In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Panda Express franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Panda Express franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Panda Express’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average, high, and low net sales, restaurant contribution, and cash flow for affiliate-owned Panda Express restaurants located in airports, casinos, military bases, stadiums, theme parks, and universities, separately stated
- 2015 average, high, and low sales for licensee-owned Panda Express restaurants in captive venue locations (airports, casinos, military bases, stadiums, theme parks, and universities)
Section I – Background Information
Panda Express Moves Beyond the Food Court
Panda Express is striving to be competitive in a wider variety of location types and go bigger than the shopping-mall footprint it has used for decades.
The fast-casual Chinese restaurant chain has traditionally appeared in food courts in shopping malls, but the chain now has stand-alone restaurants as well as locations at universities, airports and other high-traffic spots. The expanded reach pits Panda Express against established stand-alone restaurant chains like Chipotle, part of Panda Express’s strategy to ditch its reputation as a food-court stalwart.
The company’s strategy also includes the Panda Express Innovation Kitchen in Pasadena, the only location where customers can order certain experimental dishes. For example, the Orange Chicken Wrap is a burrito that combines fried chicken and crisp wontons into a scallion pancake. Here, you can also find green papaya slaw and pickled cucumbers, top a salad with citrus ginger vinaigrette, and check out the tea bar for tea, smoothies and shakes featuring boba bubbles, fruit jelly and chia seeds.
New Agency Will Focus on Brand Values
In March 2016, Panda Express hired Havas Formula as its agency for public relations and social media marketing, seeking a focus based more on the values of the brand, such as gratitude and generosity, than on the food it serves. Havas was one of seven agencies competing for the company’s business.
Big Operation in U.S.
Panda Express is the largest family-owned Chinese restaurant chain in the United States. The chain has more than 1,800 stores around the world, employs more than 27,000 people and posts more than $2 billion in sales.
The chefs at Panda Express receive rigorous training in traditional Chinese wok cooking, using extreme temperatures and meticulous control to strive for just the right doneness.
Orange Chicken Debuted Four Years After Inception
Andrew and Peggy Cherng, along with Andrew’s father, master chef Ming Tsai Cherng, started Panda Express in 1983 with a restaurant in Glendale, California. The chain’s signature dish, orange chicken, was developed in 1987 by chef Andy Kao, who is currently executive chef of product innovation.
The chain opened its 100th location in 1993 on the UCLA campus and its 1,000th in Pasadena, California, in 2011. Panda Express opened its first international restaurant in 2011.
200-Calorie Shrimp Dish on Limited Menu
Panda Express introduced Pacific Chili Shrimp in March 2016 for a limited run. The dish features large shrimp and fresh seasonal vegetables and comes in at just 200 calories while providing 11 grams of protein.
Panda Express Part of Panda Restaurant Group
Headquartered in Rosemead, California, Panda Express is a more casual variation of its predecessor, Panda Inn, which is a chain of upscale restaurants.
Parent company Panda Restaurant Group operates Panda Express; Panda Inn, inspired by Mandarin and Sichuan cuisine; and Hibachi-San, which features authentic Japanese teppanyaki grill cooking and serves sushi. The company has also invested in Pieology, YakiYan, Uncle Tetsu and Ippudo.
Section II – Estimated Costs
- Please click here for detailed estimates of Panda Express franchise costs, based on Item 7 of the company’s 2016 FDD (updated).