27:49
  So I don't know if I could have done it alone.
• 27:52
  Fortunately, I didn't have to.
• 27:53
  I think that it's so hard to find that person to partner with.
• 27:58
  It's very, very hard.
• 27:59
  I think that it's a superpower when you can find that person you can trust explicitly.
• 28:04
  Um, but it's like, it's like a, it's like a marriage at the end of the day.
• 28:08
  Like you're, you're spending a lot of your life with this person building this business.
• 28:13
  How do you, I mean, outside of working with somebody for such a long time before you go into business together, how does somebody find someone that they can be that candid with it?
• 28:24
  They could trust that much.
• 28:25
  Boy, that's like finding a spouse, right?
• 28:28
  I mean, I think, oh, it is.
• 28:32
  There is no simple formula for that.
• 28:34
  You have to look, I guess, number one, you have to look for people with your same values, right?
• 28:40
  And trust your instincts.
• 28:44
  You know, it's interesting, too, that I listened about a year ago.
• 28:48
  I was watching a cable TV, maybe a restaurant industry program about.
• 28:53
  I saw this pizza chef owner, pizza shop owner from New Jersey, and he was very successful.
• 29:00
  And he was lamenting, I can never, ever open another restaurant because I can't find anybody I can trust.
• 29:10
  I can't find anybody, you know, that cares as much as I do.
• 29:14
  And I sort of wished I could have screamed into the TV and said, you're right.
• 29:18
  You will never find anybody that cares as much as you do.
• 29:22
  You're the owner.
• 29:24
  It doesn't mean you can't find people who care.
• 29:28
  You have to find people that share your vision, that you treat well.
• 29:32
  Those are the things that matter.
• 29:35
  But picking a partner, I think you've got to trust your instincts.
• 29:39
  Part of the book, it talks about how to, like with a partner, solve problems without fighting when you have completely different perspectives on something.
• 29:46
  And because you were both lawyers, I'm sure, like you mentioned, it comes up, that happened quite a bit.
• 29:52
  We do fight.
• 29:53
  So, okay, so say you fight.
• 29:55
  Sometimes you disagree, sometimes you do fight, but ultimately what's the way to move past something productively when you have a disagreement?
• 30:06
  The way I've thought about it all these years is that we both had very strong egos.
• 30:11
  Neither of us had our egos vested in being right.
• 30:16
  There is where the problem becomes.
• 30:18
  If your ego says, I'm always right,
• 30:21
  And you can't accept that you might not be right.
• 30:26
  But again, I think my law background comes in there.
• 30:31
  As a lawyer training, and having been both a prosecutor and defense attorney, you learn how to argue both sides.
• 30:39
  So I think something in my life has always been true about me.
• 30:43
  I don't see black and white.
• 30:45
  I see gray.
• 30:47
  I always see the middle.
• 30:49
  And that can also, so that makes you more empathetic to how someone else views the situation because they see their perspective.
• 30:56
  You know, I heard the line, I think it was attributed to Abraham Lincoln.
• 30:59
  I'm not sure that's a correct attribution.
• 31:01
  They said no matter how thin you make a pancake, it still has two sides.
• 31:06
  You said before when you're building CPK that you decided to be bold.
• 31:13
  And we're talking about right partner values alignment.
• 31:17
  Was that both of you that had the same vision from the get-go?
• 31:21
  Or was one of you pushing the other to think bigger?
• 31:25
  I think we both wanted to be out of go.
• 31:28
  We both wanted to do this.
• 31:31
  I was quicker to want to sign the lease than Larry was.
• 31:36
  So you had like a very high risk tolerance.
• 31:38
  Right.
• 31:39
  And I think Larry was a little more risk averse.
• 31:44
  And I think in part it was because of his father.
• 31:47
  Right.
• 31:47
  He didn't want to fail his father.
• 31:49
  And I didn't have that issue.
• 31:53
  And that's because my father had passed away.
• 31:55
  I think that also a lot of people, the job they take, the business they build, their worldview, it's heavily influenced by parents.
• 32:08
  And it's not a bad thing, it's just a reality.
• 32:11
  And I think this is a total aside and maybe you have a thought on this because you did take your life into your own hands.
• 32:17
  But
• 32:20
  I think that a lot of people, they would be a lot happier if they focused on goals that were actually theirs and not their parents.
• 32:27
  So in my case, since we're on exactly that, my father passed when I was 26.
• 32:34
  My mother passed away right before I opened.
• 32:37
  So I was just turning 40.
• 32:40
  This is that when I saw that restaurant in Chicago that interests me, it was that I was back in Chicago for my mother's funeral.
• 32:48
  And I was running.
• 32:49
  I tore my hamstring.
• 32:51
  I was running through it.
• 32:54
  I was running 10 miles a day on the beach, along not the other beach, but along the lake.
• 33:00
  And this was a midlife or 40-year-old crisis, right?
• 33:04
  And that's it.
• 33:06
  I'm done.
• 33:07
  I was struggling practicing law.
• 33:10
  Struggling meaning that I no longer...
• 33:14
  loved it the way I did.
• 33:15
  I used to love the law.
• 33:17
  I saw it in the greatest in the Supreme Court, the courts of appeals, and trial law.
• 33:24
  And I loved it, and then I didn't love it as much.
• 33:27
  What gave you the courage to reinvent yourself?
• 33:30
  I think it's intrinsic in me.
• 33:35
  I think there's a Jewish term, and I don't know that many Yiddish terms,
• 33:44
  And it's called Spilkus.
• 33:47
  I don't know this one.
• 33:48
  But I barely know it.
• 33:49
  But it's basically, it's nervous energy.
• 33:51
  It's like, you know, I just had to do it.
• 33:55
  I guess I'll have.
• 33:57
  Sometimes there's just things that I focus on and I just have to do it.
• 34:02
  I have to bring it to completion.
• 34:04
  Yeah.
• 34:04
  I just want people who are listening to understand that it's never too late to reinvent yourself.
• 34:11
  I think that the sad thing is when somebody who is 40 or 45 or 50 and they have, what is the term?
• 34:19
  Focus.
• 34:20
  But then they don't do anything with it.
• 34:21
  And then they wake up one day and they're 70, 80, and there's so much resentment because they haven't taken that step.
• 34:28
  They never took that step.
• 34:32
  What would be your, just one last, one last sort of bit of wisdom about this particular topic of reinvention, because it is key to your story.
• 34:41
  Like you did a hard 180 in your life.
• 34:44
  What is your, your advice to somebody who is in the same spot you were in when you were 40, like 40 year old Rick is trying to figure out how to navigate life.
• 34:54
  What would you tell that person?
• 34:55
  Well, I've had ups and downs since then, too.
• 34:59
  And so what I've come to conclude is that so many people stay in something that makes them unhappy because they're obviously afraid to take that risk.
• 35:11
  My view is that if you have health...
• 35:16
  You can basically recover from anything.
• 35:18
  You pick yourself up.
• 35:20
  So I knew in the back, I never really dealt with a plan B.
• 35:24
  But I had enough confidence in myself that if we failed, which is circling a possibility, right?
• 35:31
  It wasn't about the way that I went into it.
• 35:33
  Oh, we're not going to fail.
• 35:35
  You always know you could.
• 35:37
  Of course you do, right?
• 35:39
  But I felt that worst case, I could still pick myself up and figure out what to do.
• 35:45
  So it's just about trusting yourself to figure it out, basically, at the end of the day, even if it doesn't work.
• 35:51
  Yeah, you have to recognize that.
• 35:54
  You do have to recognize, well, here, what I've come to also realize is,
• 35:59
  Many people, if we went in, we would have said, we probably did.
• 36:03
  Failure is not an option.
• 36:04
  Okay.
• 36:06
  Everybody says that, right?
• 36:08
  Failure is an option.
• 36:10
  It's absolutely an option.
• 36:12
  And if anything should have ever driven that home, it was COVID.
• 36:16
  Because I had a business that failed during COVID, right?
• 36:20
  And a successful business.
• 36:22
  COVID caused it to fail.
• 36:23
  A reaction to COVID caused it to fail.
• 36:27
  So failure is an option, but you still pick yourself up and you go on with your life.
• 36:33
  Life at the Speed of Play is a success story partner.
• 36:36
  Now, this is a book by Mark Pincus, the guy who founded Zynga.
• 36:39
  I've actually had him on the show.
• 36:40
  I met him in person and Reid Hoffman wrote the foreword, calling him one of the best idea people in Silicon Valley.
• 36:46
  The book is Life at the Speed of Play, Launch Products People Love.
• 36:50
  About 170 pages.
