Panda Express Franchise Cost & Opportunities Sample

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Panda Express is everywhere. The lightning-aggressive chain of American Chinese cuisine has establishments in casinos, shopping promenades, supermarkets, airports, train stations, theme parks, bowls, college campuses, and even the Pentagon.

It has rapidly become the largest chain of Chinese fast-food restaurants in the country, with 1,321 locations in 38 states and Puerto Rico. In 2004, the company began opening standalone restaurants with drive-through windows, too, featuring delicious dishes like Orange Chicken, Beijing Beef, Kung Pao Chicken, and a rule of no added MSG.

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Panda Express is a brand that sells easily. Industry: Fast Food Franchises. Panda Express Info, Panda Express Stats, Panda Express Franchise Opportunities – Information. Business people interested in owning and running a fast-paced, friendly restaurant with consistently delectable Chinese food would do well to consider a Panda Express franchise.

Panda Restaurant Group also owns Panda Inn restaurants and Hibachi-San.

Panda Express Franchise Opportunities – History

The Panda Restaurant Group, which owns Panda Express, was founded by Andrew and Peggy Cherng and Andrew’s father, Master Chef Ming Tsai Cherng, who opened their first Panda Inn restaurant in 1973 in Pasadena, California.

When they were invited to open a fast-food version of Panda Inn for the Glendale Galleria, Panda Express was born and has steadily spread across the United States since, and even opened two restaurants in Japan, which have since closed. Among its three restaurants, the Panda Restaurant Group, for which Andrew Cherng still serves as co-CEO, brings in annual revenues of more than $1 billion and has more than 13,000 employees company-wide.

Panda Express Franchise Cost / Initial Investment / Panda Express Franchise Income

An investment of $125,000 is required to open a Panda Express franchise. Training and support are available through the parent company, the Panda Restaurant Group.

Panda Express Business Opportunities: Other Information

Andrew and Peggy Cherng are well known for their philanthropic gifts in and around the Los Angeles area. In 2008, the couple received the City of Angels Award. The Panda Express chain was featured on ABC News Nightline in 2011, discussing Andrew Cherng’s approach to life and encouragement of his employees to participate in motivational programs.

Corporate Overview

The privately-held Panda Restaurant Group, Inc. (PRG) is the largest and fastest-growing Asian restaurant company in the country. Today, under the leadership of Founder and Chairman Andrew Cherng and his wife, Co-Chair Peggy Cherng, PhD, PRG operates three concepts – Panda Inn, Panda Express, and Hibachi-San – numbering over 1,500 units, with close to 20,000 associates in 42 states and Puerto Rico. Same-store sales, the industry’s benchmark measurement of growth, have increased consecutively for 13 years from 1996 to 2008, with gross sales exceeding $1.5 billion in 2011.

Andrew and his father, Master Chef Ming-Tsai Cherng, established the first Panda Inn restaurant in 1973 in Pasadena, CA to serve gourmet Mandarin and Szechwan cuisine in an upscale, casual-dining ambiance. They quickly won a loyal following with such original dishes as Tea Smoked Duck, Honey Walnut Shrimp, and Lotus Leaf Rice.

That provided the springboard and inspiration for the launch of Panda Express in 1983, fulfilling Andrew’s vision of a unique restaurant that combined the gourmet cuisine of Panda Inn with a fast-casual format. The first Panda Express opened in the Glendale Galleria in Glendale, CA.

Panda Express is the growth engine of PRG, designed for people who welcome the exciting tastes of Chinese food. Each Panda Express is designed with its full-service roots in mind, from granite table tops to vibrant colors and cultural decor. Panda Express restaurants reflect the company’s strong passion for bringing quality Chinese food to neighborhoods across the United States.

At the core of Panda Express’ values is its commitment to guest satisfaction. Panda Express and its associates promise to delight guests with signature dishes such as Orange Chicken and Honey Walnut Shrimp, to educate guests through cultural celebrations such as Chinese New Year, and to care for its guests through gracious hospitality and community engagement.

Leveraging its operations expertise and wealth of knowledge about Asian cuisine, PRG introduced Hibachi-San in 1992, a mall-based quick-service restaurant featuring a variety of Japanese grill and bowl main courses.

