Panda Express Franchise In USA Cost, Profit, Wiki, How to Apply | SkillsAndTechSkillsandTech | February 4, 2022 |
For more than 30 years, Panda Express has been recognized as one of the big names in fast-casual. The company has more than 2,200 locations globally. In 2019, Statista reported Panda Express as the number 3 leading fast-casual restaurant.
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How much does it cost to open a Panda Express?
Unfortunately, this chain is not open for franchising at the time of writing. In fact, the majority of Panda Express locations in the United States are company-owned. This means employees manage the day-to-day operations of a location, instead of a franchisee
In the event Panda Express opens its restaurant chains to franchisees in the future, how much should you expect it to cost? To own a Panda Express, your liquid assets would are estimated between $100,000 to $250,000. Total investment is estimated between $377,100 to $1,884,000 while Panda Express’s franchise is expected to be $25,000. Of course these are estimates based on similar franchise concepts.
If you’re curious about Panda Express, their operations, and how much they make in a year, below are more details regarding this popular restaurant chain. I even include what I view as advantages and challenges of the concept. Let’s get into it.
Financial Requirements and Fees
Panda Express is a privately-owned company. They do not allow franchising of their restaurant and they haven’t revealed any of their franchising fees and requirements.
|Fees / Expenses||Financial Amount|
|Liquid Capital||$60,000 to $110,000|
|Total Investment||$377,100 to $1,884,000|
Panda Express may not be open for franchising but they do allow their employees to run their restaurants. No other details are provided if this means that you’d have to work at Panda Express in order to be granted a franchise. If this changes, we’ll be the first to let you know.
Average Sales / Revenue per Year
According to Forbes, Panda Express recorded $3.5 billion in revenue in 2020. They’ve had billion-dollar revenues in the previous years as well. The chain has enjoyed double-digit percentage revenue growth in similar growth as well. While revenues dipped during the beginning of the pandemic and lockdowns, the concept finished the year strong.
Panda Express Franchise Facts
|Incorporated Name||Panda Express|
|Franchising Since||Does Not Allow Franchising|
|Subsector||Food and Beverage|
Panda Express’s roots started in the 1970s when Andrew Cherng along with his father opened the Panda Inn in Pasadena, Calif. Panda Inn was an upscale restaurant where Mandarin and Sichuan dishes were served. In 1983, together with Peggy Cherng, they opened Panda Express which was positioned as a fast-food version of Panda Inn. The first Panda Express was located in Glendale Galleria in Glendale, Calif.
Peggy Cherng has a Ph.D. in Electrical Engineering and an M.S. in Computer Sciences was the person behind Panda Express’s efficient operating system. Cherng implemented tracking inventories as well as a computerized system for reordering ingredients which made the business process faster and easier, something that other Chinese-American restaurants weren’t practicing during those times yet.
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Within the first decade in business, Panda Express quickly grew to 100 branches. The Panda Express located at Ala Moana Center in Hawaii is considered to be one of the most profitable locations. This location alone rakes in a reported $4 million a year. Panda Express also started testing drive-thrus back in 1997.
In the beginning, the restaurant chains were mostly found in food courts in malls. Panda Express has always had a strategy of opening in locations where there is a captive audience. As a result, the company has targeted opening on university campuses, airports, amusement parks, and even casinos.
The company’s first location outside the United States was in Mexico City in 2011. Other places where Panda Express can be found include Dubai, Canada, Philippines, Japan, Puerto Rico, Guam, and South Korea.
In 2007, Panda Express’ revenues hit $1 billion for the first time ever. It was also around this time that they’ve opened their 1,000th branch in Pasadena, California.
Panda Express’s most popular item is orange chicken. These are chicken bites with a sweet and spicy orange sauce. According to their website, they’ve sold over 80 million pounds of orange chicken since 2016. In 2017, they’ve also bought 22 million pounds of broccoli. Other popular dishes on the menu are Beijing Beef and Honey Walnut Shrimp. The restaurant also gives away fortune cookies with uplifting notes on inscribed on them. Panda Express hands out a staggering 282 million fortune cookies annually.
The Asian restaurant chain won the 2021 Excellence in Food Safety Award for their efforts in ensuring food safety. In spite of massive growth, Panda Express is still considered a family business with couple Andrew and Peggy Cherng at the helm. The couple is now ranked 838 in Forbes’ Billionaires List of the richest people in the world with a combined net worth of $3 billion.
They couple has three children and two of them work for Panda Restaurant Group Inc., the parent company that owns Panda Express, Panda Inn, and Hibachi-san. Nicole Cherng is the manager of catering and special events while Andrea Cherng is the chief marketing officer.
