Panda Express - Why They're Successful

Summary

The video explores the success story of Panda Express, the largest Asian fast-food chain in the U.S., with over 2,000 locations and $3 billion in annual sales. It attributes their success to factors like owning other restaurant chains, flexibility in adapting to various environments, a lack of competition, a menu that appeals to American tastes, early adoption of technology, being a private company, focusing on employee happiness, and charitable efforts through Panda Cares. The video also mentions the brand's immigrant founders, Andrew and Peggy Cherng, and their journey from a single Panda Inn to a global phenomenon.

Takeaways

• 🍽️ Panda Express is the largest chain of Chinese restaurants in the U.S., with over 2,000 locations and expanding globally.
• 📈 The company, Panda Restaurant Group, is owned by Andrew and Peggy Cherng, who are billionaires and immigrants from Taiwan and Hong Kong, respectively.
• 🏆 Panda Express's success is attributed to its ability to adapt its concept to various sizes and environments, including malls, standalone restaurants, and non-traditional locations like airports and military bases.
• 🔍 The lack of direct competition in the fast-food Asian food market has allowed Panda Express to grow without significant challenges from similar chains.
• 🍤 The menu at Panda Express is tailored to appeal to American tastes, with dishes like Orange Chicken and Honey Walnut Shrimp being particularly popular.
• 💻 Technology has played a significant role in Panda Express's operations since its early days, with the use of computers and point-of-sale systems for efficiency and inventory control.
• 🏛 Being a private company, Panda Express has avoided franchising and public ownership, allowing the founders to maintain control over the brand and its quality.
• 👩‍💼 The company places a strong emphasis on employee satisfaction, offering above-average pay and benefits, which is believed to contribute to better customer service.
• 🤝 Panda Express's charitable efforts, particularly through Panda Cares, have raised significant funds for children's hospitals, education, and disaster relief, enhancing the company's image.
• 📊 The company's growth strategy focuses on reinvesting profits rather than seeking external funding through franchising or public offerings, aligning with the founders' vision for the business.
• 🌐 Panda Express's expansion into international markets, starting with Mexico in 2011 and now including countries like Canada, South Korea, Japan, Russia, and the Philippines, demonstrates its global appeal.

Q & A

What is Panda Express and why is it significant in the fast food industry?

Panda Express is the largest chain of Chinese restaurants in the United States, with over 2,000 locations, and it is part of the Panda Restaurant Group. It is significant because it has achieved remarkable success, with over 3 billion dollars in annual sales, making it one of the most successful restaurants in the world.

Who are Andrew and Peggy Cherng, and what is their background?

Andrew and Peggy Cherng are the husband and wife team behind Panda Restaurant Group, which includes Panda Express. They are immigrants from Taiwan and Hong Kong, respectively, who met while studying mathematics at Baker University in Kansas. Andrew managed a restaurant owned by his cousin before opening his own restaurant, while Peggy worked in the Aerospace field and even coded for the U.S. Navy.

What was the initial concept of Panda Express and how did it evolve?

Panda Express started as a traditional Chinese dining restaurant called Panda Inn. It evolved into a fast-food version of Panda Inn when the developers of the Glendale Galleria Mall asked the Cherngs to create a fast-food version for their food court. This new concept was named Panda Express to convey its faster service.

How has Panda Express adapted its concept to different environments?

Panda Express has shown flexibility by adapting its concept to various sizes and environments, including shopping malls, standalone restaurants, airports, military bases, and sports stadiums. This adaptability has allowed the brand to operate in diverse locations, from hundreds to thousands of square feet.

What is the significance of Panda Express's lack of competition?

Panda Express has benefited from a lack of competition, as it has operated in emerging markets for both fast food and Asian food without many comparable chains. This has allowed Panda Express to establish a strong presence and grow without significant competition.

What is Panda Express's stance on franchising and public company status?

Panda Express is a private company and does not franchise significantly. The Cherngs prefer this approach to maintain complete control over their brand and operations, avoiding the potential quality issues that can arise with franchising or the pressure from investors that comes with being a public company.

How has technology played a role in Panda Express's success?

Technology has been instrumental in Panda Express's success since its early days. The use of computers and a point of sale system from 1983 gave them an advantage in efficiency, inventory control, and understanding customer preferences, which contributed to their growth.

What is the 'Panda Way' and how does it influence the company's employee focus?

