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Franchise Costs: Detailed Estimates of Panda Express Franchise Costs (2021 FDD)

Last updated on October 11, 2021 by Franchise Chatter 19 Comments
in Asian Restaurant Franchise, Franchise Costs, Quick Service Franchise

Panda Express Photo by ltcarter



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Updated October 11, 2021.

Detailed Estimates of Panda Express Franchise Costs Based on Item 7 (Estimated Initial Investment) of Panda Express’s 2021 Franchise Disclosure Document

  • The initial investment table shows certain expenditures required to open a single Panda Express Restaurant. Note that these amounts vary widely.
  • The figures provided apply to all types of Panda Express Restaurants and venues. Costs depend on whether or not a building is new construction or an existing restaurant, as well as the condition of the property, the geographical location, and how big it is.
  • Amounts paid to Panda Express are non-refundable unless otherwise noted. Amounts paid to suppliers/vendors are refunded according to arrangements you make with the vendor, if any.
  • These figures are estimates of the range of some of your initial costs in developing a single Restaurant and in the first three months operating that location. Your actual initial costs may be more or less.
  • If you acquire an operating Panda Express Restaurant from Panda Express, Inc. (PEI), the price you pay for its assets and other terms of acquisition will be negotiated between you and PEI and is not reflected in the chart below. PEI sold 3 Panda Express Restaurants to licensees in the past 8 years and the purchase prices ranged from $136,963 to $1,261,913.

1.  Initial License Fee:  $25,000

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  • This fee is non-refundable.

2.  Lease of Premises (Initial 3 Months’ Rent):  $10,000 to $425,000

  • The rent estimates contemplate three months’ rent, and the range is based on various Panda Express Restaurant venues throughout the country.
  • Rent expense varies, and the low-high range given is based on location, square footage, age and condition of the structure, lease arrangements, and other factors and could differ materially from area to area. In particular, rent in airports may be significantly higher than in other venues, and this accounts for the high end given in the chart.
  • The typical Panda Express Restaurant in a captive venue will be approximately 500 to 1,500 square feet, although a few Panda Express Restaurants occupy approximately 3,000 square feet.
  • Other charges may include Common Area Maintenance charges (“CAM”), utilities, taxes, and insurance, as imposed by the facility. Leases frequently specify minimum rent and percentage rent (typically 10%) applicable above a threshold sales volume.
  • In a food court, CAM typically amounts to 35% to 50% of minimum rent. A pro-rated charge for taxes, insurance, and utilities also applies.

3.  Leasehold Improvements:  $80,000 to $700,000

  • You must follow Panda Express’s design standards and construction process and have its approval to open. The cost of construction and leasehold improvements depends upon the size, condition, and location of your Restaurant and the local cost of labor.
  • The range of figures stated for a Panda Express Restaurant is the cost of reasonable renovation or leasehold improvements and may be less if the lessor provides a construction allowance to lessee.
  • Included in the estimate are construction charge backs for landlord provided work.
  • Fixtures include counters, tables, chairs, wall coverings, decorations, and other fixtures. The cost of fixtures will vary depending on the seating capacity of your Restaurant, lease or finance terms available to you, the layout of your Restaurant, and other relevant factors.
  • The high estimate contemplates leasehold improvements for approximately 2,500 square feet and includes an elaborate exhaust system, as is sometimes required by the lessor.

4.  Furniture, Fixtures, Equipment, and Supplies:  $90,000 to $310,000

  • The equipment necessary for the operation of a Panda Express Restaurant includes grills, refrigerators, induction table, and other equipment. You will purchase or lease approved brands and models from approved, third party suppliers and, in limited circumstances, from Panda Express.
  • The cost of the equipment, and the low-high range given, depends on financing terms available, the size of the Restaurant, brands purchased, and other factors.

