Wolfgang Puck’s dining revolution

November 21, 2013, 12:32 PM UTC

It’s impossible to think of California cuisine without thinking of Wolfgang Puck. The man who popularized open restaurant kitchens, Puck, 64, introduced fine dining to the masses on TV and became one of the first celebrity chefs (a term he despises). Through his privately held company, whose revenues exceeded $400 million last year, he has parlayed his name into restaurants, frozen pizzas, appliances, cookbooks, and more. His story:

I was born in Austria, and my mother was a professional chef at a resort. Every summer I would visit her at work and spend time in the kitchen. I liked pastries more than anything. When I was 14, I wanted to become an architect, but my parents were poor, and we decided I should get a job in a pastry shop. So I left home when I was 14, to apprentice in a hotel kitchen in Villach, Austria, and never went to high school.

Three weeks into my apprenticeship, we ran out of potatoes in the kitchen, and the chef decided to blame me. He fired me and told me to go home. It was the darkest day of my life, and I decided to kill myself in the river. But as I stood by the water, I thought, maybe I’ll go back tomorrow and see what happens. The owner of the hotel took pity on me and sent me to his other hotel to work.

I fell in love with the way the French cooked with wine and decided to seek work at a three-star restaurant. In 1968 the first one that said yes to me was L’Oustau de Baumanière in Provence, where Raymond Thuilier became my inspiration. He was the chef-owner, wrote cookbooks, and cooked with fresh vegetables and fish from the market.

After that, I worked in Monte Carlo and at Maxim’s in Paris. In 1973 the dollar was high and the French franc was low, so I decided to go to the United States. I found a job at La Grenouille in New York City, but after working in all those fancy three-star restaurants, I didn’t want to cook in a bistro making French fries. I wanted to do fine dining.

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I had always wanted to go to California, so after getting my green card, I took a job at Chez François in downtown Los Angeles. It was 1975, I was 26, and I wanted to open my own restaurant. So I took a second job to save money for that. I worked 8 a.m. to 2:30 p.m. at Ma Maison in West Hollywood, jumped in the car to go downtown, and worked till midnight at Chez François.

Guests started coming into the kitchen at Ma Maison, saying the food is suddenly so good. Patrick Terrail, the owner, asked if I wanted to work there full-time, but I thought two jobs would get me more money, so I said no. But when the manager at Chez François presented me with a new menu, I said, “I am the chef, not you,” and I left to work full-time at Ma Maison. It was in such bad shape, my first paycheck bounced.

I sat down with Patrick, and he agreed to give me a lower salary and 10% of the restaurant. We did $18,000 a month when I started, and when I left in 1981, we were doing $330,000 a month. Ma Maison became well known, and I was serving celebrity guests like Jack Lemmon and Orson Welles. But I wasn’t the principal owner, and wanted to be in charge. In 1981, I found a place on Sunset Boulevard and told Patrick that we needed to form a new company. We couldn’t come to an agreement, so I left.

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I had started a cooking school at Ma Maison, and my students were lawyers, dentists, and doctors. They helped me raise $500,000, and I borrowed $60,000 from the bank. In January 1982 we opened Spago, and it became an instant success. I had no more money in the bank, so we were lucky to be successful right away. I didn’t think it was a gamble doing it. It would have been a gamble to do nothing because I couldn’t have secured my future otherwise.

Spago was casual and chic, using beautiful California-inspired ingredients in the food. We made it upscale with white tablecloths, and the pizza was made with ingredients like smoked salmon and white truffles, things that were not the usual.

I put in an open kitchen so I could greet the customers, see when they finished their first course, and prep the next course. I wanted to give the guests something of a show, not just their food on a plate, and it became popular with Hollywood people. Swifty Lazar started to do his Oscar parties with us. It took three months to be profitable.

By the fall of 1982, a Japanese company called WDI came to me and said, “We want to open a Spago in Tokyo.” I hadn’t trademarked the name and didn’t have the money to fight them, so I said okay, let’s do it together. I gave them a 20-year license, and we opened Spago in Tokyo in 1983. I owned a third of it, but it didn’t make much money. It doesn’t exist anymore.

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At the same time, I opened a restaurant in Santa Monica. I got the idea to open a Chinese restaurant with Western cooking techniques. We opened Chinois on Main in 1983, mixing cultures. Many say it was the first fusion restaurant in the United States.

The whole culture of food has changed in America in the past 30 years. Sun-dried tomatoes, radicchio, and arugula were novelty items. We changed the way restaurants are seen. A restaurant can be casual and have great food. It doesn’t have to be stuffy.

I started to do TV appearances in the 1980s, going on David Letterman and The Tonight Show. I went into the frozen-pizza business because Johnny Carson would take home 10 to 12 pizzas at a time. I asked him, “What do you do with all those pizzas?” He said he froze them, so I started doing that.

In 1992 [developer] Sheldon Gordon persuaded me to go to Las Vegas, so we opened Spago at the Forum Shops at Caesars, the first chef-owned restaurant in Las Vegas. Unfortunately we opened in December 1992, and everything was dead. I thought I’d made a big mistake. But then, in January, it started to get busy, and convention business made it amazingly successful. It grossed $1 million that January, and we were profitable then.

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I’ve always had partners for each of the restaurants. But 10 years ago we started doing management contracts, usually with hotels, where we don’t have to invest money anymore. We have three clear divisions now, and I have partners in each area: catering, licensing and cafés, and fine dining. I want everyone who works with me to have skin in the game, so the business is partly owned by the partners. If the business doesn’t make money, they don’t make money. I oversee each division and give the orders, and they execute.

I patterned my business model on how Giorgio Armani did things. He has haute couture, which is like fine dining in food, and a line below that, like our cafés in airports and Disneyland. He does licensing, and we do the same thing with our canned soups. I said if he can do it in clothing, I can do it in food.

In the early 2000s the Food Network came to me. I did 100 shows or so with them for three years. It took a lot of time. Shooting in Europe took four weeks, and being in the studio meant three weeks. After a while, shows end, so I chose to concentrate on the restaurant business.

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In 2008, I decided to expand internationally so that if there’s an economic crisis here, it won’t affect us as much. Now we have restaurants in London and Singapore, and will open a restaurant in Dubai at the end of the year. We also have plans to open more restaurants in the Arab Emirates and in other parts of Asia.

I’m proudest of our longevity. I’ve had Spago for 31 years, and I still do the Oscar parties. Outside the restaurant business, we sell appliances and products like canned soups and pesto sauces. But I like fine dining the most. I still enjoy being in the kitchen. I hate being called a celebrity chef. “Chef” alone is enough.

My advice

Talk to your customers. I feel that when people come to my restaurant, they’re coming to my house. You want to be gracious to them. At home you have to feed them for free. Here they have to pay.

Stick to what you know best. I owned 10% of Eureka Brewery & Restaurant, which opened in 1990. We had so many problems bottling the beer. I had to leave. The restaurant was successful, but the brewery lost a lot, and Eureka went into bankruptcy.

Hire young people. Young people bring more ideas. There has to be evolution constantly. If we stand still and don’t pay attention to what’s happening today and tomorrow, we’ll be in a graveyard.

This story is from the December 09, 2013 issue of Fortune.