The 'Panda Way' is a philosophy embraced by the Cherngs that emphasizes happy employees leading to happy customers. This approach has led to above-average pay and benefits for employees, encouragement for personal development, and a low turnover rate, contributing to the company's overall success.

What is Panda Express's charitable initiative and how has it contributed to the company's image?

Panda Express established Panda Cares in 1999, focusing on raising funds for children's hospitals, education, and disaster relief. Having raised over 247 million dollars, this initiative has contributed positively to the company's image and customer perception.

What is the debate surrounding the authenticity of Panda Express's Asian cuisine?

There is an ongoing debate about whether Panda Express serves authentic Asian cuisine. The company has made adjustments to its menu to appeal to American tastes and to facilitate quicker preparation, which has been effective but may differ from traditional Chinese dishes.

What are some of the other restaurant chains owned by the Panda Restaurant Group?

In addition to Panda Express, the Panda Restaurant Group owns other chains such as Hibachi-San, a Japanese restaurant started in 1992, and has involvement in the franchise of Raising Cane's in Hawaii and Alaska.

Outlines

00:00

🍴 Panda Express: A Global Success Story

The script introduces Panda Express, highlighting its significance as the largest chain of Chinese restaurants in the U.S. with over 2,000 locations and international expansions. It delves into the history of its founders, Andrew and Peggy Churn, and how their immigrant background and diverse professional experiences contributed to the restaurant's growth. The narrative covers the early struggles, the strategic opening of the first Panda Inn in Pasadena, California, and the eventual creation of Panda Express as a fast-food variant in mall food courts.

05:00

📈 Flexibility and Market Position

Panda Express's adaptability and strategic expansion are emphasized, showing how the chain evolved from mall-based locations to various settings like airports and military bases. The segment discusses the lack of significant competition, noting how Panda Express capitalized on the emerging fast food and Asian cuisine markets. Comparisons with competitors like Manchu Wok and PF Chang's illustrate how Panda Express maintained its dominance and continued to grow.

10:02

🍛 The Menu and Technological Edge

This section highlights the popularity and adaptation of Panda Express's menu to American tastes, with items like the famous Orange Chicken. It also discusses the early adoption of technology by Peggy Churn, which provided the company with efficiencies in order processing, inventory control, and customer satisfaction. The narrative underscores how these factors contributed to the brand's success and customer loyalty.

🔒 Private Ownership and Employee Focus

Panda Express's unique position as a private company that doesn't franchise extensively is explored. This choice allows for complete control over operations and quality, differentiating it from other fast-food chains. The Churns' emphasis on employee satisfaction, better wages, benefits, and opportunities for advancement are highlighted as key components of their business philosophy, which positively impacts customer experience and company growth.

🤝 Charitable Efforts and Community Engagement

The final segment covers Panda Express's charitable initiatives through Panda Cares, which focuses on supporting children's hospitals, education, and disaster relief. The company's transparency and active involvement in fundraising, such as donation boxes and rounding up purchases, enhance its public image and contribute to its success. The script ends by inviting viewer feedback on their favorite menu items and thoughts on Panda Express's success factors.

Keywords

💡Panda Express

Panda Express is the largest chain of Chinese restaurants in the United States, with over 2,000 locations primarily in the U.S. and a growing international presence. It is the main focus of the video, which discusses its success and growth. The term is used to introduce the topic and is repeatedly mentioned throughout the script as the central subject of discussion.

💡Panda Restaurant Group

Panda Restaurant Group is the parent company of Panda Express and other restaurant chains. It is significant in the video as it provides a broader context for Panda Express's success, showing that the company's growth is part of a larger business strategy. The script mentions that Panda Express is the largest brand under this group, highlighting the company's diversified portfolio.

💡Andrew and Peggy Cherng

Andrew and Peggy Cherng are the husband and wife team behind Panda Restaurant Group. Their immigrant story and success in the U.S. are mentioned as an inspiring narrative in the video. The script describes their backgrounds and how they became billionaires through their restaurant business, emphasizing their role in the success of Panda Express.

💡Panda Inn

Panda Inn was the first restaurant opened by Andrew and Peggy Cherng, which later led to the creation of Panda Express. The term is used in the script to illustrate the origins of the Panda Restaurant Group and how it evolved into the fast-food concept that Panda Express represents today.

💡Fast Food

Fast food is a type of mass-produced food designed for quick service and minimal preparation. In the video, the script discusses how Panda Express adapted the concept of traditional Chinese dining into a fast-food model, which was a key factor in its expansion and success.