5.  Initial Inventory:  $2,200 to $10,000

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  • Your initial inventory will be purchased by you from designated or approved third party product suppliers and, in limited circumstances, from Panda Express. Initial inventory includes various food products, certain proprietary spice mixes, seasonings, flavorings, menu items, sauces and marinades, beverages, paper products, cleaning supplies, and miscellaneous items used in the operation of your Restaurant.
  • The initial inventory expenditure will vary, and the low-high range given was factored according to varying anticipated sales volume and current market prices for supplies.

6.  Computer Hardware and Software:  $14,000 to $21,000

  • The cost of the computer equipment and software, including point of sale systems, needed to operate a Panda Express Restaurant varies, and the low-high range given is based on the manufacturer, the operating features, whether the equipment is already owned by you, whether the equipment is new or used, and whether you purchase or lease the equipment.
  • Panda Express estimates that it will cost $2,000 to $4,000 to purchase the computer software and $14,000 to $21,000 to purchase the computer hardware.

7.  Non-resettable Cash Register(s):  $6,000 to $8,000

8.  Insurance (Annual Premium):  $30,000 to $75,000

  • You must maintain in force at all times policies of insurance covering various risks and issued by carriers Panda Express approves. Policies must name Panda Express and its affiliates as additional insured for Liability policies and meet other coverage criteria as specified by it in the Manual or otherwise. Panda Express specifies the types and amounts of coverage required under these policies and can require commercially reasonable adjustments from time to time.
  • Each such policy shall be underwritten by insurers rated “A” or better, with minimum financial rating of VII, by A.M. Best Company.

9.  Expenses Incurred During Initial Training:  $13,000 to $29,000

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  • The Initial License Fee covers an initial training program per Restaurant. All costs related to training for you and any of your personnel attending the initial training program, including any travel, living, incidental, and other expenses, are your sole responsibility. The amount expended will depend, in part, on the distance you must travel and whether lodging is required.
  • Panda Express can also charge a fee for training of additional and/or subsequent personnel.

10.  Architectural and Design Fees:  $17,000 to $50,000

11.  Construction Supervision:  $17,000 to $70,000

12.  Sales Tax Deposits:  $4,500 to $10,000

13.  Telephone, Fax, and Other Communication Related Fees:  $500 to $1,000

14.  Licenses and Permits:  $1,500 to $30,000

  • You are solely responsible for identifying and complying with all applicable laws, regulations, and ordinances.

15.  Miscellaneous Funds:  $0 to $10,000

  • This category includes security deposits, utility costs, and other miscellaneous expenses to begin operations and other financial requirements.
  • You could need more Miscellaneous Funds, because they vary with the size of the business (staff, anticipated volume of business, etc.) you operate.

16.  Additional Funds (3 Months):  $60,000 to $110,000

  • You will need capital to support ongoing costs of your business, such as additional inventory, supplies, payroll and management expenses/benefits, utilities, recruitment and training costs, uniforms, donations, and discounts.
  • You also need to hire some outside services, such as companies offering security, safety, maintenance, quality control/evaluation, surveys, marketing, laundry, and professional services.
  • This is only an estimate. You may need additional funds during the three months of initial operation, and you will have ongoing expenses and revenue needs after the first three months.

17.  Total:  $377,100 to $1,884,000

  • Panda Express has implemented a pilot program on a limited basis under which a licensee’s Restaurant may be free standing, developed with a drive-thru feature, and have a larger footprint (estimated to be approximately 2,300 square feet) than a typical licensed captive venue location.
  • Panda Express estimates that the total initial investment expenses noted above for such a drive-thru location will increase by up to $1,150,000, due in part to greater construction and site development costs; as well as increased furniture, fixtures, signage, and equipment costs.
  • In preparing the figures in this Item, Panda Express relied on its affiliates’ over 26 years of experience in the restaurant business.


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Reader Interactions

Comments

  1. PHILIP BADEWA says

    February 15, 2016 at 1:53 pm

    I have a readily available 4,000 sq.ft. space, remodeled already inside and out with paved parking space for and ice cream shop and restaurant in Bessemer, AL. 35020.
    This building has high visibility in a neighborhood that desperately needs good quality food that is different from other fast-foods like McDonald, Burger King etc.
    I would appreciate a response from Panda Express and for a representative to come for an assessment.

