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How Much Does It Cost to Open Panda Express Franchise?

Do you want to start a restaurant business by buying Panda Express franchise? If YES, here is how much it cost to open a Panda Express franchise.

Panda Express is a wildly successful chain of restaurants, and can be easily the most dominant chain of Chinese-food restaurants in the U.S. With over 2,200 locations, it is the largest Asian segment restaurant chain in the United States, where it opened its first location.

How Much It Cost to Open a Panda Express Franchise

Panda Express is a huge restaurant chain, so it is expected that their franchise cost would be just as hefty. One notable thing about this company is that they do not offer franchise to just about anybody. You must have to literally come from the family tree.

What this means that if you would want to own a Panda Express Franchise, you will have to work with them first to have a first-hand knowledge of the business and the company. So they only offer franchise to their former staff. So, if you think your chances are bright regarding snagging a Panda Express franchise, and you are wondering what this franchise would cost you, here is a breakdown of the franchise cost of the company.

  • Franchise fee: 

Panda Express has a franchise fee of up to $25,000, with a total initial investment range of $370,700 to $1,552,600.

  • Initial License Fee: 

Their licensing fee stands at $25,000, and this fee is non-refundable by any means.

Lease of Premises (Initial 3 Months’ Rent):  

The rent estimates for this company is lumped as three months’ rent, and the range is based on various Restaurant venues throughout the country, but it can usually come between $10,000 to $425,000.

Rent expenses vary, and the low-high range given is based on location, square footage, age and condition of the structure, lease arrangements, and other factors and could differ materially from area to area. In particular, rent in airports may be significantly higher than in other venues, and this accounts for the high end given in the chart.

The typical Panda Express Restaurant in a captive venue will be approximately 500 to 1,500 square feet, although a few units occupy approximately 3,000 square feet. In a food court, CAM typically amounts to 35% to 50% of minimum rent. A pro-rated charge for taxes, insurance, and utilities also applies.

  • Furniture and office supplies: 

The fee for furniture and office supplies in this restaurant can be between $90,000 and $200,000. You will also need to put into consideration the equipment that you will require to run your outlet. These include steam counters, refrigerators, grills and a whole lot more. Panda Express usually recommends the brands of equipment for its franchisees.

  • Initial Inventory: 

Your initial inventory will be purchased from designated or approved third party product suppliers and that can cost you between $2,200 and $3,600. Initial inventory includes various food products, certain proprietary spice mixes, seasonings, flavorings, menu items, sauces and marinades, beverages, paper products, cleaning supplies, and miscellaneous items used in the operation of the Restaurant.

The initial inventory expenditure will vary, and the low-high range given was factored according to varying anticipated sales volume and current market prices for supplies.

  • Computer Hardware and Software:

Part of the cost of owning a Panda Express franchise will be the purchase of Computer Hardwares and softwares. You will be expending an estimate of about $4,000 to $17,000 on computer hardwares and softwares.

  • Training Expenses:

When you make an initial License fee to Panda Express, this covers the initial training program that will be offered to you and your staff at a unit location. Every other cost associated with training for you and your staff attending the training program, which may include travels, feeding and every other additional expense will be borne by you. The fee is usually $13,000 to $30,000, depending on how far you and your management have to travel to get to the initial training program.

  • Architectural Fees:

You should be looking into something between $17000 to $35,000 for the architectural and design fee of your selected location.

  • Licenses and Permits:  

You are solely responsible for identifying and complying with all applicable laws, regulations, and ordinances. All these can cost you from $1,500 to $30,000

  • Miscellaneous Funds:  

This category includes security deposits, utility costs, and other miscellaneous expenses to begin operations and other financial requirements. You could need more Miscellaneous Funds, because they vary with the size of the business (staff, anticipated volume of business, etc.) you operate. You need to keep around $10,000 for that.

  • Insurance (annually):

For insurance, you may need from $21,000 to $65,000 depending on local regulations and the likelihood of specific natural disasters.

  • Taxes:

Your taxes may typically be from $4.5k to 10k, but this depends on your expected daily volume.

  • 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.

  • Total cost:

In all, you should be looking at close to $380,000 to $1,600,000 as the startup cost of a Panda Express Franchise

Steps on How to Get a Panda Express Franchise

There’s only one qualification Panda Express asks of a franchisee — that you become an employee. With this they can listen to you. For now, there is no information available on how to open a Panda Express franchise. If you typically want to open a Panda Express franchise, you should get a job there, and you should aim at working your way to the top.

What You Must Know About Panda Express

Panda express was founded by Andrew Cherng, Peggy Cherng and Andrew’s father, Master Chef Ming Tsai Cherng. Andrew Cherng and his father are from the Yangzhou region of China’s Jiangsu province, while Peggy was born in Burma and raised in Hong Kong.

The business turned from an idea into reality when Andrew Cherng migrated to the United States in pursuit of the American dream. With a huge heart and just a little amount of money with him, he alongside his father started the first Panda Inn.

Panda Express restaurants offer a variety of Chinese-cuisine-inspired dishes like the Orange Chicken; Sweet Fire Chicken Breast; Beijing Beef; Grilled Teriyaki Chicken; Kung Pao Chicken, etc. Combo meals are also served at the restaurant with customer’s choice of either fried rice, steamed rice, chow mein, or super greens.

The restaurant introduced the sweet flavours of Szechuin and Mandarin meals to the people of Southern California and that became the standard for most of the Panda Restaurants in different parts of the world today.

Panda Express is reputed to have had more technological advantage than most other restaurants in the same grade. This is because its founder had a background software design and engineering. In the 80’s, the company adopted a store ordering system using computers and this makes it easier for them to collate data about items that sell the most in their stores.

Panda Express is considered to be the most successful chain of Chinese food restaurants across the United States. Their brand is so massive that they had once been in discussions to purchase P.F Changs. They were also rumored to be the first restaurant that used the POS technology then.

As of the 2018 Franchise Disclosure Document, there are 108 franchised Panda Express locations in the USA. The company still remains family owned until today, though they offer a very strict franchise option for those that want their own Panda Express restaurant.