💡Adaptability

Adaptability in the context of the video refers to Panda Express's ability to modify its restaurant concept to fit various environments, such as shopping malls, standalone locations, and non-traditional venues like airports and military bases. The script highlights this as a significant reason behind the brand's success, showing its flexibility in different settings.

💡Competition

The lack of competition is presented in the video as a factor that contributed to Panda Express's success. The script mentions that there were few competitors in the Asian fast-food market when Panda Express began, giving them an advantage. It also discusses how they dealt with competitors like Manchu Wok and PF Chang's.

💡Authenticity

Authenticity in the video refers to the debate over whether Panda Express serves authentic Asian cuisine. The script notes that while the food is not the same as what one would find in China, the brand has successfully introduced Asian flavors to the American market, with dishes like Orange Chicken becoming popular.

💡Technology

Technology is mentioned in the video as a tool that helped Panda Express become more efficient from the start. The script describes how the use of computers and point-of-sale systems gave them an advantage in managing inventory and sales, contributing to their overall success.

💡Private Company

Being a private company is highlighted in the video as a unique aspect of Panda Express's business model. The script explains that Panda Express has chosen not to franchise or go public, allowing them to maintain complete control over their brand and operations, which is seen as a factor in their consistent growth and success.

💡Employee Focus

Employee focus in the video refers to Panda Express's approach to treating their employees well, which is believed to lead to better customer satisfaction. The script mentions higher pay, better benefits, and opportunities for personal development, which contribute to a positive work environment and the company's success.

💡Charitable Efforts

Charitable efforts are discussed in the video as part of Panda Express's commitment to giving back to the community. The script talks about the establishment of Panda Cares, which has raised over 247 million dollars for various causes, enhancing the company's image and contributing to its overall success.

Highlights

Panda Express is the largest chain of Chinese restaurants in the United States with over 2,000 locations.

The company has expanded globally, with restaurants in Mexico, Canada, South Korea, Japan, Russia, and the Philippines.

Panda Express is part of the Panda Restaurant Group, which also owns other restaurant chains.

Andrew and Peggy Cherng, founders of Panda Restaurant Group, immigrated from Taiwan and Hong Kong and became successful in the U.S.

Panda Express started as a traditional Chinese dining restaurant called Panda Inn before transitioning to a fast-food concept.

The company has shown flexibility by adapting their concept to different sizes and environments, including malls, standalone restaurants, and various other locations.

Panda Express has faced minimal competition in the Asian fast-food market, which has contributed to its success.

Menu items like Orange Chicken and Honey Walnut Shrimp have become popular and contribute significantly to the brand's success.

Panda Express has leveraged technology, including point-of-sale systems, to improve efficiency and inventory management.

The company is privately owned and does not franchise, allowing for complete control over the brand and its operations.

Panda Express focuses on employee satisfaction, offering better pay, benefits, and opportunities for growth.

The company's charitable efforts through Panda Cares have raised over $247 million for children's hospitals, education, and disaster relief.

Panda Express has a unique approach to business, valuing long-term growth and maintaining the family's vision over short-term profits.

The company's success is attributed to the 'Panda Way' philosophy, which emphasizes employee happiness leading to customer satisfaction.

Panda Express has a low employee turnover rate, indicative of a positive work environment and company culture.

The brand's image is positively influenced by its charitable work, which is well-known to its customers.

Panda Express's menu has been adapted to appeal to American tastes while maintaining the essence of Asian cuisine.

Transcripts

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[Music]

