The decision to open a franchise is a big one. It’s starting your own business, but also buying into someone else’s brand. It takes a lot of blood, sweat, tears, and money, so making sure you’re buying into the best franchise for you is of the utmost importance. Panda Express has a solid history of success and a loyal fan-base, setting new franchise owners up for success with a product that is already in high demand.

The History of Panda Express


Panda Express opened its first location in 1983 and has been growing steadily ever since. Founders Andrew and Peggy Cherng have developed a model that has proved to be successful time and time again. Since 1983, they have opened over 1,000 locations in the United States, and have even gone international. As of today, there are Panda Express restaurants in Canada, Guam, Puerto Rico, Dubai, and South Korea.


They introduced Orange Chicken, which proved to be their signature dish, in 1987. Since then, they have continued to develop new recipes, such as Beijing Beef and Honey Walnut Shrimp to keep their menu fresh and updated. They have also established the Wok Smart menu in an attempt to provide healthier meal options to their customers.


Panda Express continues to grow year after year. With new franchisees opening up restaurants in desirable markets,  this appears to be a company that will be around for a long time.


Getting started


Opening a franchise is not something that can be done overnight. There are many factors and decisions that go into it, as well as a lot of startup costs that will need to be secured.


First, you will need to obtain a license from Panda Express in order to operate a restaurant under their name. They are currently charging $25,000 for this license and it is non-refundable. The initial license term is 10 years, and it can be renewed for 5 years at a time. The renewal does come with additional fees, but the cost of those fees will be determined at the time of renewal.


On top of securing your license, you must also find a place to house your restaurant, utilities to run your restaurant, equipment, product, and personnel. All of these are required to open, and will cost a significant amount of money.


It is estimated that opening a Panda Express location and operating it for the first three months will cost between $360,000 and $1,545,000. The major differences between costs including location and size of restaurant space. Real estate prices and costs of living vary greatly in different parts of the country, or world, making it impossible to predict exact start up costs. Regardless, a prospective franchisee must be prepared to have enough capital to support these costs.


To help with this, Panda Express does offer assistance with financing to help you fund your dream of opening a restaurant. If you do not have the liquid capital to purchase the franchise license outright, they will set up payment terms with you. The specific terms of the agreement will depend on many factors, including your credit history, and will be worked out with Panda Express during the process. At this time, they do not offer business loans to help cover other start-up costs, such as building rent and equipment purchases. Should you require assistance with a business loan, you are encouraged to contact your financial institution.


What to Expect in a New Panda Express Restaurant


Panda Express is very popular among people who have tried it. They have cultivated and maintained a loyal following with their consistent quality and innovative recipes. Because of this, a new franchise owner can expect to draw in customers who have already tried Panda Express and enjoyed it, as well as those who have not yet tried it, but are curious.


For those who enjoy Panda Express, the excitement that comes with discovering a restaurant has opened up closer to them will be obvious. Because their market is not yet saturated, you are sure to find customers that are pleased to have one of their favorites now in their neighborhood. For those that have not yet tried it, a new restaurant can bring joy for the simple fact that it is new. People love choices, and introducing a new option to the mix may be the ticket to getting them through the door.


Panda Express is currently enjoying a positive net growth, meaning that more of their restaurants are opening than closing. Their current net growth score is 78. This is very promising for prospective owners. This means that the restaurants that are opening are finding success and able to sustain themselves, as well as grow. A positive net growth score is indicative of a healthy, well-balanced system. This is an important factor to consider when choosing the right franchise to purchase.


As with all business ventures, a franchise is not a guaranteed success. The pros to buying into a franchise include the brand recognition. By purchasing a franchise of a company that already has a strong following, you are opening yourself up to their customer base. Very few people think about the franchise owner behind the restaurant, only the brand. They know that they ate there before and enjoyed it. This gives your restaurant instant credibility and a wider selection of potential customers. Opening a restaurant on your own leaves you without the name brand. You will not have hundreds of thousands of people who have already tried the product and want to have it again. You will have to entice them to come in and try your product and hope that they like it. And if they like it, you have to hope that they tell their friends.


Your Restaurant Over Time


Once you have established your Panda Express location and have a solid monthly revenue stream, you’ll want to focus on areas that will keep customers coming back for more. Maintaining high quality standards is the best way to ensure this. With a franchise, the food is expected to taste the same regardless of the location. If a customer tries the Orange Chicken in Tulsa, OK and loves it, but then orders it from you in California and the food is dry, cold, and unflavorful, it will leave a him with a sour impression of Panda Express. Customers, generally, remember poor experiences better than good ones, so you’ll want to ensure that each customer’s expectations are met each and every time they visit. Panda Express has policies in place to help ensure the continuity of flavors and quality across all of their locations. These standards are crucial to maintaining that taste that is so heavily associated with the Panda Express name. Ensuring your restaurant is following the standards will help keep customers coming back.


While maintaining customers is important to your business, so is maintaining good employees. It costs money to hire and train new employees. Keeping your staff happy and treating them properly helps ensure they stay with your company longer. All too often, companies forget to treat their employees with dignity and respect, angling that the workers need the company more than the company needs them. This is simply not true. A company needs hard working, loyal employees in order to run at the optimum level. When workers feel abused or taken for granted, their desire to go above and beyond drops and their work performance suffers. It is proven that those who feel appreciated will often do more than expected. When you have that kind of dedication, it can launch your business higher, as customer satisfaction will continue to grow. Unhappy staff and high turnover rates can sink a business almost as fast as unhappy customers.


Poor training can also be a factor in unhappy staff. Those who do not feel as though they know how to properly do their job will often get frustrated. Panda Express offers extensive training programs to ensure each team members feels comfortable in their role. When everyone knows what is expected of them, the wheels of progress turn much more smoothly.


Aside from actually running your business, you will also have to stay in compliance with your parent company, Panda Express. There will be conferences and trainings that you will be encouraged to attend to ensure you are meeting guidelines and standards.You will also be required to pay royalty fees to Panda Express for the use of their products and name. The current going rate for royalties is 8% of sales. Keeping your relationship with your parent company in good standing is mandatory for keeping your licenses. Panda Express maintains the right to terminate or not renew a franchise license, in the event they are unhappy with the franchisee’s performance or compliance. Should that happen, your business is effectively dead.


Is a Panda Express Franchise Right for You?


Panda Express has been around for over 30 years and is showing no signs of stopping. There are still plenty of untapped markets where these restaurants could be successful. Working with Panda Express, you can choose your territory and open your first store in an area that has a need or a craving for their product. While they do not offer territory rights to franchisees, they will assist with locating the perfect spot for your restaurant. They are more than willing to offer tools and support to help your restaurant succeed. After all, your success is their success.


Owning a franchise comes with a lot of perks, but it also comes with some catches. Working with a brand that is already recognizable gives you a leg up over starting a business from scratch and having to promote it from the ground up, but you also have very little say about the direction of the business. Company standards and guidelines must be adhered to, or the risk of losing the franchise abounds. Panda Express has a hearty reputation and unlimited growth potential around the world. Becoming a part of the Panda Express community is a big choice, but, when done right, can mean the start of a whole new career, and life.


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