Opening a Panda Express Franchise

Panda Express is a wildly successful chain of restaurants, easily the most dominant chain of Chinese-food restaurants in the U.S.

2. Panda Express is a wildly
successful chain of restaurants,
easily the most dominant chain
of Chinese-food restaurants in
the U.S.

3. The brand is so big, they were
in serious discussions about
purchasing P.F. Changs.

4. They’ve been around longer than you
remember, too — they were actually
one of the first major chains to use the
computer-based POS system (that is
now ubiquitous in quick-service
restaurants worldwide) way back in
1983.

5. Startup Costs

6. According to their 2014 financial disclosures,
the average Panda Express startup costs break
down as follows:

●License Fee: Unknown (see below.)
●Lease (first 3 months): Varies widely; as little as
$12k for a small food court location or as much as
$425k for a larger walk-in branch.

7. ●Leasehold Improvements: Varies widely
again; as little as $80k for a small space
that requires no locally-regulated
improvements or as much as $500k for a
massive (2,500 sqft.) space that requires
complex or elaborate improvements such
as a specialized exhaust system.

8. ●Furniture/Fixtures/Equipment/Supplies: $90k to
$210k, based on expected daily volume, but even
more so on the financing terms you’re able to
negotiate.
●Initial Inventory: $2,200 to $3,600 based on
expected daily volume.
●Computers: $14,000 to $18,000 depending on
financing terms.

9. ●Insurance (annually): $21,000 to $65,000
depending on local regulations and the
likelihood of specific natural disasters.
●Initial Training Expenses: $13k to $30k,
depending on how far you and your
management have to travel to get to the
initial training program.

10. ●Architecture and Construction Costs: $32k to
$85k depending on size of structure and local
price variations.
●Taxes: $4.5k to 10k for sales tax deposits,
depending on expected daily volume.
●Licenses and Permits: $1.5k to $30k
depending on local ordinances.

11. ●Telephone/Internet/Fax and Related
Expenses: $.5k to $1k.
●Necessary Capital: Used to support the
business until it starts to turn a profit —
$60k to $120k depending on expected daily
volume and recurring costs.

12. TOTAL:

13. Profitability

14. According to the owners — Peggy
and Andrew Cherng — the profit
margin of a typical Panda Express is a
little lower than industry leaders,
clocking in around 10%. (Compare to
25% at Chipotle for example).

15. This is, according to the Cherngs,
because Panda focuses so much
on creating great food and
offering its employees strong
opportunities for personal growth.

16. The owners are satisfied with
their profit margin, and don’t
plan on doing anything to
meaningfully move it anytime
soon.

17. Qualifications Required of
a Franchisee

18. There’s only one qualification
Panda Express asks of a franchisee
—
that you become an
employee.

19. Yep, Panda Express doesn’t offer
franchises.

They almost went public in the ’90s,
but are glad they decided against it
and intend to continue with no
franchises for the foreseeable future.

20. Alternatives

21. If you’re interested in running a
Panda Express franchise, don’t let that
news get you down — there are dozens
of Chinese food franchises and several
hundreds of food franchises out there
for you to choose from.

22. Get in touch with a skilled
franchise broker who can help
match you with the franchisor that
best fits your passion, skills and
budget.

23. For further info, visit:

http://franchisecity.net