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FE&SEditorial Archives2006 — April — Chain Profile

Chain Profile: Panda Express
Ranges for woks, steamtables and fryers are among the items that comprise this rapidly growing chain’s E&S package, which allows staff to produce Chinese fare that meets the approval of customers with discriminating palates.

Photos courtesy of Panda Express

This South Gate, Calif., street location features a tower with bright Panda pictures. Nearly half of all Panda Express restaurants are street locations.

Customers entering a Panda Express restaurant are drawn immediately into a world designed to show off the company’s Chinese fare served in a quick-service setting. One’s gaze immediately locates the company’s red, white and black logo with the letters “Panda Express•Gourmet Chinese Food” circling an appealing panda bear positioned on a warm red background. In some units, bigger-than-life-sized forks and spoons mark each side of the sparkling front serving counter where menu boards drop from above and various shades of reds and yellows vibrate above the black and white checkerboard panels that bank the lower part of the front counters. Banners hanging from ceiling beams resemble hand-painted Chinese scrolls found throughout the mainland.

With its steamtable pans holding appetizers and entrées the staff dish out upon request, the serving line draws the customer’s attention next. Daily choices may include northern Chinese-style pot stickers with minced chicken, scallions, napa cabbage, ginger and toasted sesame oil, lightly steamed then pan-fried until golden brown; spring rolls; Cousin Thai’s spicy chicken breast stir-fried with bell peppers, cilantro and peanuts in spicy red-pepper sauce; pork ribs in black-bean sauce; Kung Pao cashew chicken breast with diced string beans, red bell peppers and button mushrooms, seasoned with ginger, garlic and chilies; Mandarin chicken; beef with broccoli; sweet and sour pork; mixed vegetables; and fried rice. Steamed rice is cooked continuously in a rice cooker.

Culinary action takes place behind this service station on a hot cookline where staff show off their skills tossing and mixing ingredients in woks on ranges, and fryers.

In the dining area, tables with granite tabletops built at various heights and sturdy wood chairs offer several types of seating options.

Staff training to use woks involves skills in flame, motion and time. Woks require at least 150,000 Btu for proper operation. Also on the hot cookline are fryers.

The combination of a cheerful ambiance with E&S on display, flavorful recipes consistently reproduced in all units and responsive service is designed to pique the interest of customers who have myriad choices for dining out. Panda Express owners, their executive team and staff want mainstream America to incorporate Chinese cuisine into their regular diets. Their strategy is notably successful.

Since the first unit opened in 1983 in the Glendale Galleria in California, Panda Express has grown to include more than 800 units in 36 states, Japan and Puerto Rico. “Panda Express’ rate of growth keeps it in the news spotlight. For years, we’ve had an annual 20 percent unit growth. This year, in 2006, we’ll open 175 units,” says Larry Behm, senior vice president of operations support and innovation for Panda Express, whose professional background includes years of experience with Taco Bell Corp. and Pizza Hut Inc.

The beginnings of Panda Express date back to 1973, when Andrew Cherng opened Panda Inn using recipes developed by his father, Ming-Tsai Cherng, a master chef who worked in China, Taiwan and Japan. Ten years later, Andrew and his wife, Peggy, founded Panda Express as an extension of the Panda Restaurant Group. From the onset, the owner sought to transfer the Asian flavors captured in the recipes served at the upscale Panda Inn into a quick-service environment.

Since the early 1980s, Panda Express’ aggressive growth has resulted in its presence in freestanding locations, strip malls, food courts, supermarkets, college campuses, airports, libraries, stadiums and theme parks. According to John Mitchell, senior vice president of restaurant development, whose background experience also includes Taco Bell and working with supermarkets, the largest units, 2,500-square-foot freestanding restaurants, usually require $300,000 equipment packages; the 2,000-square-foot end caps require $250,000 packages; and the smallest, 500-square-foot units, $10,000 packages.

Located on the University of California, Los Angeles campus, Panda Express’ restaurant design emphasizes bright colors and the steamtable display of its menu. In this location, seating is part of the general food court.

Success hasn’t come without mistakes. “After we first went into strip malls, we started Panda Panda, but pulled back about four years ago,” Behm explains. “We just couldn’t pull all the pieces together, but this taught us how to improve Panda Express. For instance, Chinese food must be cooked to order, which we did. But in the early days, there were bottlenecks when large groups of customers came in at once. We had to have a way to hold the food, even if for short periods of time, without losing quality. We also had to figure out a way to manage the cost of food and train staff to cook with woks, which requires special expertise.”

From the beginning, custom-made steamtables became an integral part of the equipment packages for all prototypes. “To some degree, this limits what we can offer and still maintain high quality,” Behm says. Customers walk along a long curved line, view the day’s offerings, many of which are displayed in the steamtables, and tell staff which items they’d like. At the end of the line are an ice bin with bottled drinks and a cash register. Customers who want fountain drinks help themselves at a specified beverage location designed with a granite countertop with light wood paneling.

Four years ago, the open-kitchen was incorporated into unit designs, Mitchell says. Behind the service line, staff prepare appetizers and entrées on a hot line. All units have at least one wok (larger units have three) that require 150,000 Btu for cooking dishes at high heat for short periods of time. “Cooks are trained in flame, motion and time to use the woks properly,” Behm says. “They are also trained in the ‘trick’ in Chinese cooking, putting in sauce just at the right time so it can firm the starch.”

A stainless-steel wall stands behind the woks. Utensils for the woks and fryers are positioned nearby. Staff use fryers to prepare breaded items and blanch some ingredients before they wok them in small batches. Also on the line is a rice cooker.