• 36:52
  It's already a national bestseller.
• 36:53
  It's his framework for figuring out whether an idea is actually worth going after before you put serious time and money into it.
• 37:00
  not theory, the way he actually does it.
• 37:01
  And he's repeatedly built successful businesses.
• 37:04
  On top of that, you can read it in a weekend.
• 37:06
  It can change your entire life and give you the right direction if you're an entrepreneur.
• 37:09
  So right now, if you go to getmarksbook.com slash success, you get two copies for $32, that's $16 each.
• 37:16
  Mark is paying for the second copy himself because he wants you to give it to somebody, a friend who's been sitting on an idea, someone who needs to push, whoever.
• 37:22
  That's getmarksbook.com slash success.
• 37:25
  Mark with a K, buy one, second one's free.
• 37:28
  MyFitnessPal is a success story partner.
• 37:30
  Now, a quick story.
• 37:31
  A few weeks ago, I was in the middle of a very heavy recording week.
• 37:33
  So five episodes back to back.
• 37:36
  By Wednesday, I could feel it.
• 37:37
  I felt tired.
• 37:38
  And I pulled up my food log in the MyFitnessPal app, and I could see why I felt tired.
• 37:44
  I was heavily under eating.
• 37:47
  I was not keeping up with my meals.
• 37:49
  My macros were all off.
• 37:50
  On weeks like that, staying on top of your fuel and your food and what you eat is the difference between being sharp on episode five and being flat.
• 37:58
  And that's the kind of thing you only catch when you're paying attention.
• 38:01
  And that's why I keep logging every single meal I eat in the MyFitnessPal app.
• 38:05
  It's not because I'm obsessing over numbers.
• 38:07
  It's not because I'm trying to diet.
• 38:09
  Because I'm trying to have an awareness about what I eat in the day.
• 38:13
  And the app makes it so easy to maintain that awareness.
• 38:16
  I can point my camera at a plate with meal scan.
• 38:19
  It'll tell me exactly what I'm eating, all my macronutrients, proteins, fats, carbs.
• 38:24
  There's an intermittent fasting tracker.
• 38:26
  If I want an intermittent fast, it keeps my eating window honest.
• 38:29
  And it all syncs with my watch and all of my fitness apps.
• 38:32
  And it just runs in the background.
• 38:34
  See, food is a foundation for energy, sleep, recovery, performance.
• 38:38
  It is the one input that you cannot skip.
• 38:41
  So do yourself a favor, track what you're eating.
• 38:43
  It'll make you feel better, perform better in everything that you do.
• 38:47
  Go to podcasts.myfitnesspal.com and use code SCOTT, all uppercase for 50% off MyFitnessPal premium.
• 38:54
  That's podcasts.myfitnesspal.com, code SCOTT.
• 38:58
  Have you heard Tim Ferriss has a term, which I think is very powerful, called fear setting.
• 39:06
  And what it means is when you start something that scares you, you think about the worst possible outcome, but you articulate it.
• 39:16
  So you don't just think, oh, if this fails, I'm going to have no money, I'm going to go homeless.
• 39:20
  You literally say, okay, if this fails,
• 39:24
  What is more or less than likely going to happen?
• 39:26
  Is it going to be, you know, I'm not going to be able to pay my mortgage.
• 39:30
  The bank's going to take my home.
• 39:31
  I'm going to be on the street.
• 39:33
  You know, I'm going to end up in jail because I'm destitute and I steal a loaf of bread.
• 39:38
  No, that is most likely not going to happen.
• 39:41
  So a lot of the fear about doing something or taking action or taking a risk, it's illogical.
• 39:47
  The fear doesn't actually make sense because kind of like the exercise you did with CPK,
• 39:54
  If I start it and it fails, I'm going to be fine.
• 39:58
  Like, I'm not going to, you know, not be able to afford a meal.
• 40:02
  I'll figure it out.
• 40:03
  I think you really make a great point there.
• 40:05
  I think it's useful to the audience, right?
• 40:09
  Exactly that.
• 40:10
  It doesn't mean you're going onto the street.
• 40:12
  You can get a job.
• 40:13
  I mean, right?
• 40:15
  You can figure it out and you might have another shot at your dream, right?
• 40:20
  And you just keep poking at it.
• 40:22
  Right.
• 40:23
  And get on with it.
• 40:24
  So CPK is growing.
• 40:27
  By the way, I didn't even I didn't know if it was like a bad thing to use the acronym CPK.
• 40:33
  That's why I kept saying California Pizza Kitchen.
• 40:35
  I'm like, I don't want to like I don't want to tell the founder like I don't want to like shorten the name of the company.
• 40:40
  So everybody just says CPK?
• 40:42
  We had CPK on the logo.
• 40:44
  Ah, so I didn't know if that was like a loud...
• 40:46
  The way we thought about it is California Pizza Kitchen is a little bit of a mouthful.
• 40:51
  So we put CPK in there.
• 40:54
  You know, it was very funny.
• 40:55
  I was on the board of directors of Callaway Golf for 23 years.
• 41:00
  And one time I'm sitting with the Swedish pro and his wife at dinner, Nicholas Fass.
• 41:06
  And he asked me what I did.
• 41:08
  And I said, well, I'm a co-founder of a restaurant chain.
• 41:14
  And maybe because Larry wasn't there, maybe I've said founder.
• 41:17
  Yeah.
• 41:18
  But I said, I'm a co-founder.
• 41:20
  He said, what's it called?
• 41:21
  And I said, California Pizza Kitchen.
• 41:23
  He said, oh, that's interesting.
• 41:24
  What kind of things?
• 41:25
  I said, well, we do our barbecue chicken piece.
• 41:28
  And he looked, he and his wife go, do you mean CPK?
• 41:31
  You mean it's called California Pizza Kitchen?
• 41:34
  So people just use the acronym.
• 41:36
  Right.
• 41:36
  They didn't know it was called California Pizza Kitchen.
• 41:39
  Where did the name even come?
• 41:40
  I mean, it was such an obvious name.
• 41:41
  It's California.
• 41:42
  It's Pizza at the Kitchen.
• 41:43
  That was like, that's the amount of thought that went into the name.
• 41:46
  It seems so obvious now, right?
• 41:49
  Okay.
• 41:50
  But at the time we named it, there was no barbecue chicken pizza.
• 41:54
  There was no menu.
• 41:55
  The style, California style pizza existed, as I mentioned, at Chez Panisse in Berkeley and Spalago.
• 42:03
  Yeah.
• 42:04
  But we didn't have the chef.
• 42:05
  We didn't have a menu.
• 42:06
  We're trying to come up with a name.
• 42:09
  We had some Italian names like Ciao and Primavera and a combination of our names, etc.
• 42:16
  One day, Larry calls me and said, I want to have breakfast.
• 42:22
  I'll meet you at Nate Nell's at the famous, iconic deli in Beverly Hills.
• 42:27
  Other than when we were in trial, all the years together, we never had breakfast.
• 42:32
  He got himself all excited.
• 42:35
  So we go to meet him for breakfast.
• 42:37
  He said, I got it.
• 42:37
  I got the name.
• 42:38
  I said, what's that?
• 42:40
  He said, California Pizza Kitchen.
• 42:42
  And I said,
• 42:44
  God, Larry, I'm not going to open a restaurant in Beverly Hills and call a California pizza kitchen.
• 42:50
  It's way too pedestrian.
• 42:55
  And he pouts.
• 42:57
  We had this very pouts and angry and, okay, I don't care.
• 43:04
  Call whatever you want.
• 43:05
  He said, but he said...
• 43:07
  But this is his retort.
• 43:09
  He's a trial lawyer, right?
• 43:10
  And he said, but I'll tell you this.
• 43:12
  You call it anything you want, but if somebody, if we do chow or we do primavera, and then somebody opens down the block with a restaurant that does the same thing and they call it California Pizza Kitchen, you're going to be sick.
• 43:26
  Yes, yes.
• 43:27
  Okay?
• 43:27
  And when he said it, I had this pit in my stomach, right?
• 43:30
  Okay.
• 43:31
  And I said, you're right, it's over.
• 43:32
  That's it.
• 43:33
  You're done.
• 43:34
  I agree.
• 43:34
  OK. And that night, we were with a couple from Providence, Rhode Island.
• 43:39
  And we floated these names.
• 43:41
  So which one would you go to?
• 43:42
  So well, you open a Chow or Primavera, just another Italian restaurant in Providence.
• 43:48
  But if you open a California pizza kitchen, we'd go to see that because we want to see what you fruits and nuts are up to.
• 43:54
  And that was our market research.