this is a topic that I'm excited to talk

about because I would estimate that I've

been to Panda Express more than any

other fast food restaurant and I'm

guessing that most of the people

watching this have been there as well I

say that because they are the largest

chain of Chinese restaurants or any

Asian food in the United States that is

a big title they have over 2 000

locations that are mostly in the United

States but in 2011 they opened a

restaurant in Mexico and have since been

making their way all across the world

for example you can now find them in

Canada and South Korea Japan Russia the

Philippines and all totals to over 3

billion dollars in sales a year making

them one of the most successful

restaurants in the world so I thought it

would be interesting to take a closer

look at Panda Express and try to zero in

on the biggest reasons behind that

success while talking about how they

grew into what they are today my first

reason behind their success is the fact

that this company owns other chains of

restaurants that have proved to be

helpful on multiple levels see the

company that I'm talking about here is

Panda Restaurant Group and even though

Panda Express is by far the largest

brand that they own they are not the

only one nor were they the first the

main people behind all of it are the

husband and wife team Andrew and Peggy

churn today they are in fact

billionaires so it's a great story of

immigrants succeeding in the U.S Andrew

was raised mostly in Taiwan while Peggy

came from Hong Kong they met each other

in the 1960s when they were students

studying mathematics at Baker University

in Kansas after graduating Peggy

continued her education earning her PhD

in electrical engineering and going to

work in the Aerospace field for various

companies and even did some coding for

the U.S Navy but Andrew surprisingly

went on to manage a restaurant that was

owned by his cousin honestly it doesn't

sound like the best job he says that he

would typically work seven days a week

and get paid eight hundred dollars a

month for it plus it sounds like he had

a lot of disagreements as far as how it

should be operated so in 1973 he left

his position there and set out to open

his own restaurant he raised sixty

thousand dollars partially from a loan

from the small business administ

registration but most of it came from

his friends and family his father was in

fact a chef so he was a valuable partner

and teaming up with Andrew to open the

Panda Inn in Pasadena California unlike

the Panda Express that we know today it

was more of a traditional Chinese dining

type environment the costs were fairly

low because most of their labor force

consisted of family members working for

free but the sales were there because

there was a diverse community in the

area that was receptive to the foreign

Cuisine so for the next nine years they

existed as that single successful

restaurant then all of that changed in

the early 1980s in that short time

Andrew's father died Peggy left her

career to help run the business and they

opened a second Panda Inn in Glendale

California that also proved to be

popular so much so that they were asked

by the developer of the nearby Glendale

Galleria Mall to essentially make a fast

food version of the Panda Inn to be

opened in their food courts the churns

thought that there was potential there

so they agreed to do it and when it came

to naming it they called it Panda

Express to convey that it was a faster

version of their existing panda in by

the way the panda in chain still exists

today as five locations in California

and clearly without the foundation that

it provided Panda Express would have

never existed a couple of other

restaurant chains that they own that

have potentially helped them in

different ways would be a Hibachi's son

that's a Japanese restaurant that they

started in a mall in Minnesota in 1992

and raising canes they didn't start that

one but as of 2018 they do earn money

from the ones that they franchise in

Hawaii and Alaska all right that was the

longest one my next reason behind their

success would be flexibility and for

this I'm mostly referring to their

ability to adapt their concept into

different sizes and different

environments I mean I just talked about

how the chain was started by adapting

their panda in restaurant into an

Express Mall based concept but it kept

evolving from there after five years

they had about a dozen locations that I

believe were all in shopping malls but

then they started opening bigger

Standalone restaurants as well as some

others that were inside of other types

of buildings it started when they they

open one inside of a Von supermarket in

1988 but today you can commonly find

them just about anywhere I'm talking

about airports military bases sports

stadiums some of them are hundreds of

square feet While others are thousands

of square feet they all have to be

operated differently and Panda Express

has been flexible enough to make all of

it work next up on the list is a lack of

competition not to take anything away

from them but for pretty much their

entire existence Panda Express has not

been operating in the most competitive

environment sure maybe in some ways but

I'll challenge you to name another chain

of restaurants that is comparable to

Panda Express in their early days fast

food was considered to be an Emerging

Market in the U.S as was Asian food and

there weren't many others taking

advantage of both of those at the same

time I thought it was interesting that

they say they started habachi-san as a

way to protect Panda Express from the

competition that they were getting from

Japanese restaurants probably the most

notable direct competitor that they've

ever had to face would be Manchu walk

it's a similar chain of mall-based

Chinese restaurants that used to be

pretty big on the east coast in the

1990s when Panda Express was first

trying to enter the eastern part of the

country they initially had some trouble

drawing people away from the already

familiar Manchu walk but it didn't take

long they don't seem to get the best

reviews not anymore anyway and Panda

Express was just expanding quicker today

they are not even a factor with only 13

locations in the US remaining another

competitor worth mentioning would be PF

Changs being that they are another large

chain of Asian restaurants but that

one's more of a casual dining sit-down

restaurant almost anybody who's been to

both of them will tell you that they are

very different from each other plus with