The red and yellow color scheme at Rancho Cucamonga in California offers customers a bright environment in which to eat. Various table and chair heights offer seating options. This unit is typical of many freestanding locations.

Staff working the line have access to ingredients stored in a nearby walk-in cooler. Customers can see staff reach through glass display doors to take out fresh-cut vegetables from plastic bins. Behind-the-scenes, staff stock these coolers from the back. Staff also access ingredients from a low-rise refrigerated storage section between the cooking range and display steamer.

What customers don’t see are a walk-in cooler and a walk-in freezer, a dishwasher and cold prep tables and sinks in the back of the house. Staff chop vegetables such as onions and cabbage for a chow mein mixture in a food processor, but cut most other vegetables, including 50 pounds of potatoes, four cases of broccoli and three cases of zucchini, by hand. “A typical food processor brings too much water out of the vegetables,” Behm says.

In some units, sushi is now on the menu. Staff prepare this Japanese specialty in designated areas and keep it at proper temperature in a display refrigerator near the customers.

While continuing to tweak in-store ambiance and menu selections to drive traffic, Panda Express executives are also implementing strategies such as building in drive-through capabilities to enhance unit-sales growth. Drive-through currently accounts for up to 40 percent of sales at some units. “We’re testing a call-center operation for drive-through ordering,” Mitchell says. “For example, a customer in California drives up to a speaker, places an order with someone who is in Colorado, who keys in the order and transmits it to the California unit where it is prepared and given to the customer. We believe this will contribute to greater labor efficiency because employees on-site don’t have to take orders. Also, bi-lingual people may be taking orders in the call centers, which will speed up service at some locations.

At units with drive-through service, an additional steamtable unit sits near the window so staff can fill orders close to the point of service.

Behm adds that Panda Express also prefers to position itself as a chain with a distinct, even unique “people-centered culture.” The culture is defined by Panda’s mission: “Deliver exceptional Asian dining experiences by building an organization where people are inspired to better their lives.” Action is guided by five values: proactive, respect/win-win, growth, great operations and giving.

“We focus on hiring people at Panda Express who have energy, gumption and a fire in their bellies,” Behm says. “We’re often the first employer for many people. We want to be the best place for people to start working in this industry and we want to train people to work in this economy. We like to share success stories about employees like a woman who came as an immigrant to the United States and took a job in one of our restaurants. The manager taught her two words of English every day. Now, she is a district manager. We share these stories to show our commitment and how everyone can be inspired to better their lives.”

One value, giving, is expressed visibly through Panda Cares. This non-profit program developed by Panda Restaurant Group, gives back to communities it serves by supporting the health and education of children.

“How this plays out into the equipment is that we take the time to be sure the ambiance conveys excitement to the customer,” Behm says. “They see surfaces such as granite tabletops, bright colors and interesting treatments on the walls so these restaurants don’t look cookie-cutter. And, when customers walk up and see the custom-made steamtable line and the food and watch it being cooked in woks, they know it’s fresh.”

When units are conceived, Mitchell admits, “design comes first and equipment second. No one else operates like we do with the steamtable and ranges,” he adds. “Everything is custom-designed, even the ladles and smallwares.”

As might be expected, Mitchell says that Panda Express is always looking for ways to “improve” its E&S package. “For instance, we’d like our fryer manufacturer to design its equipment with larger capacity. We’re rigorous and don’t hold food long once it has been cooked in batches. Therefore, we must have equipment that can handle great capacity.”

Cherng’s ambition is well-known within the foodservice industry. He unabashedly admits he wants to see 10,000 Panda Express units to open in the long term. Among the trusted companions on this journey to bring Chinese food into mainstream American diets will be the E&S that is durable and flexible to meet production demands day in and day out.

Panda Express Players

Founders & Owners: Andrew Cherng, chairman, and Peggy Cherng, co-chairman and CEO, of Panda Restaurant Group, which owns Panda Inns, Panda Express, Hibachi-San and a retail line of frozen entrées

Senior Vice President, Operations Support & Innovation: Larry Behm
Senior Vice President, Restaurant Development: John Mitchell
Vice President, Purchasing and Distribution: Ris Wiguna
Senior Vice President and Chief Marketing Officer: Glenn Lunde
Director of Food and Beverage: Andy Kao
Equipment Distributors: Action Sales, Los Angeles; Richfield, Los Angeles

Facts of Note
Ownership: Founders Andrew and Peggy Cherng, and employees
Opened: 1973 (Panda Inn, 5 units currently exist); 1983 (Panda Express)
Headquarters: Rosemead, Calif.
Units: More than 800, mostly company-owned (no franchisees), in 36 states, Puerto Rico and Japan; plans for 175 locations in 2006. A partnership with Aramark allows the company to license Panda Express.
Size: 500-square-feet to 1,200-square-feet in malls, food courts and airports; 2,000-square-feet in end caps and strip malls; 2,500-square-feet in freestanding locations typically built on 35,000-square-foot lots.
Seats: 45, avg.
Average Check: $9
Total Annual Sales: $800 million
Transactions: 600/unit, avg.
Hours: 10 a.m. - 9 p.m.
Menu Specialties: Northern Chinese-style pot stickers, spring rolls, Cousin Thai’s Spicy chicken breast, pork ribs in black-bean sauce, Kung Pao cashew chicken breast, Mandarin chicken, orange-flavored chicken, beef with broccoli, sweet and sour pork, mixed vegetables and rice. Sushi is offered at some locations.
Staff: 15-18 avg.
Equipment Investment: $300,000 for freestanding; $250,000 for end caps; $10,000 for small units

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