• 43:56
  So Larry would have taken this very personally if you didn't take his suggestion on the name.
• 44:01
  Oh, absolutely.
• 44:02
  He cares about this stuff a lot.
• 44:04
  He really cares about it.
• 44:05
  He absolutely cares about being the namer.
• 44:07
  What was the time span between when it started, when it started growing?
• 44:11
  And then I guess the first real transaction was when Pepsi paid $100 million for 67% in 92, correct?
• 44:22
  Before that, it was privately owned.
• 44:24
  Well, you had some investors.
• 44:25
  We had 22 original investors.
• 44:27
  We called, well, here it was.
• 44:28
  We thought we could build this thing originally.
• 44:31
  That's how naive we were.
• 44:33
  We thought a quarter of a million dollars.
• 44:35
  We brought a contractor in.
• 44:37
  He said, what's it going to cost to build this?
• 44:38
  A quarter of a million dollars.
• 44:40
  Okay, so we borrowed a quarter of a million dollars.
• 44:43
  Well, he didn't mention that they didn't include kitchen equipment.
• 44:47
  Or, of course, all the other soft costs that are involved in training and computer systems.
• 44:53
  Anyway, we ended up going to friends for another quarter of a million dollars.
• 44:58
  22 friends.
• 44:59
  We made 23 phone calls in an afternoon.
• 45:02
  We got 22 yeses.
• 45:04
  So these were good friends.
• 45:05
  Well, yeah, good friends and people invested.
• 45:08
  You know, it turned out really great.
• 45:10
  Anyway, then we, again, we knew we were building restaurants, not a restaurant.
• 45:15
  And then we, each time we needed more money as we built more.
• 45:20
  So the second one, the first one opened in March of 85.
• 45:25
  Second one opened in December, I'm sorry, June of 86.
• 45:30
  Third in December.
• 45:31
  And so...
• 45:33
  Within the first seven years, we built 25 restaurants, like in seven states.
• 45:38
  And we were about, oh, and each time we needed money,
• 45:42
  We just wrote a letter to our investors.
• 45:44
  We said, here, now we're raising a million.
• 45:47
  Now we're raising 1.2 million.
• 45:49
  And here's the new price.
• 45:51
  And we kept raising the price of the stock and like throwing darts.
• 45:55
  Some people would say, oh, my God, where do you come up with that price?
• 45:57
  We'd say, well, we're throwing darts.
• 46:00
  And so now we have 300 investors in seven years, all extended dollars.
• 46:08
  Friends and family, right?
• 46:09
  I brought my uncle.
• 46:10
  I mean, somebody brings their uncle in, they bring their friend in.
• 46:14
  Literally, in the community, in LA's community, we had 300 investors now, the largest of whom was Steve Wynn.
• 46:23
  Okay.
• 46:24
  Steve Wynn became our largest investor with our second restaurant before he built the Mirage.
• 46:30
  This is very important to our growth, too.
• 46:32
  So, Steve, before we opened the second restaurant, Steve invested a quarter of a million dollars.
• 46:38
  And then two years later, he said, I'm building this new hotel and this great resort, and can I be a franchisee?
• 46:47
  Well, we didn't want a franchise.
• 46:49
  But Steve Wynn, yeah, he could be a franchisee.
• 46:52
  So he opened the CPK in the Mirage in 1989, which was an unbelievable billboard for us.
• 47:01
  And then so it was seven years.
• 47:03
  And in the entire 41 years at CPK, there's only been three people.
• 47:09
  One, the original one, Gary Beauregard, who was that person in the back of the house when we got rid of the chef.
• 47:17
  And he ran it for, I think, 12 years.
• 47:20
  Brian Sullivan, who started as an assistant manager and stayed with CPK for over 30 years, and then became, after Gary became our head, we worked with him forever.
• 47:34
  And now Paul Sibilsky, who's been there at...
• 47:38
  18 years and still there.
• 47:40
  So the food quality always maintained the same.
• 47:46
  I like that.
• 47:47
  So Larry is the neighbor after California Pizza Kitchen.
• 47:53
  So when Steve Wynn built the Mirage,
• 48:02
  One day we get a call from his assistant, Joyce, and she said, are you guys going to be in town tomorrow?
• 48:10
  And I said, yeah.
• 48:10
  And he said, well, Steve would like to come in and see you.
• 48:14
  So yeah, we're fine.
• 48:15
  Love to see Steve.
• 48:16
  So he comes in our office.
• 48:19
  I said, you know, I have this property on the north side of the Mirage.
• 48:24
  He said, I want to build a resort that's a family resort to compete with Circus Circus.
• 48:30
  Circus.
• 48:32
  not high-end like the Mirage, and I can't come up with a theme, a name.
• 48:37
  And you guys are creative guys.
• 48:38
  You've got to help me.
• 48:40
  So I think about it overnight.
• 48:42
  I don't come up with anything that great.
• 48:44
  Cut.
• 48:46
  When Larry's leaving town next and he calls me, he said, oh, call Steve when you get a chance.
• 48:51
  I don't have a chance, but give him a call because I named the hotel.
• 48:54
  I said, what's that?
• 48:56
  He said, Treasure Island.
• 48:58
  Really?
• 48:59
  That's so funny.
• 49:00
  I said, that's great.
• 49:01
  So I called Joyce.
• 49:02
  I said, is Steve there?
• 49:05
  She said, no, he's on the plane on the way to Australia.
• 49:09
  So I said, when he gets a chance, have him call me because he's very named the hotel.
• 49:13
  So about five minutes go by and get a call.
• 49:16
  Ricky, Ricky, from the plane.
• 49:19
  Steve's calling me from the plane.
• 49:20
  Ricky, I heard where he named the hotel.
• 49:22
  What is it?
• 49:24
  I said, Treasure Island.
• 49:25
  He said, that's it.
• 49:28
  Give him a kiss.
• 49:28
  Goodbye.
• 49:29
  Goodbye.
• 49:30
  And now, two days later or whatever, two days later, Steve gets off the plane at the tarmac.
• 49:38
  He's got a press conference.
• 49:40
  He gets off the plane wearing a pirate costume.
• 49:43
  Okay.
• 49:45
  And they asked, and CNN asked, where'd you come up with this idea?
• 49:50
  And he said, I didn't, but a friend of mine who's chairman of California Pizza Kitchen did.
• 49:56
  Okay, now about Steve's 50th birthday of like two or three weeks or a month later in Vegas for Steve's birthday, his 50th birthday.
• 50:09
  And he takes us into this room, and here's this complete mock-up of that pirate ship battle.
• 50:15
  And he had this million-dollar mock-up with a battle going on.
• 50:20
  And he looks, he says, what do you think?
• 50:22
  And my partner says, just as I envisioned it.
• 50:25
  So at one point, PepsiCo,
• 50:28
  was bullying you about this deal.
• 50:31
  And I just think it's funny because when I was reading the book, you speak about in the prequel dealing with actual mobsters.
• 50:39
  So I feel like corporate mobsters are not that scary when you've dealt with actual mobsters.
• 50:44
  We actually have the registration statement drawn and along came PepsiCo.
• 50:51
  And PepsiCo at that time owned Taco Bell, KFC, and Pizza Hut.
• 50:55
  And this was Yum brand, I think.
• 50:56
  Yeah, it became Yum.
• 50:58
  At that time, it was Pepsi restaurants, PepsiCo restaurants.
• 51:03
  And they said, we want to invest in you.
• 51:04
  We don't want to buy you guys out, but we want to invest in you.
• 51:08
  You're what we think is the best casual dining chain in America, and we would like to own it and own part of it.
• 51:15
  And that was a big deal.
• 51:18
  Well, zero to seven years going public is fast.
• 51:21
  That seems very fast.
• 51:23
  It was pretty fast, but we were trying to make a lot of noise for little guys is the way we thought about it.
• 51:30
  Now, when you think about, so you have these investors, you have Steve Wynn who's opening a franchise.
• 51:35
  Things are going very, very well.
• 51:39
  Is there a reason why you're at this point deciding we want to go maybe public, we want to take on investment?
• 51:46
  Because then either of those options, public comes with headache and some dilution as well.
• 51:51
  Same with taking on investors.
• 51:53
  You never thought for a moment, why don't we just maintain this trajectory and then we can... We wanted liquidity.
• 52:00
  You wanted liquidity.
• 52:01
  Our investors... We had no squeaky wheels in it.
• 52:06
  Maybe the wheels, starting to squeak.
• 52:09
  Maybe somebody started to squeak.
• 52:11
  You know, seven years, you guys aren't making any money.
• 52:14
  You know, we haven't made any money.