The company is known to be very charitable. Panda Cares is the organization under Panda Restaurant Group Inc. involved in all sorts of philanthropic missions. The organization was formed in 1999 with the mission of providing funding, food, and volunteer services for disaster relief efforts and underserved children. The group has raised over $50 million for charity. The headquarters for Panda Restaurant Group Inc. is located in Rosemead, California.
How Much Does Panda Express Make in Profit?
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Panda Express has not made their profit data known, but the restaurant chain’s net income was around $8,000,000 in the year 2020. While we don’t know exactly how profitable a Panda Express, generally speaking Chinese food is a profitable menu item. Most Chinese restaurants can markup their dishes 3 – 4 times food cost. Of course, this doesn’t take into account the cost of labor, rent, or taxes so keep that in mind.
Considering Panda Express’ commitment to running a tight ship, I bet they’ve found a way to reduce their food costs even further beyond mom-and-pop Chinese restaurants that can markup food by 3x – 4x. At this point, Panda Express enjoys economy of scale and can negotiate with vendors to reduce the cost of ingredients.
Advantages of a Panda Express Franchise
Based on the multi-decade growth there would clearly be many advantages to franchising a Panda Express. Here are some of the biggest advantages of this restaurant.
The Orange Chicken Experience
Panda Express is synonymous with orange chicken and the company sells 285,000 plates each year. The store’s most popular item on the menu is the one sought after by many for its crispy skin but also juicy bite smothered in orange sauce. As mentioned above, they sell literally millions of pounds of the stuff every year.
Even though independent Asian restaurants serve the same items on their menu, people continue to choose Panda Express due in part to dish consistency. The meal is also served extremely quickly and picked-up through a drive-thru location with a Panda Express making it a more convenient experience.
If you’ve been to a Panda Express then you know that they have an extensive menu. Ingredients include beef, chicken, fish, vegetables, noodles, and rice with options from plain steamed rice to brown rice. The servings are generous too. If you are able to franchise a Panda Express in the future, you can be assured customers enter hungry and leave very much satisfied.
They’re Not Stopping
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You’d think with over 2,200 locations, Panda Express would be struggling to find new markets to enter. But even to this day, the restaurant chain is continuing to expand. Their recent branch just opened in Owensboro. Being a part of the Panda Express franchise family means you’re in good hands knowing that the company is continuously growing.
Challenges of a Panda Express Franchise
Every business including Panda Express has its challenges. I view these as the key challenges of franchising a Panda Express.
Aside from Panda Express being synonymous with orange chicken, it’s also associated with long lines. Whenever you’re at the food court or drive-thru, you’re bound to see a long line of people queuing to order at any given time.Though the high traffic is good for business, it can also drive potential customers away. They’ll see the long line and think, “Oh, let’s find someplace else.” Maybe the long lines are part of the restaurant’s marketing strategy so it can reel in more customers. But sometimes, long lines can be a disadvantage and have people opt for some other place that can accommodate them at once.
Panda Restaurant Group Inc. has faced numerous lawsuits before. These lawsuits involved hiring discrimination, overtime pay, and harassment. Though the company has settled these lawsuits, it has damaged Panda Express’s name. You should be aware of these as a possible franchise owner in the future.
Is the Panda Express Franchise Right For You?
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Panda Express is not available for franchise right now but if it does open its doors to sharing their chain in the future then this might be the right franchise for you. Panda Express has a wide variety of items on their menu and a delicious fan favorite known as the orange chicken that brings back customers again and again. If it’s an Asian-American restaurant chain you’re evaluating, Panda Express would be one of the top opportunities I’d take a look at.
What is an alternative Panda Express franchise?
If you can’t wait for the day that Panda Express will accept franchise operator applicants, check out Teriyaki Madness. This Asian-American chain has been around since 2003 and has over 150 branches all over the United States. The restaurant serves bowls of chicken, fish, or beef, including their own version of orange chicken. They also have options like fried rice, noodles, white rice, or brown rice.
Teriyaki Madness is also open for franchisees. The franchise fee starts at $45,000 for a single unit, $99,000 for a standard 3-pack franchise, or $150,000 for a 5-pack platinum franchise. Other fees you should be aware of are weekly royalty fees of up to 6% depending on the gross sales figures you bring in.
Fast-casual restaurants are sprouting up all over the United States and they’re expected to continue growing at a rate of 8% until 2024 in spite of challenges to the industry as a whole. These types of restaurants are known to serve high-quality food in a casual setting. Many also deem them to be healthier compared to fast-food. Whatever the case, fast-casual restaurants are on the rise and one of the top players is Panda Express.
There you have it! Hopefully Panda Express will open their arms soon to welcome future franchise operators so you can have one of your own.