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Wondering how much a Panda Express franchise cost? That is precisely what you will learn from this post.
You’re also going to learn:
- What is Panda Express?
- Is Panda Express a franchise?
- Who owns Panda Express?
- How to open a Panda Express franchise in 2020?
- And lots more…
Specifically, we’ll guide you step by step on what and what you should expect when starting up a Panda Express franchise.
Let’s get started.
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What is Panda Express? (Brief History)
Panda Express is an American fast food restaurant chain that serves majorly American Chinese cuisines… And just like every other business cuisines, they were looking to bring something different to the table.
The company came into existence in 1973 when Andrew Cherng and his father Ming Tsai Cherng who was a master chef started the business in California, United States.
Just like every other start-up business, Panda Express didn’t hit the ground running, they experienced
some downtime which led to Andrew Cherng offering freebies so he would be able to get customers to dine at the restaurant (Panda Inn).
In 1983, the Cherngs were invited by Donahue Schreiber (a real estate manager) who proposed that they
open a fast food outlet of Panda Inn for the Galleria’s (Real estate) food court and so, Panda Express was
Currently, the company has over 2,200 outlets worldwide.
Although Panda Express can be said to have become a successful business venture, which will seem logical for people to purchase one of its franchise stores -which brings us to the big question…
Is Panda Express a Franchise?
Unfortunately, Panda Express is not a franchise!
The company has chosen to stay corporately owned which voids any opportunity of it being franchised. Panda Express is more of a corporation that consists of Panda Inn, Hibachisan, and Panda Express.
The company has decided to shun all opportunities to expand the business further or to sell its shares to the public. They have chosen to solely own and operate their restaurants in a way to preserve their family’s traditions and values.
But still, Panda Express is considered to be one of the most successful chains of Chinese food restaurants across the United States. They are said to be one of the firsts that adopted technologies before other fast food companies followed suit.
The corporation is currently owned by the two loving couples – Andrew and Peggy Cherng who together have been able to grow the company to over $3 billion in fortune; selling more than 90 million pounds of orange chicken each year, and running more than 2,000 restaurants worldwide.
How to Open a Panda Express Franchise
As previously stated, Panda Express is not a franchise, so the idea of owning a franchise is non-existent as the Cherngs have decided that the corporation will remain in their care for now.
But if you’re still looking at getting affiliated with the corporation, they actually offer store outlets to only to their previous employees or workers.
This simply means that if you want to do business with Panda Express, you’d have worked with them before, which gives you a better understanding of its mode of operation.
How Much Does a Panda Express Franchise Cost?
In a hypothetical situation, it will not be a smooth ride getting a franchise with Panda Express since the corporation only offers outlets to its previous employees.
But here’s a detailed estimate of how much it would cost to start up a Panda Express store outlet (as stated by Franchisechatter.com):
Initial Panda Express License Fee ($25,000)
It’s important to note that this Panda Express license fee is non-refundable.
This initial Panda Express license fee also covers an initial training program. But you should note that all other costs related to your training programs such as travel fees, accommodation, and other expenses are your sole responsibility.
Initial 3 Month’s Rent Fee (Panda Express Lease of Premises Cost – $10,000 to $425,000)
This initial rent rate is based on various store outlets venues throughout the country.
The rent cost also varies based on lease arrangements, square footage, area to area, age and condition of the structure, and other factors.
A Panda Express rent cost may be higher in airports than other locations since this accounts for the high returns you’d be getting from such location.
A typical Panda Express restaurant in a priced location is approximately 500 by 1500 square feet, although some store units may occupy up to 3000 square feet.
Other charges you may incur in securing your Panda Express restaurant include taxes and utilities, insurance cost, and Common Area Maintenance (CAM) charge as imposed by the store outlet.
Panda Express Leasehold Improvement Fee ($80,000 to $500,000)
Panda Express is very strict on you maintaining it’s design standards and construction process. The cost of construction of a Panda Express restaurant based on their required standards depends on the size, condition, and location of the restaurant – and also the cost of labor.
The above-stated range of figures is the cost of renovation or leasehold improvements. This fee can be reduced if the lessor allows for a construction allowance to lease.