• 52:15
  Okay.
• 52:17
  We were looking for a liquidity event.
• 52:20
  And that was, and then, so Pepsi wasn't just offering to invest a little bit.
• 52:25
  They wanted majority.
• 52:26
  Right.
• 52:27
  And then you've said before this blank check.
• 52:32
  So Pepsi came to us and said, you have a blank check.
• 52:35
  What does that mean?
• 52:36
  What did you do with this?
• 52:37
  So the way we, it was, this is public information, but it's just how it unraveled, right?
• 52:50
  So we wanted liquidity for ourselves and our investors.
• 52:56
  And at that point, we had a target of saying we wanted $10 million in the bank each ourselves, right?
• 53:04
  And Pepsi backdoored into a price that could justify how they could give us a certain amount of money.
• 53:13
  So the price stemmed from how do we get Larry and Rick $10 million each after tax payments.
• 53:21
  And that became the price.
• 53:23
  So they bought the company at a value of $140 million.
• 53:28
  for the full company, and then we ended up dividending the money.
• 53:32
  And then the great news was that we then gave the money to our investors, and those original investors, anybody who had put in money, made 22 times their money.
• 53:43
  That's good.
• 53:44
  Yeah, we had a lot of friends.
• 53:45
  Yeah, they were happy.
• 53:47
  Oh, so the blank check.
• 53:48
  You asked me about the blank check, the Pepsi.
• 53:50
  So now Pepsi's in, and in order, the way they did the math, in order for them to justify the price, we needed to open 15 restaurants the first year.
• 54:00
  This is on a base of 25.
• 54:02
  Okay, now open 15, and then 28 every year later.
• 54:05
  Okay.
• 54:09
  It's aggressive.
• 54:10
  Right.
• 54:11
  And then they put on our board John Martin, who was that time CEO and chairman of Taco Bell.
• 54:19
  And he called us wimps.
• 54:21
  He said, you have unlimited capital from PepsiCo.
• 54:24
  Why would you only build 28 restaurants, you wimps?
• 54:28
  Okay.
• 54:29
  Build 50, 100 a year.
• 54:30
  Put them everywhere.
• 54:32
  See where they work, see where they don't work.
• 54:34
  So I think John, who I realized didn't think about it then, now or now, right?
• 54:39
  John was very good with other people's money.
• 54:43
  But you still had a ton of restraint about how to spend that money.
• 54:47
  Like you didn't want to open...
• 54:49
  So explain to me why you didn't take his advice.
• 54:51
  Well, no, we sipped the Kool-Aid.
• 54:54
  Oh, no, we sipped it.
• 54:56
  Oh, yeah, we didn't try to open 50, but we tried to hit the target, which we did, of the 15 the first year and then 28.
• 55:04
  But realize, or not, I mean, but in order to open...
• 55:10
  15 restaurants, get open 15 or 20, let's say 28, as we did.
• 55:16
  You have to be negotiating 90 sites that you think are going to happen.
• 55:21
  Because we ultimately got a formula about one out of every three sites that we were working on that we thought would happen, would happen or happen within that time frame.
• 55:34
  So you had to build up teams of real estate people
• 55:38
  And that's where the carelessness came in.
• 55:41
  Then it became sign the deal.
• 55:44
  Don't do the homework.
• 55:46
  Don't do the demography.
• 55:49
  And so throw it against the wall and see if it sticks.
• 55:53
  And then all of a sudden, yeah, we got 15 open.
• 55:56
  and sign 28, and some of them were coming in so great, doing so great.
• 56:01
  And then PepsiCo said, oh, we didn't mean open, don't open.
• 56:05
  We didn't mean open unsuccessful restaurants.
• 56:08
  So is this actually what led to the PE buyout?
• 56:12
  Yes.
• 56:13
  Well, what led to the, you following that?
• 56:17
  What led to that was?
• 56:20
  At around the same time Pepsi pulled the plug, they were developing their internal strategy to get rid of the restaurants, which we did not know.
• 56:31
  Now, what we did know, however, was we had a feeling that was going to happen because of the conversations we had.
• 56:41
  And we had a deal with PepsiCo.
• 56:45
  that they could not sell their interest.
• 56:48
  We had a very good lawyer.
• 56:49
  It wasn't Larry and I that did, it was our lawyer, Bob Kahn, who's our friend and lawyer forever.
• 56:54
  And I give him all the credit for this.
• 56:57
  But we had an agreement with PepsiCo.
• 56:59
  The reason we were so pleased with this
• 57:02
  Okay.
• 57:03
  We had, our interest was now behind, well, during the PepsiCo period, was now behind $150 million that Pepsi had loaned the company.
• 57:13
  Wait a minute, catch this.
• 57:14
  They had loaned the company.
• 57:15
  This is 1994, 95.
• 57:19
  No current interest payments.
• 57:21
  No current payment.
• 57:25
  All principal and interest due in 2007 as a balloon payment.
• 57:32
  And the interest was at 2%.
• 57:34
  That's incredible.
• 57:36
  Yeah.
• 57:36
  So when we made the deal that we approved, okay, we agreed with the new private equity guys that they could put their own CEO in and we would remain as chairman.
• 57:48
  But now we held our interest free of that debt.
• 57:53
  So we wiped out all that debt for us and our investors.
• 57:57
  That's very impressive.
• 57:59
  And so you were very happy with this deal.
• 58:01
  Very happy with that deal.
• 58:03
  Yeah.
• 58:03
  When I was reading a little bit about your story, I mean, CEO and founders getting pushed out is not uncommon, but it's not usually on great terms.
• 58:13
  They lose control of their company, not because they've negotiated this great deal.
• 58:17
  We, we, we, we see that we seated control and they were happy to have us as chairman, but we didn't have to have control.
• 58:25
  They put in a CEO.
• 58:27
  Now, I'm just curious, I guess the last sort of part of this story, um, was in 2011 where you sold to the Golden Gate and that was, uh, the $470 million, like five, that's like the last piece of this story.
• 58:41
  Right.
• 58:42
  Um, yeah.
• 58:45
  after they installed the new CEO, so we're talking from, well, we're talking from basically 97 to 2011, so a decent amount of time.
• 58:59
  Were you happy with how the company progressed, how the CEO managed?
• 59:04
  Because I know sometimes a CEO is not gonna be a founder, for example, so were you happy with the end result?
• 59:10
  It changed.
• 59:12
  So what happened was,
• 59:13
  that the original CEO, we took it public with him in 2000.
• 59:23
  Yeah.
• 59:25
  And in 2003, he imploded, ended up having to resign, and the board asked us to run the company.
• 59:36
  So we ran it as a public arena.
• 59:38
  I ran it as CEOs, and now we're back, running it as CEOs from 2003 to 2011.
• 59:46
  And in that period, we were very successful up until the recession of...
• 59:53
  which was very impactful.
• 59:55
  But we grew the company, added lots of restaurants, were very successful as CEOs, and then the Great Recession blew it up.
• 1:00:05
  Then we worked our way back in stock price, not as high as it was pre-recession, but that was the kicker that made us want to sell it.
• 1:00:13
  It was like, whoa, how did our stock just go from 27 to five in, you know?
• 1:00:20
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  You've lived basically every chapter a founder can live in a company from like right from the get from from basically being a W2 nine to five all the way through to running a publicly traded company.
• 1:03:54
  That's a wild journey.
• 1:03:56
  It's a wild journey because
• 1:03:59
  I don't know too many people that have done all of it.
• 1:04:03
  I know people that have started companies, but then they hire a CEO.
• 1:04:05
  I know people that are sort of more hired guns that come in after a company goes public.
• 1:04:12
  It's very difficult because it's more of like...
• 1:04:17
  It's more you as a human, you have to evolve to be successful at all these different stages.
• 1:04:24
  It's not easy.
• 1:04:27
  Like starting a company, like Rick has to be a different person to start a company than he has to be to run a publicly created company.
• 1:04:33
  It's a different level of stress, different headaches, all of it.
• 1:04:36
  Well, it was quite something else to be asked to come back to run the company.
• 1:04:40
  I have no doubt.
• 1:04:41
  And we did.
• 1:04:43
  And by the time we sold the company, this last time that we sold it, we had 14,000 employees.
• 1:04:50
  Out of all the different stages of CPK, which stage taught you the most?
• 1:04:55
  Starting it, running it with 14,000 employees?
• 1:04:59
  Every single step.
• 1:05:02
  Every step changed.
• 1:05:04
  Just as you say, you had to evolve, right?
• 1:05:07
  Every step was a challenge.
• 1:05:08
  So in 2011, you sell to Golden Gate for $470 million.
