For over 30 years, Panda Express has been serving delicious Chinese-American fare to millions of people worldwide.
From Mexico and South Korea to Los Angeles, New York City, and everywhere in between, Panda Express has become a household name for delicious Asian dishes.
Considering the vast popularity of the chain, it’s no surprise that many people are interested in franchising with Panda Express.
So, does Panda Express offer franchise opportunities? If not, what are potential alternatives?
In this article, we’ll discuss everything you need to know about Panda Express franchises — and what you can do if you’re looking for a similar business opportunity.
About Panda Express
| Company Type | Gym |
| Company Foundation Year | 1992 |
| Year of Launching the Franchise | 2003 |
| Franchise Enterprises | 1,353 |
| Corporate Address | 4 Liberty Ln. West Hampton, NH 03842, USA |
Panda Express is a fast-casual restaurant chain that specializes in American Chinese cuisine. Founded in 1983, it is now the largest Asian-segment restaurant chain in the United States.
At Panda Express, you can enjoy a variety of dishes cooked to order with fresh ingredients and seasonings.
Their signature dish is Orange Chicken, which features chunks of juicy chicken breast and crunchy vegetables, all tossed in a sweet and tangy orange sauce.
Chow Mein, another popular item on their menu, consists of wok-fried noodles mixed with a savory sauce and your choice of protein and vegetables.
In addition to its main dishes, Panda Express also offers sides like egg rolls, fried rice, pot stickers, chow mien funs, and more.
With each meal comes the option of white or brown rice as well as fortune cookies for dessert.
The atmosphere at Panda Express restaurants is inviting and casual; families are welcome to sit down together or grab food to go quickly.
The affordable prices make Panda Express an ideal spot for everyone looking for a delicious meal without breaking the bank.
Panda Express Franchise History
Panda Express is a fast-casual restaurant chain that has become renowned the world over for its delicious American Chinese cuisine.
Founded in 1983 by Andrew Cherng and his father Ming-Tsai Cherng, Panda Express quickly grew in popularity thanks to its tasty dishes, inviting atmosphere, and affordable prices.
Panda Express began as an upscale table service restaurant called Panda Inn in Pasadena, California.
However, it was through their connection with then-UCLA football coach Terry Donahue that the Cherngs were invited to open a fast food version of Panda Inn at Glendale Galleria in October 1983.
From there, the first ever Panda Express was opened, and their rise to fame began.
The name “Panda Express” was chosen to emphasize the speed and convenience of the dining experience.
The restaurant chain began to expand rapidly in the following years, with its hundredth location opening on the UCLA campus in 1993.
In 2007, Panda Express opened its 1,000th location in Pasadena, and the same year achieved $1 billion in annual revenues for the first time.
Ten years later, in 2017, Panda Express opened its 2,000th location in New York City.
Today, the restaurant chain boasts over 2,300 locations spread across the United States and around the world.
Over the years, Panda Express has solidified itself as a mainstay in the American Chinese food industry, serving delicious dishes to millions of satisfied customers.
If you’re considering investing in a Panda Express franchise, it’s essential to understand the company’s ownership dynamics, which includes knowing- Who Owns Panda Express. This allows you to get valuable insights into the business model and the advantages of being a franchisee.
Franchise Model
| Franchise Cost Component | Cost Range |
|---|---|
| Initial Franchise Fee | $20,000 |
| Site Selection Costs | $1,000 – $10,000 |
| Leasehold Improvement Costs | $575,000 – $1.94M |
| Fitness Equipment | $43,000 – $953,000 |
| Non-Fitness Equipment | $61,000 – $721,000 |
| Presale and Grand Opening Marketing | $40,000 – $60,000 |
| Exterior Signs | $11,000 – $36,000 |
| Computer Systems | $6,000 – $20,000 |
| Insurance | $5,000 – $25,000 |
| Real Estate Lease Deposits | Up to $87,000 |
| Professional Fees | Up to $25,000 |
| Additional Funds – Six Months | Up to $598,000 |
| Total Initial Investment Range | $936,600 – $4,558,500 |
Is Panda Express A Franchise?
Yes, Panda Express is a franchise. It is a fast-food restaurant chain that offers American-Chinese cuisine. Panda Express operates under a franchise model, allowing individuals to own and operate their own Panda Express restaurant by entering into a franchise agreement with the company.
How Much Does It Cost To Open a Panda Express Franchise?
The cost of starting a Panda Express franchise can range from $936,600 to $4,558,500. This includes several components, such as the initial franchise fee of $20,000, site selection costs of $1,000 to $10,000, and leasehold improvement costs ranging from $575,000 to $1.94 million.
Additionally, there are costs for fitness equipment ($43,000 to $953,000), non-fitness equipment ($61,000 to $721,000), marketing expenses ($40,000 to $60,000), and other items like exterior signs, computer systems, insurance, real estate lease deposits, and professional fees.
Panda Express Revenue & Profit
Year: 2021 Revenue (in billions USD): 3.5 Average Annual Revenue per Store (in USD): 616,240 Profit Margin: 30% Profit Per Store (in USD): $184,872
| Year | 2021 |
|---|---|
| Estimated Annual Revenue | $3.5 Billion |
| Estimated Annual Revenue Per Store | $616,240 |
| Estimated Profit Margin | 30% |
| Estimated Profit Per Owner | $184,872 |
Panda Express has experienced exponential growth in its three decades of operation, culminating in a peak revenue of $3.5 billion in 2021.
