How Two Chinese Immigrants Built A Billion-Dollar Fast-Food Empire More Successful Than In-N-Out

Panda Express, the beloved fast-casual dining restaurant, was founded by Chinese immigrants who believe treating their employees right is the key to building their now billion dollar empire.

The Chinese-American fast food chain made $2 billion in sales in 2015 — three times that of fast-food burger joint In-N-Out. According to Business Insider, Panda Express has no franchises and operates with 1,800 outlets in the United States, Mexico and Canada.

Panda Express, which is headquartered in Rosemead, California, is solely owned by the same family that founded it back in the 1970’s. That couple, Andrew and Peggy Cherng, who are both 67, have an estimated net worth of $3 billion today.

HUMBLE BEGINNINGS

Andrew’s father, Ming-Tsai, worked at a restaurant in Taiwan after leaving Yangzhou, China in 1947. The family eventually relocated to Yokohama, Japan where his father found work as a chef. Andrew received a scholarship and moved to Kansas where he met his future wife and co-CEO Peggy at Baker University.

Peggy, also a Chinese immigrant, was raised off the mainland in Burma. After Kansas, she transferred to the University of Missouri where she studied computer science and eventually earned her PhD. Andrew moved to Missouri to be reunited with Peggy and earned his master’s in applied mathematics.

GROWING AN EMPIRE

The couple wed after moving to Los Angeles and Andrew later convinced his parents to help him open Panda Inn on Foothill Boulevard in Pasadena in 1973. It was very much a family owned restaurant and business where his mother cooked the rice and Andrew focused on hospitality.

Panda Inn was slow getting off the ground at first and the business struggled initially. The future Panda Express billionaire once had to try to lure people into his restaurant by offering deals such as three entrees for the price of two.

THE FIRST PANDA EXPRESS

In 1983, Andrew opened the first Panda Express in the new food court of Glendale Galleria. Peggy, a computer programmer at McDonnell Douglas at the time, decided to help her husband with the accounting and payroll for his business.

Her technical knowledge allowed her to spearhead Panda Express’s growth by tracking purchasing history and shifts in customer behavior using pattern-recognition software. She said:

“The kitchen area is low tech, but the management system can be high tech-how to catch the data, how to analyze data to see what’s most salable, what’s not selling, and to determine what to offer and what not to offer.

“Andrew’s vision is that he doesn’t see anything that’s not possible. But visionaries need a system and structure to provide the growth.”

A BUSINESS POWER COUPLE

Andrew takes the role of the charismatic leader and motivational CEO while Peggy is the chief technician in charge of operations, the financial tracking system and supply-chain management system. Though they may have differing roles, the couple agree that business is about the people. Peggy said:

“The restaurant business is the people business, and people are our investment. If we want to be loved by guests, we have to focus on food with passion and service with heart, ambience and pride. If that value equation is really good, then guests will come.”

Panda Expresses invests in their employees and the results show. Andrew said:

“Our job is to develop people. When you have a good set of people and they’re in a good place inside and out-in their livelihood and in who they are — then chances are they will take care of the customer better.”

HOW THEY TREAT EMPLOYEES

Panda Express is known for their better quality food and positive treatment of employees. The results are higher pay and better benefits. Panda Express pays $9.50 an hour for starting entry-level positions and about $14 an hour for assistant managers.

Benefits for Panda employees include health care, paid sick leave, paid vacation, 401(k)s and company-subsidized college courses after six months. The company is focused on self-growth and encourage employees to read books like “The 7 Habits of Highly Effective People” by Stephen Covey and “Re-Awaken the Giant Within by Tony Robbins.”

They are also encouraged to join Toastmasters International and enroll in personal-improvement seminars such as Dale Carnegie Training and Landmark Forum.

CARRYING THE TORCH

Of the Cherng’s three daughters, their eldest, Andrea, is the only one to go into the family business. Andrea said of her parents:

“This idea of a purposeful or meaningful life is something that Andrew and Peggy are very dedicated to.”

Andrea holds a law degree from Duke and an M.B.A from University of Pennsylvania’s Wharton School of Business. She gained experience elsewhere in the private sector before she assumed her role at the Panda Restaurant Group with her parents.

Her parents informed her and her sisters at a young age that the whole family were responsible for a number of dependents from the business. She said:

“At dinner or the breakfast table my parents would ask me, ‘What are you going to do for our people?’ far before I could do anything for our people.”

Today, Andrea heads the Panda Express Innovation Kitchen in Pasadena where she tests out new recipes and restaurant decor. She said:

“The Innovation Kitchen is like a concept car. The products there can be replicated throughout the entire system three to five years out.”

Her younger sister Nicole is a real estate investor while her other sister Michelle is a teacher.

Written by NextShark