• 1:05:16
  What was the hardest part of this entire journey?
• 1:05:19
  I think the hardest part was after the sale to Golden Gate.
• 1:05:23
  I've been writing about it and talking about it, and I do in the book, is that
• 1:05:29
  This process of the sale itself, that once you're a public company and you announce that you're pursuing strategic alternatives.
• 1:05:40
  So going private.
• 1:05:41
  Okay, going private.
• 1:05:42
  You start that process.
• 1:05:45
  It's a snowball that builds momentum.
• 1:05:50
  It's not easy to get out of that because you've got lawyers and investment bankers, and they're telling the board, if you don't achieve a price, you're going to get sued.
• 1:06:00
  If you do achieve the price, you're going to get sued.
• 1:06:02
  Okay.
• 1:06:04
  So you finish that transaction.
• 1:06:08
  Well, we believed, based on representations made to us, that we would remain as chairmen.
• 1:06:17
  And after the deal closed, that didn't happen.
• 1:06:22
  And we were completely out, completely out.
• 1:06:26
  And we weren't emotionally ready for that.
• 1:06:29
  We thought sale closes, another liquidity event, people are happy.
• 1:06:33
  Okay, we're remaining as chairman.
• 1:06:35
  They bring in a new CEO.
• 1:06:37
  But as it turned out, the new CEO did not want us to be chairman.
• 1:06:41
  And he negotiated that he was going to be chairman.
• 1:06:45
  And now all of a sudden we were completely out and completely unready emotionally for it.
• 1:06:52
  So then, so what was the hardest part?
• 1:06:55
  Then watching the changes that were made, right?
• 1:07:00
  The symbols, the tone, how he changed the cell, wanted to remake it in his, they wanted to remake it in a different image.
• 1:07:08
  And watch longstanding people have to leave the company, voluntarily and otherwise.
• 1:07:15
  And then ultimately watch it be driven into bankruptcy.
• 1:07:20
  So that was emotionally, the other stuff I could handle, that was harder.
• 1:07:28
  Because your identity is so, this is you.
• 1:07:31
  This business is you.
• 1:07:32
  Absolutely.
• 1:07:32
  And my partner the same way, feels the same way.
• 1:07:35
  How did you not see this coming?
• 1:07:37
  How did you, because you were so good at negotiating favorably for you in all these other events.
• 1:07:44
  It's a little tricky from a legal standpoint.
• 1:07:49
  So we wanted to, we wanted what they call stay in the room and not have a conflict.
• 1:07:55
  So if you declare, okay, I'm going to go negotiate my contract.
• 1:08:00
  Okay, then you're raising a conflict.
• 1:08:03
  You can no longer be in the board, meetings about it.
• 1:08:06
  So we didn't do that.
• 1:08:08
  We played by the book, no negotiation, but we had a handshake with the buyers.
• 1:08:14
  We had a handshake agreement.
• 1:08:16
  In fact, the buyers had already told our entire staff after the deal closed.
• 1:08:23
  The buyers actually called everybody together, said, Rick and Larry are going to be chairman, be around forever.
• 1:08:28
  And then the new CEO was hired, and he said, and he negotiated that he was going to be chairman.
• 1:08:35
  And they said to us, well, you know, you guys can't really be chairman because we made this other deal now.
• 1:08:41
  So we did it on trust.
• 1:08:46
  And the way I pointed out, they didn't do anything illegal.
• 1:08:50
  Or even immoral.
• 1:08:52
  You don't feel like it was unethical?
• 1:08:55
  Well, let's call it.
• 1:08:56
  I think personally, I think breaking a deal, a handshake, is unethical.
• 1:09:02
  It's not illegal.
• 1:09:04
  And the CEO, he never promised us anything.
• 1:09:10
  Meaning this deal we had with the buyers was before the CEO was hired.
• 1:09:15
  So he didn't do anything wrong at all.
• 1:09:17
  He just had the right to...
• 1:09:21
  Why do they think this was a good idea?
• 1:09:23
  I have no idea.
• 1:09:25
  I've not actually, it's bizarre.
• 1:09:28
  But we do know, we do know in the real world that people like to create their own legacy, their own thing, and sometimes they're threatened by founders.
• 1:09:40
  I mean, this is not the first time I've heard of
• 1:09:44
  private equity screwing up an acquisition because of a bad hire or so.
• 1:09:51
  Well, in our, in our, in this case, they put a lot of debt on the company.
• 1:09:55
  Yeah.
• 1:09:57
  And that's not the first time either.
• 1:09:59
  I mean, meaning that's what happens, right?
• 1:10:02
  So this new CEO, and how did they tell you?
• 1:10:05
  Was it just a phone call?
• 1:10:07
  Like, I'm so sorry?
• 1:10:08
  No, no, no.
• 1:10:08
  It was, like I said, we were asked to come have a meeting at a hotel, just the four of us.
• 1:10:20
  One guy from Golden Gate, the new CEO, and Gary and I.
• 1:10:26
  So we weren't being summoned to a coronation, we were summoned to a hanging, right?
• 1:10:31
  And so we sat across the table.
• 1:10:35
  And the CEO said, his words were, I don't have any money or stock.
• 1:10:41
  I have no money or stock for you.
• 1:10:44
  That's it.
• 1:10:44
  That's what he said.
• 1:10:46
  And I looked at Larry.
• 1:10:47
  I didn't have to ask Larry.
• 1:10:49
  And I looked at him.
• 1:10:50
  I said, well, the check cleared.
• 1:10:52
  Do you look at that and wish you had done something different with that negotiation?
• 1:10:57
  Absolutely.
• 1:10:58
  With 20-20 hindsight,
• 1:11:02
  I would have thought it was more important that not worry about the board, in a sense, or just declare we have a conflict.
• 1:11:13
  It's just, hey, we're conflicted.
• 1:11:15
  Okay, we're going to negotiate our deal out front, and you guys approve the deal, or don't we do it?
• 1:11:21
  But all part of it, but wouldn't do it justice on an unwritten handshake.
• 1:11:27
  Going through this, I'm going to ask for advice on two things.
• 1:11:34
  I first want to understand when something like this happens to a founder and it happened to at the highest level.
• 1:11:40
  I think a lot of founders, unfortunately, not a lot.
• 1:11:43
  Some founders lose control of their companies much earlier on than you did.
• 1:11:47
  What is your advice to that person whose identity is so wrapped up in the business now that you've had time to go through it and it probably wasn't easy when it first happened, but it's been years, a few years now.
• 1:11:59
  What's your advice to that founder when everything they know is the business?
• 1:12:05
  My advice is...
• 1:12:08
  think very carefully before you enter into a transaction about what it's going to look like after and are you going to be satisfied with that.
• 1:12:22
  In other words, if you're going to be around, trust but verify.
• 1:12:30
  Do the research on who those buyers are.
• 1:12:34
  Talk to other people who have sold to them.
• 1:12:39
  How did that relationship work out?
• 1:12:41
  The one thing we thought, whether you're interviewing an investment bank or a lawyer, a private equity guy, everybody promises the same thing.
• 1:12:50
  We're unlike everybody else.
• 1:12:52
  We are trustworthy.
• 1:12:54
  Nobody else is trustworthy, right?
• 1:12:57
  So, and my suggestion is anybody that is in that position,
• 1:13:07
  Don't take it at face value.
• 1:13:09
  Do your due diligence.
• 1:13:11
  You said the Golden Gate damaged the culture.
• 1:13:14
  I mean, bankruptcy is damaging in and of itself.
• 1:13:17
  But what did they change that was the worst part of that?
• 1:13:21
  It was a process.
• 1:13:22
  So first step.
• 1:13:26
  First up, and I wasn't around to see it, but we had 32 regional directors who had been with us an average of 14 years.
• 1:13:38
  And my guess is they're probably average of 36 years old.
• 1:13:42
  I mean, they all were homegrown.
• 1:13:44
  Oh, literally, I think 100% homegrown.
• 1:13:49
  And for whatever reasons, and I understand some, many were terminated, others decided to leave.
• 1:13:56
  Okay.
• 1:13:58
  That got blown up.
• 1:13:59
  Okay.
• 1:14:01
  And people, the CEO was brought in from Texas Roadhouse.
• 1:14:05
  He brought people in from Texas Roadhouse or people who with no institutional knowledge and,
• 1:14:12
  So number one, that was a disaster for the brand, for the company, for the culture, for the people.
• 1:14:21
  Two, really critical for the future, I had 10 to 12 leases on my desk ready for execution with the major landlords, Simon, Taubman, General Grove, Westfield, all the people that CPK had these relationships with.