This translates to an average annual revenue per store of $616,240 — a significant number considering the chain only operates about 2,300 locations worldwide.
This impressive figure is mainly due to Panda Express’s unique approach to fast-casual dining, offering high-quality Chinese food at accessible prices.
The company’s commitment to quality extends past its product and into its operations as well; Panda Express maintains a strict 30% EBITDA margin which allows it to remain profitable while reinvesting capital back into the business.
This helps the chain to stay agile and well-positioned to grow even further in the future.
How much does Franchise Owner Make In Salary?
The average annual franchise owner salary for Panda Express is $184,872. This figure represents the profit per store achieved by franchise owners after deducting operational expenses and considering the company’s 30% profit margin.
Panda Express Franchise Failure Rate
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2018 | 108 | 125 | 17 |
| 2019 | 125 | 138 | 13 |
| 2020 | 138 | 140 | 2 |
For the Franchised outlets:
- In 2018, the growth rate was (17)/108×100≈15.74%
- In 2019, the growth rate was (13)/125×100≈10.4%
- In 2020, the growth rate was (2)/138×100≈1.44%
Company-Owned Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2018 | 1,897 | 1,979 | 82 |
| 2019 | 1,979 | 2,046 | 67 |
| 2020 | 2,046 | 2,099 | 53 |
For the Company-Owned outlets:
- In 2018, the growth rate was (82)/1,897×100≈4.32%
- In 2019, the growth rate was (67)/1,979×100≈3.38%
- In 2020, the growth rate was (53)/2,046×100≈2.59%
Total Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2018 | 2,005 | 2,106 | 101 |
| 2019 | 2,106 | 2,184 | 78 |
| 2020 | 2,184 | 2,239 | 55 |
For Total outlets:
- In 2018, the growth rate was (101)/2,005×100≈5.03%
- In 2019, the growth rate was (78)/2,106×100≈3.7%
- In 2020, the growth rate was (55)/2,184×100≈2.51%
According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.
We can see that the franchised outlets for Panda Express grew during 2018 to 2019, showing a growth rate between 15.74% and 1.44%. On the other hand, for company-owned outlets, the growth rate of Panda Express ranges between 4.32% and 2.59% for the same period of time.
Overall, when we combine the data of franchise and company-owned outlets, we can see that Panda Express franchise has expanded during 2018-2020 showing a total growth rate between 5.03% and 2.51%.
Panda Express Franchise Payback Period
With a midpoint investment of $1,415,350 and the yearly profit would be $184,872.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Midpoint Investment / Yearly Profit = $1,415,350 / $184,872 = 7.65 years
It would take around 7.65 years to pay back the initial investment for a Papa Murphy’s franchise based on these figures. This time could be shorter or longer depending on many things like sales, costs, and how the business is run.
What Are Some Alternatives To Panda Express Franchise?
For entrepreneurs looking for a similar type of business opportunity with fewer capital requirements, there are several alternatives to the Panda Express franchise.
Here are some popular options:
Noodles & Company
If you’re looking for a fast-casual franchising opportunity, Noodles & Company is one of the most popular options out there.
While its menu focuses mostly on noodle dishes from around the world, it also offers other items like soups and salads.
Founded in 1995, Noodles & Company has grown to more than 470 locations across the country and shows no signs of slowing down.
Unlike most fast food restaurants, Noodles & Company focuses on providing a higher quality dining experience with made-to-order meals that are both delicious and nutritious.
The initial investment required to open a Noodles & Company restaurant ranges from $727,300 to $1,032,642, depending on size and location.
This includes expenses for equipment procurement, construction costs, working capital, marketing funds, and more.
Manchu Wok
If you’re looking to get into the Chinese food industry without shelling out a fortune, Manchu Wok is an ideal choice.
Founded in 1980, this American-Chinese fast-food chain operates about 70 locations across America and Canada.
Unlike Panda Express, Manchu Wok does offer franchising opportunities to experienced entrepreneurs.
While the investment range is still hefty, ranging from $476,050 to $787,500, it’s a lower upfront cost than the Panda Express licensing program.
In return for the substantial investment, franchisees will receive access to some of Manchu Wok’s most popular menu items, as well as their logo and branding materials.
They’ll also have access to ongoing operational and marketing support from the corporate office, thus making it less risky to open a Manchu Wok franchise.
Panda Express Comparison
| Panda Express | Noodles & Company | |
| Year Founded | 1983 | 1995 |
| Franchise Fee | N/A | $35,000 |
| Initial Investment | $370,000–$1,550,200 | $727,300–$1,032,642 |
| Number of Outlets | 2300+ | 270+ |
Conclusion
Panda Express has become a beloved chain in the United States thanks to its tasty and affordable Chinese food.
However, they don’t offer franchise opportunities like other popular fast-food restaurants.
While this can be a major setback for aspiring entrepreneurs looking to get into the restaurant business, there are some great alternatives out there that offer franchising opportunities with lower upfront costs, such as Noodles & Company and Manchu Wok.
Frequently Asked Questions
How Much Does It Cost To Open a Franchise Similar to Panda Express?
The cost to open a franchise similar to Panda Express varies depending on the company you choose, but it ranges anywhere from $476,050 to over $1 million.
How many locations does Panda Express have?
Currently, Panda Express has more than 2300 stores.
Who owns Panda Express?
Panda Express is the largest family-owned and operated Asian dining concept in America. It is owned by the co-founders Andrew and Peggy Cherng.
Where is Panda Expresss Headquartered?
The headquarters of the company is located in Rosemead, California.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.