Panda’s mission is to deliver exceptional Asian dining experiences by building an organization where people are inspired to improve their lives. The company has put people at the forefront of its success, investing in countless tools for professional advancement as well as personal growth. The company’s significant expansion plans mean unique opportunities for those with a passion for Panda.

While versatile in non-traditional locales such as malls, airports, and amusement parks, the majority of Panda’s portfolio consists of street locations. Panda continues to aggressively accelerate its development, focusing on end-caps, freestanding buildings, and drive-thru concepts. In 1997.

Panda opened its first drive-thru restaurant in Hesperia, California, paving the way for over 400 drive-thru units today.

PRG is deeply committed to the communities it serves, with contributions to countless non-profit organizations. Panda Cares is the company’s community engagement enterprise, supplying food, support, and voluntary services to organizations benefiting children and disaster relief efforts.

PRG’s company values are being proactive, respectful/win-win, growing, great operations, and giving.

Panda is committed to delivering on this commitment to each guest, associate, and partner. Company Perspectives: Every year, Panda makes it a mission to focus on one very important aspect of our formula for success.

Whether the spotlight is on food excellence, outstanding service, or enhanced teamwork, each Panda employee becomes dedicated in a particular way to making that focus a priority during the year. We at Panda truly believe that the quality of service that we provide to our customers each and every day forms the links that hold our business together.

We are dedicated to doing everything in our power to deliver no less than exceptional customer service to every customer every day.

Company History:

Panda Management Company, Inc. (PMC), based in Southern California, has grown dynamically ever since 1983 when it opened its first Panda Express, its most successful operation. As that name suggests, Panda Express units are fast-service Chinese restaurants, now found in over 34 states, the District of Columbia, Puerto Rico, and Japan.

Altogether, PMC manages over 300 Panda Express Restaurants, six Panda Inn Restaurants, eight Hibachi-San Restaurants, and seven Panda Panda locations. Panda Inns, the first of which opened in 1973, are all located in Southern California, as are the Panda Pandas, upscale, gourmet Chinese food restaurants.

The Hibachi-San Restaurants, featuring Japanese cuisine, are located in shopping mall food courts, about half of which are at choice sites outside California.

The much more omnipresent Panda Express Restaurants are located in five basic operating environments: mall food courts, supermarkets and retail chains, shopping centers and central intersections, university and college campuses, and airports, casinos, and sports arenas.

Their key market focus is the customer in the 18 to 34 age bracket, the upwardly mobile segment of the working population most likely to adapt to a nouveau fast-food cuisine. In contrast to the Panda Express units, Panda Inn, Panda Panda, and Hibachi-San restaurants are full-service restaurants. In association with EATertainment International, the company has also ventured into speedy service Cajun food with Orleans Express.

However, it is the enormous success of the Panda Express chain that fuels PMC’s accelerating expansion. Its aggressive plans called for the opening of 70 to 80 new units in 2000 alone, including an increasing number of street-level, stand-alone, drive-in units, making them more competitive in a market dominated by hamburger, fried chicken, and Mexican food chains. None of the restaurants operated by Panda Management is franchised; all are owned by founders Andrew Cherng and his wife, Peggy.

1973-82: Initiation and Development of Panda’s Full-Service Restaurants Andrew J. C. Cherng and his father, master Chinese chef Ming-Tsai Cherng, founded what would evolve into Panda Management when, in 1973, they opened the first of seven Panda Inns, full-service restaurants located in Southern California.

The initial site was in Pasadena, a suburb of Los Angeles, one of America’s great cultural melting pots. The Cherngs had migrated to the United States from Japan in the 1960s after first getting there from their native China by way of Hong Kong and Taipei, and their establishment was one of the first in the country to modify authentic Mandarin and Szechwan dishes to complement the area’s Oriental cuisine.

Initially, the Cherngs were determined to expand in the full-service Chinese restaurant market, a tough business in California, thanks to its large Asian-American population. Although the new company was able to open additional full-service restaurants, the younger Cherng soon saw that fast food, drive-thru restaurants were a national fad in the United States. He also realized that Southern California offered an excellent market for experimenting with an Oriental food version of that sort of operation. Consequently, he set out to expand into the fast-food restaurant field.