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Equipment, Fixtures, Furniture and Supplies Cost ($90,000 to $220,000)
The major equipment needed for the restaurant of a Panda Express restaurant includes grills, steam counters, refrigerators, etc.
The cost of these equipment depends on available financing terms, the size of your Panda Express restaurant, the brands you are purchasing them from, etc.
You can actually get an equipment loan to help you finance the purchase of such equipment.
Initial Panda Express Inventory Cost ($2,200 to $10,000)
Most Panda Express initial inventories are purchased from designated or approved third party product suppliers, some of which include: seasonings, menu items, certain spice mixes, sauces and marinades, various food products, paper products, cleaning supplies, beverages, and other items that are used in the daily operation of the restaurant.
Read Also: The Full Cost of Opening a Subway
Computer Hardware and General Operating System Cost ($14,000 to $21,000)
Panda Express estimates that it will cost between the range of $12,000 to $17,000 to purchase the computer hardware needed to get started, and between $2,000 to $4,000 to purchase the software.
These costs though depend on the manufacturers, its operating features, whether the equipment is used or brand new, whether you are purchasing or leasing the equipment.
Panda Express Employees Salary Cost ($22,894 to $96,598 yearly)
As a Panda Express owner, you also have to stick with their payment terms for employees under you.
According to Payscale.com, the average Panda Express employee salary is $47,026 yearly. This salary spreads across employees with the job title:
- Restaurant General Manager – ($33,000 to $67,000)
- Chief Operating Officer (COO) – ($75,000 to $175,000)
- Cook Supervisor – ($20,000 to $51,000)
Panda Express Annual Insurance Premium Fee ($30,000 to $75,000)
It’s important to maintain at all times insurance policies that cover risks issued by carriers which Panda Express approves.
The corporation specifically states the types and amounts of coverage that are required under these policies and may require commercially reasonable adjustments.
N.B: Panda Express insurance policies are underwritten by insurers rates ‘A’, or better still – A.M. Best Company.
Some other Panda Express franchise cost include:
- Sales tax deposits ($4,500 to $10,000)
- Construction supervision cost ($17,000 to $50,000)
- Architectural design fees ($17,000 to $35,000)
- Non-resettable cash register(s) fee ($6,000 to $8,000)
On average, it costs a total of $377,100 to $1,599,000 to own a Panda Express restaurant in 2020.
The corporation implemented this pilot program on a limited basis under which a licensee’s unit location may be free-standing, have a larger footprint, or developed with a drive-thru feature, rather than a typical licensed captive type of restaurant location.
By choosing to be an affiliate for the corporation, you are solely responsible for identifying and complying with all its applicable laws, regulations, and ordinances.
And all Panda Express franchise costs paid to the company are non-refundable, except otherwise stated. Also, fees paid to vendors and suppliers are only refunded according to arrangements made.
It’s also important to note that these Panda Express fees vary widely, depending on whether or not your chosen restaurant is new or an already existing one, as well as the condition of the property, its current geographical location, and its size.
And finally, if you are purchasing an already existing Panda Express restaurant via (PEI – Panda Express Inc.) the cost of its assets and other acquisition terms will be negotiated between you and the company.
Panda Express Franchise Alternatives
Although Panda Express is not a franchise, there are other businesses that offer sales of their franchise.
- McDonald’s – $45,000
- 7-Eleven – $10,000
- Dunkin Donuts – $640,000
- Taco Bell – $25,000
These are all reputable companies you could look into if you’re looking to buy a franchise in 2020.
Generally, purchasing/owning a franchise gives you a higher advantage than most start-up businesses. It offers
independence with the support of a big business network.
You also don’t necessarily need a business experience to run a franchise since you’re already covered by your franchisor.
Running a business franchise will also give you a higher success rate than other regular start-up businesses – This is because franchises already have an already established reputation and image, which it gives you leverage, unlike start-up businesses.
Starting a franchise also has its disadvantages…
There are lots of restrictions on where you can operate, products to sell and buy, and many others.
Also, profits are shared with your franchisor, so, there isn’t a 100% financial liberation.