only around 215 locations PF Chang's is

technically about 10 percent the size of

Panda Express so overall Panda Express

got in early in some emerging markets

and never really let anyone catch up to

them going back to the list how have I

talked about Panda Express for so long

without even mentioning their menu if

you haven't tried their honey walnut

shrimp what have you been doing now it

does cost a little bit extra but it is

well worth it there's a whole debate out

there as to whether or not they serve

authentic Asian Cuisine I don't want to

be part of that debate or get into the

specifics but obviously it's not the

same thing that you would get in China

they have made changes to make the food

more appealing to the American customer

base and they have made changes to allow

them to make it quicker it changes that

have obviously been effective their

famous orange chicken for example was

actually invented by a chef working for

them in 1987. it has since become their

most popular menu item and the reason

that many people go there they sell tens

of millions of pounds of it each year so

that alone probably accounts for a good

portion of their success really I could

stay here talking about their menu for a

while but for the purposes of this video

I just want to convey how effective

they've been in introducing Asian food

to the American markets so much so that

for many Americans this has been their

first and biggest exposure to it next on

my list I want to briefly talk about how

technology has been helpful for Panda

Express for this I'm looking at Peggy

churn giving her various degrees science

and experience in the field she knows

about technology and maybe the biggest

way that this has helped them is the

fact that from the beginning in 1983

they were using computers and a point of

sale system giving them an advantage

over the rest of the industry because

most of the others weren't doing it yet

it made them more efficient in that it

allowed people to place their orders

faster it gave them better control of

their inventory they learned which items

were selling better than others helping

them reduce their cost and making the

customers happier in the process okay my

next reason behind their success is a

debatable one but Panda Express is

amazingly a private company that doesn't

franchise I should say that there are a

few minor exceptions on the franchising

part but nothing significant this right

here has to be one of the biggest ways

that they stand out from the rest of the

industry because these are such

effective ways to grow that they've been

used by almost every other fast food

chain I've talked about this stuff a lot

on the channel before but really quick

franchising helps a restaurant open a

bunch of locations because it's

essentially other people opening

restaurants but paying paying you to use

their brand and becoming a public

company is a way of selling ownership of

it and commonly using that money to open

more restaurants or helping the existing

ones or whatever my point is that

without doing either one of these it is

very hard to grow Panda Express like I

said amazingly has been able to do it by

reinvesting their own profits they say

that they prefer this approach because

it's their only way to maintain complete

control you know if you have a

franchisee running a location he may let

the quality of the food slip or the

service or whatever or if they became a

public company they would then have to

answer to investors who may want to make

changes that they disagree with plus the

stock market is also known to Value

short-term profits over the long-term

business plan I say it's debatable

because if they did do these things they

would probably be bigger but due to the

lack of control the restaurants would

almost certainly not align as closely

with the family's vision and may be less

popular with their customers as a result

so it's a definite trade-off but the way

that they've chosen to do it has

obviously been paying off my next reason

kind of ties in into that it's their

focus on their employees it's the

mentality that happy employees lead to

happy customers and for the most part

that does seem to be the case here there

have been some issues at times but Peggy

and Andrew are always talking about the

panda way and pretty much identify this

as the biggest reason behind their

growth and success if you work for Panda

Express you likely make more money than

the industry average and get better

benefits if you work so many hours a

week and you'll be encouraged to

meditate and read self-help books they

may even want you to take management

courses because a lot of the people in

their corporate offices are promoted

from the restaurants they have a low

turnover rate they've been put on

various lists talking about the best

employers I don't know there's so much

that could be said about it if you have

experience working for them maybe you

could provide some insight but they do

appear to focus on their employees and

that has reflected well upon the rest of

the business my eighth and final reason

behind their success is their charitable

efforts in 1999 they established a panda

cares they're primarily focused on

raising money for children's hospitals

education and disaster relief since the

start of it they have raised over 247

million dollars that mostly come from

customers within the restaurants but

they also have this annual golf

tournament and employees help out and

there's other means as well you may want

to look further into it if you're

interested but the fact is that they're

very upfront about it to a point where

most Panda Express customers are

probably well aware of it maybe you've

seen that donation box or you've been

asked to round up your purchase to the

nearest dollar or whatever else and that

contributes to their overall image and

general success of the company let me

know in the comments what do you get

when you go to Panda Express as I said I

am all about that honey walnut shrimp

and the orange chicken of course it's a

winning combination but also what do you

think of my eight reasons behind their

success is there something that doesn't

belong there or should something else be

added to it maybe you think that

adorable little panda on the logo has

played a part of it or maybe the fortune

cookies those are always fun so any

thoughts you have about Panda Express

leave them in the comments I'd like to

hear what you have to say thank you for

watching

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