1983-91: Company Steadily Expands with Its Panda Express Chain In 1983, Cherng launched Panda Express, opening the first unit in a mall in Glendale, California. It proved to be a very successful start for what would become PMC’s main chain. Because the Panda Express was one of the few quick-service restaurants to evolve from a full-service concept and because it introduced a new food to that market, it found a good market niche, close to a wide-open field, in fact. It joined authentic Mandarin cuisine to a sector historically dominated by burgers and fried chicken.

Panda Express propelled the company into a growing rhythm that had not abated by the twelfth month of 2000. Depending on the location, the Panda Express establishments varied in size, ensuring some flexibility. Like the first, the early units were usually located in shopping promenades, but eventually, they spread into other spots where possible customers could be found: into strip centers, airports, and universities, for example.

Beginning in 1988, they were also placed in grocery stores when the Cherngs placed a Panda Express in a Vons supermarket. The dishes featured at the various Panda restaurants originated in three parts of China: Canton, Beijing, and Szechwan. Although less comprehensive, the dishes at the Panda Expresses were the same as those served at the original Panda Inns and were prepared on-site at each unit, even the smallest ones.

Because few concessions were made to expediency, the food quality remained high and quickly won the new chain a loyal customer base. Their success led to the company’s concentration on expanding its new chain, first in its home base of Southern California, then eastward, to the Western states of Nevada, Arizona, Colorado, and Utah, and eventually to the East Coast, where it would face stiffer competition from a rival chain, Toronto-based Manchu Wok, which was already well-established east of the Mississippi River.

1992-2000: Accelerated Expansion and New Directions

By the end of 1992, the Panda Express chain numbered just over 50 units. Market indicators were very strong, encouraging rapid expansion.

Notably, the National Restaurant Association issued a report indicating that between 1987 and 1990, there was a 31.5 percent increase in the Asian segment of the fast-food business. Overall, Asian restaurant sales in the United States rose from $7.5 billion in 1990 to $8.3 billion by August of 1995. Panda Management responded to the market rush with very rapid growth.

By April of 1994, it was operating 125 units in 21 states, Washington, D.C., and Japan. Sixty of these were financed by money generated internally from sales that in 1993 had reached $100 million and $112 million by May of the following year.

By that time, Panda Express was neck and neck with Manchu Wok, which, with far more units, was only keeping even in sales. By 1993, it had even fallen far behind Panda Express in the number of its new openings, though it was still the dominant express Chinese food chain in the eastern part of the United States. One thing contributing to the rapid increase in the number of Panda Express units was the chain’s versatility.

It’s five different footprints running from 400 to 2,000 square feet, allowing it to develop unit sites in a broad assortment of locations and to adjust size to sales that ranged from $350,000 to more than $1.5 million per unit in 1994. In 1994, to help its expansion and diversification plans go smoothly, Panda revamped its upper management team.

In January of that year, it recruited and hired Joseph Micatrotto as president and chief operating officer. Although Andrew Cherng remained president and CEO, he gave Micatrotto considerable latitude in mapping out new directions for the company. Micatrotto, who grew up in a “Little Italy neighborhood” of Cleveland, came to Panda from a 14-year career at Chi-Chi’s, a Louisville, Kentucky-based chain of Mexican restaurants.

The company also hired Russell Bendel as senior vice-president of operations. He joined Panda after vacating his position as COO at El Torito, another chain of Mexican restaurants based in Irvine, California. Although neither Micatrotto nor Bendel had knowledge of Oriental cuisine, they had the managerial, organizational, and leadership skills that Panda Management Corporation (PMC) needed.

At the time Micatrotto took the reins as president, PMC already had an enviable history of minority employment. About 45 percent of the workers were Hispanic and 40 percent were Asian. As part of his plan, Micatrotto scheduled “cultural diversity” lunches, sensitivity training experiences through which workers developed their awareness of their diverse cultures. Considering that the vast majority of Panda Express customers were not Asian in their heritage, that plan had a solid basis.

