Chinese fast-food chain Panda Express thrives on orange chicken

Panda Express, chinese food, fast food, Cherng
Gina Ferazzi / Los Angeles Times
Kristy Marrow, a sales representative for a tool company, at a Panda Express in Azusa. She says she eats at the chain about once a week.
Now celebrating its 25th year, it’s one of the largest family-owned fast-food chains in the U.S.
By Jerry Hirsch, Los Angeles Times Staff Writer
August 13, 2008
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.

Cherng said those early days, when hours could go by without a patron, taught him why customers are king, a lesson he has kept close as he built the business.

“I became very attentive to customers because I was desperate not to have people leave and never come back,” Cherng said.

More than three decades later, Cherng’s challenge is how to instill that desperate fear that there will be no customers in the more than 17,000 workers dishing out food at stores in 36 states.

Like an itinerant preacher, he travels from store to store teaching his managers a customer-service gospel built on three principles: Be proactive, be respectful and do a job well. Employees start at least 50 cents above the minimum wage, and 70% of all management positions go to workers already at the company. The results are unmistakable, said Bob Sandelman, a restaurant industry consultant in San Clemente.

Panda Express scores well in the brand studies conducted by his consulting company. More than 90% of fast-food consumers in the Los Angeles area are aware of Panda Express and 70% have eaten there, Sandelman said. The chain provides a good variety of Asian food at a decent price, Sandelman said. Consumers have a perception that the food is healthy and fresh, he added.

But like other fast-food chains, Panda Express has its share of salt- and fat-laden entrees. The 5.5-ounce serving of its orange chicken, for example, has 500 calories, 27 grams of fat and 810 milligrams of sodium. The 5-ounce portion of Beijing beef contains 420 calories, 26 grams of fat and 730 milligrams of sodium. A McDonald’s Big Mac, by comparison, has 540 calories, 29 grams of fat and 1,040 milligrams of sodium.

Customers in California, Nevada and Arizona account for 70% of the chain’s sales. Its highest-volume store is in Hawaii. Sales in North Carolina and Georgia don’t do as well.

“The closer we get to China the better we do,” Cherng said.

Kristy Marrow, a sales representative for a tool company, eats at a Panda Express about once a week.

“It is always fresh, and it is healthy. There are lots of vegetables that are good for you,” Marrow said, after ordering lunch at the Azusa store.

Steve Wallace, a printer for the Azusa Unified School District, agreed.

“I like the spices and seasonings. The food has real flavor,” said Wallace, who said he preferred Panda to other independent Chinese eateries.

Cherng has resisted the temptation to cash out on his success by selling shares to the public or signing franchise deals. Although a public offering might reap him hundreds of millions of dollars, he’s not sure what the purpose would be.

“What would I do with the money? Would I open more stores? I don’t have money issues, so why do it?” Cherng said, adding that he didn’t want the expense or headache of dealing with shareholders.

Similarly, he sees no advantage to speeding growth by selling franchise rights as do most other fast-food chains. “I think we can run our stores better than someone else,” he said.

A native of Jiangsu province in China, Cherng came to the U.S. in 1966 to study mathematics at Baker University in Baldwin, Kan. He lives in the San Gabriel Valley and has three adult daughters.

Cherng is a supporter of children’s organizations and disaster relief efforts. This year Panda matched employee contributions and tossed in additional funds from a three-item combo promotion to raise $1.3 million for Chinese earthquake relief.

Even though his company has grown far beyond his expectations, Cherng still manages with an eye for detail. While visiting the new Panda Express in Azusa on Friday, Cherng scraped chewing gum off the sidewalk.

Associates say he looks askance at anyone wasting napkins and utensils. He interviews everyone who applies to work at the company’s headquarters, whether the person is applying for a clerical post or to become chief financial officer.

The idea for a fast-food restaurant came when the developer of the Glendale Galleria had eaten at the Panda Inn and invited Cherng to take a look at the under-construction mall and consider opening a quick-serve restaurant in it.

Cherng wasn’t much of a mall rat and at the time wasn’t even aware of food courts in malls. But he thought a version of his Panda Inn, using a steam table to offer a narrow selection of Chinese dishes that were popular lunch items, might work. The first Panda Express opened in 1983.

A second store opened at Westside Pavilion in Los Angeles in 1985, and Cherng was impressed with the profits, he said. “I became addicted to malls.”

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Smokin’ athletes! Who says cigarettes and sports don’t mix?

ONE OF the biggest secrets of the fitness world has nothing to do with supplements, steroids or spandex. It is the almost implausible combination of exercise and smoking.

