LARRY FLAX of CPC at WVRC on October 29th
ED JACKSON led the Pledge and once again, he stepped in as a greeter for someone who didn’t show up! Thanks, ED, but please remember if it’s YOU! PP HOMER NEWMAN gave the Invocation, with some suggestions for clarification; Our Father who art in Heaven (that’s where he is), Hallowed be thy name, Thy will be done, on earth as it is in Heaven. (all this are blessings to him), Give us this day our daily Bread (Thank God for that), (and then we get to the thing Homer is particularly interested in) and forgive those who trespass against us (the connecting word here should be AS they trespass against us (It’s a comparative thing) (and to the extent we forgive others, we will be forgiven) Amen. Good thoughts, HOMER Thank You. LENNY once again fearlessly, apparently, came forward, having been preceded by the somewhat startling announcement that this was the hat he wore in Italy in 1968 during the ceremonies for his Conducting and Lo & Behold, Prexy ED had another great hat to demonstrate his point! This important but useless information was roundly appreciated by all. But WVRC still provided God Bless America, which we do pretty good.
We had a Visiting Rotarian from Germany, Matt Schoenermack, who spoke briefly about his home club. Other guests included SUNNY, who came with LENNY, and Misaki Masada, our Ambassadorial Scholar from Japan. He is still looking for accommodations that are closer to UCLA than Santa Monica, from which he currently bicycles. PAT ANDERSON was with PDG ANDY, and SHIRLEY MORE came along with PP PETER. PP STEVE SCHERER once again introduced his Special Guest, Jim Crane, who is in Insurance and also Chairs the local Gideon Society. PP MIKE NEWMAN brought his Special Guest, Jeff Bruner, who is with UBS. Our Speaker, Larry Flex, was accompanied by Sara Grover, who is a Sr. VP for Marketing and Communications with CPC.
The Head Table was populated by a singularly disreputable group, which included PP JIM COLLINS, ED JACKSON, CURT SMITH, STEVE PETTISE and our Speaker, Larry Flax. In the brief Q&A that followed their introductions, my (secret) notes indicate that at least some of those so situated were to be identified as having attended HS in LA but probably they were too embarrassed to be highlighted so freely, so no guesses were accepted, sad to say.
There were several announcements:
Prexy ED reported on A Turkish Delight, the great party held at the lovely home of NEVIN SENKAN this past Sunday evening. The food and wine were excellent, of course, and we really had time to visit with a lot of other members. I did hold my breath for eight minutes, hoping to be called upon to play the violin, but there was another young lade there who got the job instead.
The party was to benefit hearing impaired children in Turkey specifically, to buy testing equipment for them and we raised $2,000! Since NEVIN and her husband, Selim, provided both the food, wine, and location, we thank them for a wonderful event.
Nov. 10th is the next District Breakfast. We have a table for ten, with 2 seats still open. Call DON NELSON if you can go, please.
Nov. 11th will be the next Auxiliary Meeting, at the home of ELOISE SISKEL, and the subject will be “Jewels you own and Jewels you would like to own” Reservations with MARGE DOWNIE, of course, and everyone is encouraged to bring their own jewels to be evaluated!
DECEMBER 10TH, Thursday evening will be the Christmas Shopping Spree: It’s a lovely way to get started in the Christmas spirit, since about 25 Rotarians and spouses will take kids from the Salvation Army housing to buy Gifts for their families. We provide $25 apiece they usually spend more than that and escort the kids on their shopping trip. It’s preceded by dinner, and really is a nice way to get into the spirit of giving. MIKE YOUSEM is in charge so particularly for those who haven’t done this before (newer members, that is), please save the date!
The biggest event of the remainder of year 2009 is on Friday, November 20th. That is the SC-UCLA Rally which will be at the Omni Hotel, downtown. Since WVRC is a Co-Host, we really need ALL graduates of BOTH schools to stand up and be counted, PLUS attending on the 20th! We will carpool from Westwood Methodist and Prexy ED has led us to expect that Traveler will announce his engagement to Trigger. Since I’ve already let the cat out of the bag, so to speak, that Traveler will be hoisting an overreaching arm holding ELLIOTT TURNER in appropriate position to provide any necessary cleanup, this combo of both spectacular and touching events should more than repay the price of admission. Summary You better go, or you’ll have to put up with endless phone calls and perhaps some public humiliation should you still hesitate…
In an unexpected display of pent-up good sense, Prexy ED then made a statement indicating if I got this right that we haven’t had any Irish history in a while, and that he intended to keep it that way. Unfortunately, this was followed by an Actuary joke, or whatever you may wish to name it…An actuary, a lawyer and an accountant are discussing the merits of having a mistress or a wife. The lawyer reckons it is better having a mistress, because the wife can take everything if you should come to a divorce. The accountant reckons it is definitely better having a wife, from a taxation perspective. The actuary reckons it is better having both, because when you are not with the wife, she thinks you are with the mistress, and when you are not with the mistress, the mistress thinks you are with the wife and that way, you can spend more time at the office.
The Speaker: We had a double introduction of the Speaker. Program Chair STEVE PETTISE introduced PP JIM COLLINS, who is well-acquainted with our Speaker, Larry Flax. STEVE reminded us that our JIM is really an iconic figure in the restaurant business. He joined WVRC in 1953, and is a leading local philanthropist, particularly in the field of Education. He founded one restaurant chain, bought Sizzler when it was composed of three stores, and grew Kentucky Fried Chicken
in Australia, Florida, and most importantly, Southern California. PP JIM came forward, saying, “If I’d known all that, I‘d have brought my wife along so she could hear it!” He pointed out that he had known Larry Flax a long time, and while he was older than Larry, and had been in the food business longer, he “wasn’t as successful”. JIM has three CPC stores that he regularly patronizes, so he’s a real fan. Larry and his partner Rick started out as co-CEOs, built it up into a terrific company and had a chance to get involved with Pepsi Cola, which Jim does also. Jim further noted that Larry, after getting a good education in Law at USC, is glad he’s no longer doing that, and JIM reminds us that he’s glad he’s no longer a Civil Engineer!