    A. PHILIP BADEWA

    Reply
  2. Moueed says

    April 3, 2016 at 5:34 pm

    I’m looking to apply for a Panda Express franchise in the DFW area. Thank you

    Reply
  3. Susan Kanonczyk says

    April 8, 2016 at 10:50 am

    Hello,
    We offer a building for a Panda Express franchise owner in a highly visible area nestled among 10,000 professional employees. We will begin exterior renovations this summer but are seeking a franchise tenant. Please view kanonczykproperties.com for additional information or call Susan at 814 823 2498.
    Thank you for your interest.

    Reply
  4. Mei mei says

    December 24, 2016 at 9:07 pm

    I have Chinese restaurant in downtown Pittsburg pa very good location i would like respon from Panda Express

    Reply
  5. Andre says

    January 30, 2017 at 7:29 am

    I am running Persian restaurant in U.K.
    LondonI would like to know If I can have panda
    Express franchisee
    And If yes How it works?
    Ealing-London-Uk

    Reply
  6. Florence says

    February 23, 2017 at 7:43 am

    I Would like to own a franchise in Ghana, West Africa would like to know the terms and details. I live here in the US.

    Reply
  7. Victor says

    March 23, 2017 at 7:44 am

    I would like to know how much a franchise of panda express will cost in mexico?.Altozano-Morelia to be precise.

    Reply
  8. YUAN YUAN YOU says

    May 6, 2017 at 6:26 am

    Hi, Good morning. I am a Chinese Girl, I live in Spain, I want to ask the cost of Franchise, Panda Express, I want to open a store in Madrid, I am very interested, I hope you can send more information and details about it.
    Thank you very much.

    Reply
  9. Sathyan M says

    May 30, 2017 at 1:21 am

    Hi,

    I’m from India.
    I’m planning to take franchise of Panda Express in chennai,Tamilnadu, India. I am interested in opening it soon so kindly send me the details soon.

    Thanks in advance

    Reply
  10. Fernando Z says

    June 4, 2017 at 11:19 pm

    Hello I’m an Honduran business owner which was very interested in opening a Panda Express restaurant in Tegucigalpa, Honduras and hoping to receive the details to be able to open a store as soon as posible.

    Thanks in advance

    Reply
    • Tony says

      January 1, 2020 at 2:49 am

      They do not offer franchises.
      It says so right on their website

      Reply
      • Franchise Chatter says

        January 1, 2020 at 6:53 am

        They actually do offer limited franchise opportunities in “captive” venues, such as airports, campuses, hospitals, universities, and similar facilities. I have a copy of their latest Franchise Disclosure Document, which I can send as a PDF to paid subscribers via email.

        Reply
  11. Jorge Real says

    January 3, 2018 at 11:23 pm

    I want to open a panda express please help me out,it would be a dream come true. For a poor. Person with a dream.

    Reply
  12. David X says

    October 27, 2018 at 1:40 pm

    Hello, I want to inquire more information regarding opening a franchises in Panama, Panama City. We have more than 10 year of experience with Restaurants in Panama.

    Reply
  13. DON W CURTIS says

    October 30, 2018 at 12:26 pm

    Interested in learning more about opening a PE restaurant in Wyoming. My wife and I are current business owners and love PE.
    I think it would be very lucrative in our town.

    Reply
  14. shamsheer says

    June 9, 2019 at 11:32 pm

    Interested in starting PE in India.

    Reply
  15. Nikki Nguyen says

    July 18, 2019 at 4:41 pm

    Hi there I live in Indiana, I would like to know more information about open a franchise Panda here in Fishers, Indiana please , Thank you

    Reply
  16. Fei Ling says

    December 30, 2020 at 3:09 pm

    Hi, im in fairbanks Alaska, I would like to know more information about open a franchise Panda here. thank you.

    FEI

    Reply
  17. Victor says

    June 23, 2021 at 4:36 pm

    I am from US but i would like to open Panda Express in Armenia or Russia i would like more information

    Reply

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