09/13/2016 | By John Cumbelich
Kent and I grew up together in the 1970s and 1980s. Same neighborhood. Same school. Same church. My dad was our little league coach and his dad owned the restaurant where we all went after games or birthdays or boy scouts for pizza. Kent and I have known each other for over forty years.
After college, Kent took over the family business and eventually, carefully, added store #2. He hired more people, took more risk, and like all successful entrepreneurs, bet big on himself. That later led to stores #3 and #4. More employees. More payroll. More risk. With more pizza came more notoriety, awards, and more customers. Kent had something good going on.
Kent reached out to me several years ago and asked for my help when he wanted to grow larger, stretch farther and make a still bigger bet. We extended the search for new locations beyond his historic SFO Bay Area turf. Ninety miles away in Sacramento we found something – a three-year old restaurant building abandoned by one of the national chains. It was located in front of a new movie theatre. Next to a freeway that extended the site’s reach. It had great parking and visibility. It was 2010 and everyone was scared to death about the historic Great Recession, but Kent said “Let’s do it.” OK. More employees. More payroll. More risk. More pizza. But no partners; just Kent.
Something happened. Customers flocked to the restaurant and said “I grew up going to your Bay Area locations.” It was an unexpected homecoming. His customers, the ones who ate pizza after little league games and team parties 30 years before had grown up, moved to Sacramento and now they were bringing their kids. Hundreds of them. Maybe thousands. Store #5 immediately became #1 in sales, and stayed there.
This was a revelation. Our customers are loyal. Our brand has legs. Our brand has currency. Kent, the one-man-band with no partners, just great employees that he loved and cared for, and a great talent for his restaurant business had grown into a true entrepreneur, a risk taker, a business builder, a pillar of each and every community where he opened a business.
Two years later, we found store #6. Also located in greater Sacramento. More payroll. More jobs. More taxes. More risk. Same thing happened. Loyal customers from 30 years ago rediscovered him.
Last year, we moved further east and found store #7 in Reno. Another renovation project in which Kent re-imagined a broken chain restaurant building and invested his creativity, his team, his capital and his talent.
Reno shot out of the gate and has been the top performing unit in the chain every week and every month since it opened. But because of the pro-business climate in Nevada, because Kent no longer has to pay $15 per hour minimum wages like he does in California to waiters and waitresses already making $50 to $100 per hour in tips, the Reno store realizes two to three times what he achieves in his other very successful locations. Kent is no longer being penalized by his state for being the guy who employs hundreds of people seeking work in the restaurant industry. Nevada does not tax away his ability to build more restaurants and create more jobs, like California.
My friend Kent, the risk taker, the entrepreneur, the guy who bet on himself and who has literally employed thousands of waiters, waitresses, bartenders, cooks, delivery drivers, bus boys, assistant managers and general managers over the past few decades; the same guy who has given so many happy memories, so much flavor and quality to his many communities; that same guy looked at the numbers and he told me – “Let’s do more in Reno. Then let’s go to Las Vegas. Maybe Phoenix and Salt Lake and Texas next.”
Kent is leaving California. This guy, the prototype build-a-business-from the-ground-up guy that EVERY city and EVERY state should seek to attract is leaving. Kent is going to bet big, take risk, hire hundreds of employees, pay his taxes, grow with his communities and invest deeply in them, and he is leaving because the politicians forgot that jobs are created by smart risk takers. Guys who go where they are wanted and who look the numbers every day, and who understand incentive and disincentive.
Without making any value judgement, I’m sure that the politicians who thought that they were helping the little guy when they heaped health care costs and skyrocketing minimum wage costs on employers didn’t spend thirty or forty years building a business from the ground up. I’m sure they think they know better than the guy who did. But Kent and countless other smart, proven business builders like him are leaving California because of it. And with them go the dreams of a job with a great company for many Californians to places like Nevada and Arizona and Utah.
About John Cumbelich & Associates
John Cumbelich & Associates is a San Francisco Bay Area based firm that provides commercial real estate services to Fortune 500 retailers and select owners and developers of retail commercial properties. The firm's expertise is in developing store networks for retailers seeking to penetrate the Northern California marketplace and the representation of premier Power Center and Lifestyle developments.