Panda Restaurant Group: Building a Brand
Hospitality
Written by Grayson Walker   
Monday, 01 October 2007
rp Panda Restaurant Group: Building a Brand - American Executive - RedCoat Publishing
Attention to detail and creative cuisine are just part of this restaurant company’s recipe for success.

While you probably can name several national hamburger joints, pizza restaurants, and quick-service chicken eateries, no one has been able to build a strong Asian restaurant brand. That is, except for Panda Express, which started in 1983.

The 24-year-old chain is celebrating several significant milestones this year, including the opening of its 1,000th Panda Express restaurant and reaching $1 billion in annual revenue. Based in Rosemead, Calif., the privately held Panda Restaurant Group operates Panda Express, Panda Inn, and Hibachi-San, a mall-based quick-service restaurant featuring a variety of Japanese grill and bowl entrees.

Panda Restaurant Group: Building a Brand - American Executive - RedCoat Publishing
Tom Davin, CEO
Although the first Panda Express opened in 1983 in California’s Glendale Galleria, the origins of the company can be traced another decade in the past when Andrew Cherng and his father, Master Chef Ming-Tsai Cherng, established the first Panda Inn restaurant to serve gourmet Mandarin and Szechwan cuisine in an upscale, casual-dining atmosphere.

The success of Panda Inn gave Andrew Cherng the springboard he needed to start Panda Express 10 years later. Cherng and wife Peggy Cherng serve as co-chairs of the company, and day-to-day operations are handled by CEO Tom Davin, who joined the company in 2004 as president and chief operating officer. Before Davin joined the company, Peggy Cherng was named president in 1997 and served as CEO from 1998 to 2004.

Davin is a food-service veteran, having served in senior executive positions at PepsiCo and Taco Bell. As one of the founding partners, he helped lead the creation of Tricon Global Restaurants (now Yum Brands), which consists of Taco Bell, KFC, and Pizza Hut. As COO at Taco Bell, Davin was instrumental in doubling the operating margins during his tenure.

Special items
Panda Express built its reputation on serving quality Chinese food in a restaurant-type atmosphere, with granite tabletops, vibrant colors, and cultural décor. Signature dishes include the Panda original Orange Chicken, Broccoli Beef, Mandarin Chicken, Chicken Eggrolls, and Chow Mien. Many of the dishes were developed by Panda Inn, which now boasts six full-service restaurant locations.

Diners always can find special promotional items or chef’s specials when they visit, including Firecracker Chicken, Cousin Thai’s Spicy Shrimp, Beef with Sugar Peas in Sacha Sauce, and Chicken Breast in Garlic Black Bean Sauce. A kids’ meal program was introduced in 2002 that includes a drink and an option of noodles or rice to complement the child’s entrée of choice. Panda Express also offers party platters for game days or other catered events.

Chain locations can be found just about anywhere people congregate in 37 states and Puerto Rico, including malls, retail stores, neighborhood shopping centers, college campuses, casinos, airports, theme parks, stadiums, and free-standing and drive-through locations. Panda Express was the first restaurant in a supermarket and continues to open locations within grocery stores such as Vons/Pavilions, QFC, HEB, and Giant Foods. In 1997, Panda opened its first drive-through restaurant in Hesperia, Calif., which paved the way for more than 200 drive-through restaurants today.

The Panda Express experience is designed to be fun for both diners and associates. Recognizing that satisfied and well-trained employees are critical to the company’s success, the company aims to pay workers above restaurant industry averages and offers healthcare coverage to all employees, even part-time workers. The company pays 80% of the cost for associates and 50% for dependents. But the key to the success of any chain operation is the quality of its food, visit after visit, location after location. The preparation of burgers and fries has long become standard, thanks to the pioneering efforts of Ray Kroc of McDonald’s fame. The Cherngs have been able to bring the same consistency to the Panda Express experience by focusing squarely on training. Many of its managers learn the ropes at a full-size kitchen in the corporate headquarters, where they learn how to prepare each dish according to company standards.

Value statement
Despite spending just 1% of annual sales on marketing efforts, Panda has achieved 11 consecutive years of same-store sales growth, the main indicator of the health of a company.

Panda Restaurant Group is also committed to the communities where it conducts business. In 1999, the company established Panda Cares, a community involvement initiative led by Peggy Cherng that provides food, funding, and volunteer services to children’s help organizations. In 2005, for example, the company donated more than $1 million to organizations nationwide. Earlier this year, the company announced a new corporate partnership with Children’s Miracle Network, the nonprofit dedicated to raising funds for children’s hospitals across North America.

The company operates around five value statements: proactive to identify opportunities and lead others to create that future; respect for selves and others, creating win-win relationships with guests, business partners, and communities; growth by being humble and open to new ideas in a constantly changing world; commitment to great operators, both in restaurants and support centers; and giving time and resources to support each other and the communities where Panda Restaurant Group locations are situated.

As Panda Express continues its phenomenal growth, Andrew and Peggy Cherng are working hard to maintain the values that have sustained the company from its humble beginnings, including the firm focus on sharing Chinese culture with guests. That includes serving authentic dishes, bringing an inviting atmosphere to its restaurants, and sharing annual celebrations for Chinese New Year.

Panda Restaurant Group continues to think big, envisioning 10,000 restaurants in the near future. With its current restaurant count of nearly 1,000 and 16,000 employees, Panda may be only part way to its ambitious goal, but if past success is any indication, the Cherngs are well on their way.

Grayson Walker, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it , is a freelance writer based in Atlanta.

 
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