Although Micatrotto resigned the presidency of Panda Management in 1996, releasing it to Peggy Cherng, one of the things that he had recommended was an increase in the number of street-level, freestanding shops offering dine-in, drive-through, and carry-out services.

By the end of 1998, these accounted for just about 80 Panda Express units, most of which were located in malls and other less traditional places. By adding more standalone units, the company sought to offer stiffer competition to such fast-food giants as McDonald’s and Taco Bell, as well as traditional Chinese restaurants.

In the 1990s, Panda Management also took steps to increase the percentage of takeout orders. In 1995, its 173 Panda Express units were averaging just a 30 percent volume in takeout sales, considered rather low for limited service Chinese food restaurants. In addition to a “Flavors of China” campaign, emphasizing Panda’s authentic regional foods, it promoted a home meal replacement family dinner featuring two main courses, rice or chow mein, and appetizers for $12.99.

Besides, to better its efficiency, in 1973, the company was established by Andrew and Ming-Tsai Cherng with the opening of the first Panda Inn. In 1983, the first Panda Express was opened.

In 1988, PMC put its first mercantile establishment in Vons supermarket. In 1994, the company hired Joseph Micatrotto as president and head operating officer. In 1995, Micatrotto became CEO. In 1996, Micatrotto resigned, and Peggy Cherng assumed the presidency. In 1999, the company opened its 300th Panda Express.

By the mid-1990s, Panda Management had begun committing more of its gross to its advertising budget, which until then had been very little. Although it continued to use direct mailings, as it did in its 1995 “Flavors of China” campaign, it began running ads in print and on radio, with the latter as its main media strategy.

It also started conducting focus group sessions, using questionnaires and ratings of the quality of its food. However, it was not until 1999 that it produced its first block of television ads. These were initially limited to the Las Vegas area, where, in a relatively new market for the company, it had 19 Panda Express units.

At that time, Peggy Cherng said that the campaign was a trial of the medium’s ability to bolster sales and “the commercials’ ability to deliver the brand message.” Authenticity in Chinese cuisine has not been easy for PMC to maintain, especially since some concessions had to be made to American tastes and preference for quick service. Simply put, the fast-food format required a kind of balancing act between quality and speed.

Among other things, reflecting health-conscious trends in the United States, Panda Express restaurants used no MSG in any of their foods. Basically, in order to preserve the authenticity of their dishes, they also kept recipe changes to a minimum, using only minor adjustments to suit the American palate.

For example, they cut back on the spice levels in their array of Szechuan dishes, making them much milder than they would be in Asia. Most importantly, even as the chain entered its period of explosive growth in the 1990s, its restaurants continued to prepare their foods from scratch, maintaining what Micatrotto called “a quick-service environment with a full-service kitchen.”

In 1998, Panda Management celebrated its 25th anniversary by redesigning and reopening its flagship Pasadena Panda Inn, the first of its restaurants. The redevelopment was symbolic, reflecting the company’s desire to preserve tradition even as it ventured into new culinary and geographic areas.

Although the restaurant was one of the first to serve foods from diverse Chinese states, its kitchen also produced several original dishes, including Tea Smoked Duck, Creamy Mustard Shrimp, Lotus Leaf, and Sizzling Crispy Garlic Chicken.

Throughout its history, Panda Management has worked diligently to play a significant, good neighbor role in its host communities. Under the title ‘Panda Cares,’ it has been involved in many initiatives aimed at improving the quality of life for children in those communities.

In addition to monetary donations, the company has encouraged its employees to volunteer their time and labor, allowing them to initiate their own Panda Cares events that include meals donated by Panda Express. The program has enhanced Panda’s image, created goodwill, and boosted employee morale. An example of PMC’s commitment occurred in February 1999, when it opened its 300th restaurant in Las Vegas with a gala celebration. PMC donated 20 percent of its opening day profit to the Candlelighters for Childhood Cancer of Southern Nevada.

Prospects for continued growth for PMC’s Panda Express chain remained very good at the century’s end. The chain was firmly established, had an excellent reputation, and enjoyed growing brand awareness. It also had hardly begun to saturate its markets outside Southern California.

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