Andrew Cherng remembers pacing through his Chinese restaurant in Pasadena wondering whether any customers would show. It was a difficult time. He had borrowed from family members and the Small Business Administration to open the eatery and had debts to pay.
"People would stick their heads in and leave," Cherng recalled. His mother went out and sprinkled the sidewalk with salt, a Chinese custom to expel negative energy. It worked.
Thirty-five years later, Cherng, 61, and his wife, Peggy, control one of the largest family-owned fast-food empires in America.
Their 1,100 Panda Express restaurants dominate Chinese fast food and are ubiquitous residents of shopping-mall food courts, airports and sports stadiums across America.
Cherng's Rosemead-based Panda Restaurant Group Inc., which also includes the Panda Inn sit-down restaurants and the small Hibachi-San Japanese Grill chain, is expected to top $1.2 billion in revenue this year.
The company is profitable, Cherng says, and has achieved 12 consecutive years of same-store-sales growth, an important measure of a restaurant company's health.
As it celebrates its 25th anniversary this year, Panda Express has proved itself to be an effective competitor against larger corporate fast-food chains such as McDonald's, KFC and Taco Bell, and thousands of independent rivals.
"There are so many full-service Chinese restaurants that do takeout. That's just an incredible amount of competition for Panda Express," said Darren Tristano, a restaurant industry analyst at Technomic Inc. in Chicago.
It is an empire largely built on the thighs of chickens -- the dark meat.
When other fast-food chains started to offer white-meat chicken nuggets and sandwiches in the late 1980s, Panda Express figured out what to do with the rest of the chicken. And it has paid off.
The chain started using boneless and skinless dark meat cooked in a light flour batter to hold the moisture. Then it drizzled on top an orange sauce that Panda executive chef Andy Kao described as "a little sweet, a little sour and a little spicy."
By 1991, it had become the chain's biggest seller. Now, 4 out of 10 people who walk into Panda Express include orange chicken in their orders. Panda Express sells 45 million pounds of orange chicken annually.
"Orange chicken has a huge following. Using lower-cost thigh meat is a tremendous advantage for them at a time when a lot of quick-serve chains are going to more expensive breast meat," Tristano said.