• 1:14:41
  And they had no money.
• 1:14:43
  Right.
• 1:14:44
  And so they leveraged the company.
• 1:14:47
  And so they killed every deal, 100 percent, not even looking at them.
• 1:14:52
  So I heard immediately from the grapevine in the industry, from the developers, oh, screw them.
• 1:15:00
  Yeah.
• 1:15:01
  Right?
• 1:15:01
  It's like, oh, if CPK thinks they're going to get any new good locations, forget it.
• 1:15:07
  And when the good locations come up, the chance of them, us renewing the lease, that's a really high rent maybe.
• 1:15:14
  Yeah, but they ruined all those relationships.
• 1:15:16
  All the relationships.
• 1:15:17
  Yeah.
• 1:15:17
  So now those were the two...
• 1:15:20
  absolute major, major things they did in my miscalculations that, number one, doomed the culture.
• 1:15:29
  Then, where we had all this great training and everything was very polished.
• 1:15:35
  So I think we were pioneers, not the only ones, in what the industry came to call polished casual dining.
• 1:15:45
  And our people were sharp.
• 1:15:47
  white shirts, black pants, ties, right, immediately wear blue jeans.
• 1:15:55
  Well, what message is that?
• 1:15:58
  Now, realize, too, again, apparently he didn't, okay, is our core customer were women.
• 1:16:07
  CPKs were located mostly in the best shopping centers in America, and our core customer were upscale women.
• 1:16:17
  whose word that they used to define CPK was queen.
• 1:16:22
  Right?
• 1:16:23
  If you ask some people, we did.
• 1:16:25
  What word?
• 1:16:26
  We would have liked innovative, creative.
• 1:16:28
  Now it was queen, which is not bad for a restaurant business, by the way.
• 1:16:33
  And...
• 1:16:34
  independent research showed that we have the highest income level customer and the highest education level customer of any chain in America, not just pizza, any chain in America.
• 1:16:47
  So the message was clear.
• 1:16:49
  We were polished.
• 1:16:50
  Our people were trained.
• 1:16:52
  That was the unsung success of CPK, meaning the unstated success, this trust that people had.
• 1:17:00
  Now, all of a sudden,
• 1:17:05
  It's a subtle message that said things have changed, right?
• 1:17:09
  And not for the better.
• 1:17:11
  Now what happens?
• 1:17:12
  So I go into one of our restaurants in Palm Desert and the server comes up to me crying.
• 1:17:19
  Oh, you can't believe they fired our manager and they brought this kid in, right?
• 1:17:24
  Well, what have you done to the culture?
• 1:17:28
  So what do you think is going to happen?
• 1:17:35
  And then change the design of the restaurants.
• 1:17:39
  Now it's a reclaimed wood and green instead of CPK's yellow.
• 1:17:44
  Right now we've got we've got to reclaim wood.
• 1:17:48
  It's looking like a bar and grill, like a Texas Roadhouse.
• 1:17:53
  No peanuts on the floor yet.
• 1:17:55
  But but I don't mean to denigrate Texas Roadhouse, a great company, a great company.
• 1:18:01
  It is for its demographic.
• 1:18:03
  They do great.
• 1:18:04
  OK, that's that CPK.
• 1:18:07
  That's not CPK.
• 1:18:08
  These are these messages.
• 1:18:10
  This was all messages.
• 1:18:11
  This was all the brand that we stood for.
• 1:18:14
  The brand was far more than barbecue chicken pizza.
• 1:18:17
  It was who was our customer?
• 1:18:20
  What is that customer's expectation?
• 1:18:22
  Where's the training?
• 1:18:23
  What do our people look like?
• 1:18:26
  What do they say at the table?
• 1:18:28
  And most importantly, who are the people that want to go to work?
• 1:18:34
  So destroy the culture, you destroy the company.
• 1:18:38
  What's the lesson for...
• 1:18:42
  The founder, think somebody who's just starting out.
• 1:18:46
  All the things you just mentioned that they destroyed, these are such important things for a founder to take into consideration.
• 1:18:52
  So, you know, we can't go back in time and we can't fix what's been done, but what's the lesson for somebody just starting out?
• 1:19:01
  How do they make sure that they build these things that were integral to your success from the get-go, from day one?
• 1:19:10
  All symbols matter.
• 1:19:12
  Larry and I delegated, we trusted people with everything, except the brand.
• 1:19:17
  Except the brand.
• 1:19:18
  Except the brand.
• 1:19:19
  Okay.
• 1:19:20
  Larry and I and my wife, Esther, we never gave up the brand.
• 1:19:25
  All right.
• 1:19:26
  So everything else got delegated.
• 1:19:29
  But we would sit and those messaging, the yellow, the way we designed it, everything.
• 1:19:38
  And we never let that go.
• 1:19:42
  How the brand was positioned, what it stood for, we never gave that up.
• 1:19:47
  We've talked about a few different frameworks.
• 1:19:49
  You mentioned ROC, which was one of the main frameworks.
• 1:19:52
  So respect, opportunity, communication, kindness.
• 1:19:57
  Something else that we haven't gone into, but I think was also part of the culture.
• 1:20:01
  And it's so interesting.
• 1:20:02
  I'm looking at all these different points.
• 1:20:04
  I'm going to go through them all.
• 1:20:05
  But as I go through these and sort of unpack why they're so important, and these are all the frameworks that are sort of discussed in the book as well, the frameworks that built CPK.
• 1:20:16
  As you're telling me this story, I can look at every single one, and it seems like this CEO that was inserted, it seems like the CEO basically broke down systematically every single thing that made CPK good.
• 1:20:33
  I'm thinking about the culture.
• 1:20:34
  Another thing, I'll give you an example.
• 1:20:37
  You said, if our employees came to work motivated and cared, the customer would be the beneficiary.
• 1:20:42
  That's something that you've mentioned before.
• 1:20:43
  Yeah.
• 1:20:45
  And we were speaking about creating a great place for people to work.
• 1:20:48
  Well, all of a sudden, you're letting go or forcing out all these homegrown directors.
• 1:20:54
  You're letting people go that are at the management level at the restaurant.
• 1:20:57
  So you're removing the great place to work.
• 1:21:03
  That is no longer a great place to work.
• 1:21:05
  It just becomes a job.
• 1:21:06
  And then downstream from it just being, quote unquote, a job and not a great place to work,
• 1:21:12
  the customer suffers and the experience suffers and then they go somewhere else.
• 1:21:16
  So all these things that made CPK that you spoke about with like all this passion, these are all the things that basically PE destroyed.
• 1:21:25
  And this is the end result.
• 1:21:26
  It's bankruptcy in a CPK that was nothing like what it used to be when it was public or at its like sort of its heyday, right?
• 1:21:36
  One other idea that I want to go into.
• 1:21:39
  CPK was a work with company.
• 1:21:43
  See, not a work for company.
• 1:21:45
  What does that mean?
• 1:21:46
  That's something we came up with pretty early, before Rock.
• 1:21:51
  It has to do with what really became Rock.
• 1:21:56
  Exactly.
• 1:21:56
  Larry and I described it.
• 1:21:58
  We're work with, we're not work for.
• 1:22:01
  It was always Rick and Larry.
• 1:22:03
  From day one, it was always Rick and Larry.
• 1:22:07
  We wanted, and our home office wasn't called the home office or corporate headquarters.
• 1:22:13
  It was called Restaurant Support Center.
• 1:22:17
  And then later when we learned some of the terms, then we had what we call a reverse pyramid.
• 1:22:24
  That was later business.
• 1:22:26
  We didn't know that, but later it was, right, that it was reverse pyramid.
• 1:22:32
  And we put the employee at the top.
• 1:22:34
  As opposed to the leadership at the top.
• 1:22:36
  And we felt that.
• 1:22:37
  And the thing is, people, you know, you can talk the talk.
• 1:22:42
  The question is, do you walk it?
• 1:22:45
  And I think our success was it was real.
• 1:22:49
  People believed it.
• 1:22:50
  We believed it.
• 1:22:51
  We weren't trying to sell anybody on something that we didn't believe.
• 1:22:55
  And we were, you know what?
• 1:22:57
  People had FUD.
• 1:22:59
  In the end, people love working there.
• 1:23:02
  You know, it's great.
• 1:23:03
  People that work with us would say, it's so great when somebody asks me where I work and I say, CPK, they say, it must really be fun to work there.
• 1:23:13
  If you think about all these different frameworks, so ROC, Reverse Pyramid, a work with company, not a work for company, these all build the culture.
• 1:23:25
  All these, the way that you look at everything, they all come together, they build a culture.
