The Tao of Panda Express

The Chinese food chain’s success story—how a single outlet in the Glendale Galleria grew to 1,800 locations worldwide—begins with one secret ingredient: owners who care
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“When I first worked at Panda, I just looked at it as a job and wasn’t really thinking to grow with the company,” Pelagio says. “But Panda is about how people can have a better life, and I can feel now that I am a living product of that.”

The fast-food business has never been known for this kind of investment in entry-level employees; recently, in fact, it’s been known mostly for the opposite. Since the 2008 recession, the response to declining sales, higher health care costs, and agitation for better pay has been to thin out the workforce and invest in automation technology to make even more reductions in the near future. Wall Street typically applauds belt tightening, but Bonnie Riggs—who, as senior restaurant analyst for the NPD Group, conducts market research on behalf of McDonald’s and other major corporate players—believes there may be a long-term cost. “With the recession the industry cut back on hiring staff, and service has suffered,” Riggs says. “Some concepts have suffered for it because service is part of what consumers consider value. If there are happy employees, and the customer knows they’re happy and treated well, then they’re going to come back. The only way to grow a business in this marketplace today is to build loyalty and to have repeat business. And I would suggest that Panda Express probably has some very loyal customers.”

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Andrea Cherng was four years old when Panda Express debuted at the Glendale Galleria. By the time she was a teenager, the company was opening dozens of new locations a year. Andrew and Peggy made it clear to their daughter and her two younger sisters that such precipitous growth meant an ever-growing list of dependents the whole family was responsible for. “At dinner or the breakfast table,” Andrea recalls, “my parents would ask me, ‘What are you going to do for our people?’ far before I could do anything for our people.”

Andrea took that to heart, though she didn’t come to Panda right away. With her law degree from Duke and her M.B.A. from Wharton, she worked elsewhere in the private sector before joining her parents’ company in her midthirties. Of the Cherngs’ kids, only Andrea has embraced Panda as a career (Nicole is a real estate investor, and Michelle is a teacher). As part of her brief, Andrea oversees the Panda Express Innovation Kitchen, a restaurant in Pasadena where Panda tries out new recipes and ideas for improving its decor and ambience. At its grand opening last year, the emphasis was on build-your-own Asian-style wraps, a Chinese-food iteration of the kind of customized burrito that has proved popular at Chipotle Mexican Grill. A plush tea and boba bar/lounge is being piloted there.

“The Innovation Kitchen is like a concept car,” Andrea says. “The products there can be replicated throughout the entire system three to five years out.” Ever since Panda Express expanded to Hawaii in 1987, for example, the Cherng family’s annual vacation to the Islands has been a working one. Two new tea bars have recently opened at Panda locations in Honolulu. “To introduce Asian-inspired teas to a much wider population is incredibly exciting,” Andrea says, noting that while in Hawaii recently she studied the varying configurations of the two bars and discussed “how to provide better support in terms of point-of-purchase and evolve the experience.” Given how busy she was at work, she never made it to the shoreline. “I saw the ocean,” she says, grinning. “It was beautiful.”

Despite the sense of obligation she was raised with, Andrea says she does not assume she will one day follow in her mother and father’s footsteps. “Ownership might be inherited,” she says, “but leadership is not. I wouldn’t have taken the role I have now, and Andrew and Peggy quite frankly wouldn’t have me take that role unless I was the best person for the job at this time. And when I’m not the best person for this job, I hope I will have the wisdom to exit and find my next opportunity.”

Recently Andrea and her father had nearly finished a visit to a Panda Express in La Cañada Flintridge when they noticed an exhausted-looking day laborer who had just pushed his debilitated truck (it appeared to have a broken axle) into a nearby parking space. “So Andrew asks, ‘Where’s Triple A?’, ” Andrea remembers. “ ‘We need to get Triple A to help that man.’ ” One of the assistant managers spoke to the man in Spanish and reassured him that a tow truck was on the way. With the others out of earshot, Andrew acknowledged that there was only so much he could do. “Sort of quietly and on the side, he said, ‘I wish that everybody worked at Panda,’ ” his daughter recalls, “ ‘because if everybody worked for Panda, than everybody could afford a nice car.’ ”

It’s clear that “our Panda family”—even when invoked by Panda’s chief marketing officer—is far from just another marketing slogan. Given that, the question of succession seems crucial to the company’s future. What would happen if a business so predicated on filial ties suddenly had at its head a professional manager for whom “family” was more of a talking point than a belief system? Would the floors still be kept as immaculate? Would the vegetables always be fresh; the meat, always tender? Would the servers smile as broadly when a hungry father and son walk through the doors?

A couple of years ago we gave Isaac’s log cabin to a neighbor, but it was missing the cordless phone on which Isaac had “ordered” his first to-go meal. I found it a few weeks later and kept it. Today my son is ten and much more interested in iPhones than toy phones. Still, his excitement when he enters a Panda Express and elbows his way toward the warming trays is undiminished. There the Cherngs have created a working environment so much kinder than most. In a world too often marked by a paucity of middle-class jobs, a dearth of opportunity, and a lingering threat of being replaced by someone somewhere in the world who can do your job for less, the Cherngs have kept their alternative reality alive. I like the idea that the grown-up Isaac might someday be able to dial up one of their restaurants, exclaim, “Hello, Panda?,” and hear an unfailingly cheerful voice on the other end.


Ed Leibowitz is a writer-at-large for Los Angeles. He profiled transgender helicopter pilot Zoey Tur in the January issue.

 

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