Larry began by saying it was humbling for him to be introduced by JIM, from whom both he and his partner Rick had learned so much and he reminded us how lucky we are to have JIM as a member of our Rotary Club. He next pointed out that by his partner not being present, he, Larry, could take credit for a lot of things that Rick actually did…They have been partners for 35 years, first in Law and then in the restaurant business. He brought along a short video about their company, which then played. The video noted that CPC had led the industry in sales increase for the last 12 quarters quite a record, obviously. He grew up on the Westside, graduated from Hamilton High, and went on to USC. They now have 268 restaurants worldwide, all having started with their first restaurant in Beverly Hills. He feels that Westwood Village has lots of growth potential. Their restaurant interest started in 1984, after being federal prosecutors together and then law partners. They enjoyed the law, but didn’t want to pursue it indefinitely.
He recalls one trial they handled in SFO which lasted 2 months. This was during the Democratic Convention. Rick had a first baby at home, and Larry was dating a girl in San Antonio they were up at 5:30, then to trial, and to bed at midnight not much fun, and it really was getting old. They had been in restaurants a little bit before that, with Derek’s, as silent partners. They did learn how to lose a lot of money. They did have fun giving away food to lots of movie stars having them grace their place, but not paying, unfortunately.
When Derek’s closed, they began thinking about another upper-level venue, perhaps something that could become a chain. Alice Waters, at Chez Panise in Berkeley, had introduced California style pizza, and then Wolfgang Puck introduced pizza at Spago. Rick and Larry saw how popular this was becoming and wondered if they could do the same, but in a much more casual atmosphere. An early concern was what to name their coming operation, and Larry came up with California Pizza Kitchen. There already was NY Style, Boston Style, Chicago Style so why not California? They finally met at 0630 at a deli in the Valley something they had done only once before but Rick was still doubtful. That night they had dinner with a couple from Providence, R.I. and gave them the names they were considering. When they came to CPC, their guests immediately said, “That’s It!”
They opened on South Beverly Drive, taking the advice of their chef and an architect that it would cost about $200K. Construction soon reached that figure, and then they learned that was without any interior, furnishing, equipment, etc. They had signed a lease covering 1700 square feet, using their homes as collateral and if it failed, they were dead broke! So they went to their attorney, telling him they actually needed $500K total. He advised them to form a partnership, in which the general partner had 50 % and the various investors had the rest. They had a basic decision as to whether any investment should be for all future restaurants, or just this one, and decided on just one. When they opened, they soon found that they simply couldn’t practice law AND operate the restaurant, so they closed the law practice. Six months later, they opened a second, this one in Beverly Center. At this point, the same lawyer suggested they convert to a corporation, so they did, setting a five million dollar value on the company. They next gave all the limited partners the right to be bought out, making a 20% increase on their original investment. Only two stepped out one for 5K and the other for 10K. They then proceeded to sell stock, to build more restaurants, based on the five million dollar valuation.
Fast forward to 1992. They had 300 stockholders, and 26 restaurants. Their lawyer said it was now time to go public! About then they got a call from Pepsi Cola. Pepsi was now eyeing the casual dining sector, which was starting to grow. After some negotiations, they bought half the company which is all they wanted at a valuation of 140 million dollars. This meant that any of their stockholders, if they wanted to cash out, would receive 22 TIMES their investment!
Pepsi gave them all the money they needed, saying to open restaurants. So they had opened 86 restaurants by 1995. However, during this rapid growth, they made a lot of mistakes. At this point, Pepsi could not get credit for any of these losses, since they only owned half the company. Pepsi wanted to buy the rest, and at first they didn’t want to agree. But they did agree, after six months, with the condition that Pepsi could not sell the company within five years. Pepsi installed a new CEO, with whom Rick and Larry got along just fine. Shortly afterward, a major bottler named Cisneros in South America, switched completely to Coca Cola, causing Pepsi stock to drop 10 points.
Pepsi had to do something, so they decided to spin all the restaurants off. The five year prohibition still was in effect, so Larry and Rick learned that Pepsi had appointed a lawyer to handle the sale of their company. After some hassle, he informed them they had just won the lottery! They closed the poorly-performing branches, and ended up with a brand new company, entirely out of debt, and having only profitable stores. Now it was time to go public, again! They have franchises at Dodger Stadium, Staples, Angels Stadium and many more it’s amazing what the brand can do.
Q&A Are your recipes secret? No, we have three cookbooks out. And we produce over 40 different pizzas. What is the secret of you two working together so well? Before we became business partners we were, truly, the best of friends. In the beginning of their relationship they had no conflicts at all. We have common interests. Rick is the left brain of the group the financial side. Larry favors the creative, or right brain side. Essentially, it comes down to realizing that you are better with two people than by yourself. We have no interest in being right, just in getting it right. The way to really make money is finding the right answers, not winning the argument. Somebody shouted out, “Sign him up as a member” and YOE agrees with that!
Next week, our Speaker is Corporal Kane Roberts, on his experiences from a year’s tour of duty in Iraq should be another good one!
And final words of Wisdom from you-know-who: Never go to a doctor whose office plants have died.