• 1:23:33
  How do you define what a good culture is?
• 1:23:36
  Because there's so many different pieces.
• 1:23:37
  It's hard for people to define.
• 1:23:38
  And now I see it as it's come together.
• 1:23:41
  But how do you define it?
• 1:23:42
  Well, the way I think about it is this.
• 1:23:45
  When I talk about how naive we were when we go in, here we are.
• 1:23:50
  We've got these two lawyers.
• 1:23:52
  Okay.
• 1:23:52
  We are clever guys.
• 1:23:53
  We say, hey, let's try this new style of pizza, right?
• 1:23:56
  Then we come, we say, oh, not only are we going to try this new style of pizza, but we're going to build an international chain based on this.
• 1:24:04
  Now realize at that time when we're doing this and we're dreaming this and we're signing the leases and signing our homes away, we don't have a clue, not a clue, right?
• 1:24:14
  We think we're clever guys.
• 1:24:16
  We have this, I call it the concept.
• 1:24:20
  Now we get in it.
• 1:24:22
  We have this chef we don't get along with.
• 1:24:24
  Okay.
• 1:24:25
  We see the clashing between the front of the house and the back of the house.
• 1:24:29
  Okay.
• 1:24:30
  In the process, we have to fire the chef.
• 1:24:32
  Now it's us.
• 1:24:34
  And I realized for the first time that it's not, if it were the concept, if that's all we have is a concept, we're not going to make it past the first two months.
• 1:24:46
  Okay.
• 1:24:47
  We're running a business.
• 1:24:49
  Okay.
• 1:24:50
  And the business is going to depend on people.
• 1:24:55
  And that's where we shined.
• 1:24:58
  That's where Esther and I and Larry, we took this thing.
• 1:25:01
  And people felt our passion.
• 1:25:03
  Esther was at the front door every night.
• 1:25:06
  Right.
• 1:25:07
  I mean, I was home with our two-year-old daughter at night, and she was working the front door.
• 1:25:12
  And Esther was a great hostess.
• 1:25:15
  Right.
• 1:25:16
  But we were, people felt our commitment.
• 1:25:19
  The investors felt our commitment.
• 1:25:21
  We were all in, I mean, and loved it.
• 1:25:25
  But in answer to your question, the difference, that big light bulb was, it's never going to be about the concept.
• 1:25:34
  It's about the people.
• 1:25:36
  you found a way to take those ideals that you had when it first started and maintain them across at one point fourteen thousand people how do you do that because we got people that believed it and could sell our vision
• 1:25:55
  Everybody loved coming to work.
• 1:25:57
  We were just talking about yesterday.
• 1:25:59
  I had my son, and I was in Palm Beach Gardens, CPK.
• 1:26:03
  It's been there since 1993.
• 1:26:05
  The assistant manager, he's been with us 26 years.
• 1:26:12
  He came in another server who's been with CPK for 23 years.
• 1:26:17
  And we were talking about and reflecting about how much fun it was, okay, how the opening teams would be put together cobbles from different areas and people would love going to the openings.
• 1:26:30
  And it was fun.
• 1:26:32
  And people loved going to work.
• 1:26:35
  That's how it happened.
• 1:26:36
  And people believed in the vision and, and, and, and, and, and, and, and we were committed to quality.
• 1:26:43
  And there was one period, we could talk about a down period for a moment, which I think is good.
• 1:26:51
  The low point, other than that last sale, the low point was,
• 1:27:00
  After we overexpanded with CPK, I'm sorry, with PepsiCo, after we overexpanded with PepsiCo, and they pulled the plug, and now here we are, we had built up all these teams of people, all these real estate people, right, to build all these restaurants.
• 1:27:18
  Now we had none.
• 1:27:19
  Now we were firing people, laying off people for the first time.
• 1:27:25
  And PepsiCo said, we need to put, you guys don't know what you're doing.
• 1:27:28
  We need to put somebody in to really run it.
• 1:27:32
  And we allowed that.
• 1:27:34
  And they did that.
• 1:27:37
  And then they started cutting costs.
• 1:27:40
  First time we ever had a deal with that.
• 1:27:43
  And they put in this cheese that were frozen cheese pellets.
• 1:27:49
  Instead of our fresh mozzarella.
• 1:27:54
  And I was in Miami, actually.
• 1:27:55
  What happened was when I would travel, I would always meet with managers, take them to dinner, sitting with a group of managers.
• 1:28:04
  And I'm saying, you know, we're still committed to quality because Larry and I are trying to keep the spirits up.
• 1:28:08
  Really, really tough time.
• 1:28:10
  But we're being cheerleaders, right?
• 1:28:13
  And I see, I'd say, you know, we're still committed to quality.
• 1:28:16
  And I see one woman manager.
• 1:28:18
  I look over another manager.
• 1:28:20
  I roll her eyes like, does this guy really believe that?
• 1:28:23
  Yeah.
• 1:28:24
  Okay.
• 1:28:24
  And I came back to the hotel and I called Larry and I said, we are really screwed.
• 1:28:29
  Like I use something stronger than screwed.
• 1:28:31
  Okay.
• 1:28:32
  But that was the low point.
• 1:28:36
  And you know why it was a low point?
• 1:28:38
  It was a low point because we broke our bond with our employees, not because we broke the bond with the customers.
• 1:28:46
  I've always believed it.
• 1:28:48
  It's our people that made us successful.
• 1:28:53
  That's the most important.
• 1:28:54
  And at that particular point, you just felt disingenuous because you know that Pepsi is cutting, PepsiCo is cutting costs.
• 1:29:01
  They're cheapening the product.
• 1:29:04
  And everybody's smart and they know it.
• 1:29:06
  Right.
• 1:29:07
  And I'm sitting here trying to sell the word heaven.
• 1:29:10
  I go, oh, this is not good.
• 1:29:12
  So let's fast forward to today.
• 1:29:14
  So obviously your book, The California Pizza Kitchen Story, How Two Federal Prosecutors Changed the Way America Eats Pizza.
• 1:29:21
  That's out right now.
• 1:29:23
  And I'll drop all the links to Amazon and wherever else you can get books.
• 1:29:27
  It's available everywhere.
• 1:29:28
  But outside of writing this book, what are you focused on today?
• 1:29:34
  Like what was, you know, it's been a couple of years now since this happened, especially since you were unceremoniously kicked out.
• 1:29:44
  So what was the next step after that for you?
• 1:29:47
  So after the FCPK, Larry and I started another restaurant business.
• 1:29:53
  It was a seafood concept.
• 1:29:56
  in Brightwood, neighborhood of Los Angeles, called Bottlefish.
• 1:29:59
  And we built it into, it was Esther and I, really, at that point, and built it into a successful business.
• 1:30:08
  And COVID hit.
• 1:30:10
  And that was the end of it.
• 1:30:14
  People were being paid to stay home.
• 1:30:16
  I couldn't get people to come back to work, couldn't make a deal with the landlord.
• 1:30:20
  We thought we should be paying full rent.
• 1:30:22
  Yeah.
• 1:30:23
  And the business never restarted.
• 1:30:27
  Would you ever start or bet on another restaurant?
• 1:30:32
  My wife in the background here is waving absolutely no.
• 1:30:35
  He's saying absolutely no?
• 1:30:37
  There's your answer.
• 1:30:38
  You've done your time.
• 1:30:39
  You've committed so much of your life to building this, to building, I mean, such an incredible brand.
• 1:30:47
  What's your focus now?
• 1:30:49
  My focus now is as the author, right, and getting this story out.
• 1:30:56
  What's the part of the story I care about?
• 1:30:58
  It's the culture.
• 1:31:00
  So I am so rewarded now.
• 1:31:03
  My biggest reward is hearing stories from people that work from CPK.
• 1:31:09
  Go on LinkedIn.
• 1:31:10
  They are writing how it was the greatest job ever, how it affected them, how it's affected their family, how they carried that culture with them to other organizations.
• 1:31:24
  This is so gratifying to me.
• 1:31:27
  I'm really having more fun than I've had in years.
• 1:31:31
  What did you learn about yourself?
• 1:31:33
  First of all, why did you choose to write this book?
• 1:31:34
  Because I interview a lot of authors, a lot of ex-CEO founder authors.
• 1:31:41
  And for people that don't understand, it is probably one of the harder things that you'll ever have to do.
• 1:31:45
  It's like a lot of work.
• 1:31:46
  to put together a book, to make something, to take all of your life and put it into a few pages and then market it and put it out there.
• 1:31:55
  And then you're doing the audio.
• 1:31:57
  It's a fair amount of energy towards this thing.
• 1:32:00
  So what was the reason why?
• 1:32:03
  At first, it was because everybody who's heard my story said, you should write a book.
• 1:32:10
  And not only the CPK stories, but the law stories.
• 1:32:14
  There's lots of those too, right?
• 1:32:16
  And so I would tell these over the years, and I've always been a storyteller.
• 1:32:21
  And I was a writer in the sense that I was a legal writer.
• 1:32:24
  I wrote briefs in the Supreme Court.
• 1:32:26
  What are those?
• 1:32:27
  Or writing arguments.
• 1:32:28
  They're arguments.
• 1:32:30
  Meaning you're trying to sell a story when you're writing a brief.
• 1:32:35
  in a court, or writing a motion, you're trying to make a winning argument.
• 1:32:41
  So it was natural for me.
• 1:32:43
  But when I wrote the book, I had no notes.
• 1:32:46
  I had no diary.
• 1:32:47
  I did it all from memory, except when it became public issues.
• 1:32:52
  The public company was easy because you find the filings online.
• 1:32:57
  But other than that, it's all done from memory.
• 1:32:59
  So it was cathartic to do it.
• 1:33:03
  And why did I write it?
• 1:33:05
  is I really wanted to get this message out about the culture.
• 1:33:11
  That was really it.
• 1:33:12
  I wanted that.
• 1:33:12
  There was something for people to learn that I felt that I could impart and help others with.
• 1:33:18
  Why was that message so important to you, for people to understand the culture of CPK?
• 1:33:24
  Well, I guess in part because it was destroyed, right?
• 1:33:28
  that I was so unhappy to see that it wasn't happening, you know, that to see it not be carried on, but yet know that there were still people there that really did care.
• 1:33:45
  And so that all became really, really part of it.
• 1:33:50
  And then I wrote the book before CPK was sold to new buyers,
• 1:33:57
  And fortunately, there are new buyers now that bought the company last December and who are investing a lot of money in it and trying to recreate what made CPK great.
• 1:34:10
  Have you spoken with them?
• 1:34:11
  I have, and I'm optimistic about it.
• 1:34:15
  I think they care about it.
• 1:34:16
  They bought an iconic brand.
• 1:34:18
  It's been 41 years.
• 1:34:20
  They believe in it.
• 1:34:21
  They're doing some fun stuff.
• 1:34:24
  One, they're working on the culture and the restaurants.
• 1:34:29
  Two, I read recently...
• 1:34:32
  that they're doing vending machines in the airports and college campuses.
• 1:34:37
  There's some in the airports.
• 1:34:38
  Now they have great technology that cooks a pizza in 90 seconds.
• 1:34:44
  And there's also like doing the Kung Pao spaghetti and the mac and cheese.
• 1:34:48
  So it's interesting.
• 1:34:50
  I've talked to the guys, the group that brought it, it's called Consortium Brands.
• 1:34:54
  Yeah.
• 1:34:57
  And then another group called Convive Brands, they're running the restaurants, and they're backed by Eldridge, which is a Miami-based company.
• 1:35:09
  And I like everybody I've talked to there, and I think they're absolutely committed to it.
• 1:35:14
  They paid a lot of money for it.
• 1:35:16
  They believe it's iconic, and it's the first time that I've been excited and enthusiastic in the past 15 years.
• 1:35:24
  I love that.
• 1:35:25
  Are you going to work with them a little bit in any capacity?
• 1:35:28
  I know they want to talk to me about what made CPK great.
• 1:35:34
  I guess my response is by the book.
• 1:35:36
  By the book.
• 1:35:37
  Well, the book does, but the book does.
• 1:35:39
  I mean, if somebody picks up the book, if you want to know, if somebody wants to know what made CPK great, it's all in the book.
• 1:35:49
  And what made it great was the people.
• 1:35:51
  But it was a combination.
• 1:35:53
  It was a strong vision plus people that could carry it out.
• 1:35:59
  Who did you write this book for?
• 1:36:02
  I probably wrote it for myself.
• 1:36:04
  Meaning, you know,
• 1:36:07
  It's gratifying.
• 1:36:10
  It's a gratifying thing to do.
• 1:36:12
  It was cathartic.
• 1:36:13
  Yeah.
• 1:36:15
  It took a long time.
• 1:36:16
  I sat, I sometimes sat for, I would sit for 15 hours and barely get, I was just writing, writing away.
• 1:36:24
  Was it hard, some parts of it, to write, to sort of relive some of this?
• 1:36:29
  I think maybe so.
• 1:36:31
  Maybe the hard part was reflecting on what happened after we sold it and what happened to the people.
• 1:36:41
  And so it made me, you know, your question is, should I have sold the company, right?
• 1:36:50
  And I guess if you go to my deepest, deepest feeling about that,
• 1:36:57
  If I knew that we weren't going to be involved, we wouldn't have sold it.
• 1:37:04
  You can't go back in history and you can't change things.
• 1:37:08
  But at the end of the day, this is the way that I look at it.
• 1:37:12
  It's a, it's a good end to the story because now it's moving in the right direction.
• 1:37:16
  And now there's a good group that is going back to the original CPK culture and they understand and they want your help to figure out how to do it properly and to build it to the brand that it used to be.
• 1:37:28
  And at the same time, um,
• 1:37:32
  a lot of the lessons that you've learned over your career, not all of them are easy lessons to learn, but these you're passing on so much wisdom to a younger generation of entrepreneurs who are going to navigate all the same difficult things you had to navigate.
• 1:37:47
  So,
• 1:37:48
  I hope that happens because that was the purpose.
• 1:37:54
  It's the reason I'm doing this today.
• 1:37:56
  I know, yeah.
• 1:37:59
  When I said I do it for me, it's sort of interesting reflection.
• 1:38:04
  I didn't think of it that way.
• 1:38:06
  But the truth is,
• 1:38:08
  Why does one do this?
• 1:38:10
  It makes you feel good.
• 1:38:11
  Yeah, yeah, yeah.
• 1:38:13
  It makes you feel good.
• 1:38:14
  It makes you, it makes you, but it also, it's like, it's such a beautiful thing to pass on all, all this experience to somebody who's trying to figure it out.
• 1:38:23
  It's so gratifying.
• 1:38:24
  And it's so gratifying.
• 1:38:25
  When I, when I talked to people with CPK for 20 years and when I went back for 20 years
• 1:38:32
  The book launch.
• 1:38:33
  One guy I signed the book for, gave the book to, but signed it for 38 years.
• 1:38:41
  That's rare.
• 1:38:42
  I think that's very rare for somebody to be with one company for 38 years.
• 1:38:46
  It's becoming increasingly more rare, probably because there's a lot of reasons why.
• 1:38:51
  One of them being
• 1:38:53
  I don't think a lot of brands have done what CPK did, where people really like coming to work and see it as more than work.
• 1:39:02
  I think that's rare.
• 1:39:03
  I think it's very, very rare.
• 1:39:04
  You probably have peers that you've worked with.
• 1:39:07
  You see other businesses, other founders, CEOs.
• 1:39:10
  This is my greatest pride.
• 1:39:12
  When you go to the restaurants, do you tell them who you are?
• 1:39:16
  Well, they know me now in certain ones, right?
• 1:39:19
  Other than that, they wouldn't have.
• 1:39:21
  But I was able to keep, to everybody's credit, I still have my management dine-in card.
• 1:39:28
  Really?
• 1:39:29
  Yeah, right.
• 1:39:30
  So there have been times where I haven't signed anything to the end, and I pull out the card, my free, my free, I eat for free card.
• 1:39:39
  If you could just pass on one message to somebody who's working at CPK.
• 1:39:44
  who's been a lifelong employee, what would that be?
• 1:39:47
  Keep the faith.
• 1:39:50
  I think they're feeling it now.
• 1:39:52
  They're feeling it.
• 1:39:54
  They've been battered.
• 1:39:56
  Where can people go so they can get the book everywhere?
• 1:40:00
  Where else can they go to connect with you more, see more about the work that you're doing, any socials, website that they should go to?
• 1:40:07
  RickRosenfield.com.
• 1:40:09
  I've got my website and I'm there.
• 1:40:10
  And I communicate with people.
• 1:40:12
  I answer questions
• 1:40:17
  Questions.
• 1:40:19
  The last thing I always like to ask, you've had such an incredible career.
• 1:40:22
  You've gone through like all these different roles as a founder, as a CEO, learned so much.
• 1:40:28
  What would be the most important lesson that you'd want to tell your 20-year-old self?
• 1:40:32
  If you could go back and just say this one thing to them, what would it be?
• 1:40:35
  Follow your dream.