There are people, it seems, who do both. We’re not talking about mall walkers who light up once a week. These are men and women who compete in marathons and triathlons and go hiking and train at the gym — who also have a pretty steady cigarette habit.

 
In a recent online poll sponsored by Runner’s World magazine, 2% of the 2,500 people who responded said they smoked, unbeknownst to their running friends. About 4% said they smoked but that their running buddies were in the know.

Bart Yasso has seen his share of smokers in the more than 1,000 races he’s completed. The chief running officer of Runner’s World magazine and author of “My Life on the Run” says some runners light up before and after races. He even has a few friends who run and smoke.

“They’re very secretive about it,” he says. “They don’t want anyone to know, and I know they’re not proud of it. These are people you never would have guessed were smokers. I encourage them to quit. It’s that addictive element — I understand where they’re coming from.” Yasso was once a smoker himself, but quit years ago when he started running.

Smoking has something of a place in the world of endurance sports. The Pikes Peak Marathon in Colorado began as a challenge in 1956 from a nonsmoking doctor, Arne Suominen, to any smokers who thought they could beat him to the top of the peak and back down. A nonsmoker won, and the three smokers who ran never finished the race.

A smoker did beat Suominen to the top, but decided to smoke a cigarette instead of heading back.

The smokers profiled here are divided on how they ultimately see their habit, with some defiant and others wrestling with how and when they should try to quit. But for now, smoking and exercise continue to run in sync.

‘Dark Knight’ Christian Bale’s lady sidekick: Sibi Bale

Christianbale_sibibale_theprestige0

Like the Dark Knight/Bruce Wayne, Christian Bale is a real-life man of mystery. Averse to personal publicity, he is well-known for not wanting to discuss his private life.

“I like my privacy, and I don’t like answering personal questions, he once told the Telegraph.

With this week’s report of assault charges, filed against Bale by his mother and sister, that may not work. Now everyone wants to talk to Bale about a personal incident that has become water-cooler chatter. And revelations surfacing Wednesday that the family row may have been over something said to his wife has also put the media focus on her.

So who is Sibi Bale? Standing, usually smiling, next to Bale — always in a simple and classic black ensemble — the tall, brunette beauty with long, center-parted hair, is herself a bit of a cipher. Like Katie Holmes and Tom Cruise (in their early days), Sibi is a lovely arm-piece for Bale at all his premieres and personal appearances.

Here’s what we know about Sibi.

Christianbale_sibibale_reignoffire2

Her real name is Sharon Blazic, and she’s a Chicago-born indie film producer, former make-up artist and model who worked as an assistant to Bale’s pal Winona Ryder. She’s listed as Ryder’s assistant in her IMDb.com credits on “Girl, Interrupted.”

She met Christian at one of Winona’s barbecues during the making of “Little Women” in 2000.

Christianbale_sibibale_sundancemach From then on, Sibi, now 38, traveled with Christian to film locations, premieres (like “The Prestige” in 2002, above) and the 2004 Sundance Film Festival, in photo at left.

The couple had a daughter in 2005, the same year his father, David Bale, died of a brain cancer.

When Sibi was pregnant, the couple was mum on the impending birth and  has remained low-key. One of the few times Bale spoke about being a dad was to USA Weekend, saying simply, “It’s the best thing that’s ever happened to me.”

It’s hard to realize that Bale wasn’t always a highly paid actor. Just a few years ago, he and Sibi had financial difficulties that Bale has only recently spoken about. In 2003, he wasn’t making enough money to support his family and faced a house repossession.

He told Details, “I don’t believe that there’s an actor alive who hasn’t been in that position — and in that position many years after people recognize you and have a very wrong impression of what they imagine your life to be like.”

And he also admitted he took roles to get out of debt. “I won’t tell what [movie] it was, but it was following closely on the heels of [the repossession]. It ended up that I found a great many experiences from it, but the motivation was completely keeping the h

Google and Yahoo Defend Ad Alliance at a Hearing

 

Published: July 16, 2008

WASHINGTON

GOOGLE and Yahoo lawyers defended their recent decision to partner on advertising Tuesday at a Congressional hearing, arguing that the arrangement did not violate antitrust laws and would help to keep Yahoo competitive.

Their arguments were countered by Microsoft officials who argued that the partnership would allow Google and Yahoo to dominate more than 90 percent of the search advertising market and could significantly raise prices.

“I never felt so sorry for poor little old Microsoft,” said Representative John Conyers Jr., chairman of the House Judiciary Committee, to laughter.

In a statement, Bradford L. Smith, senior vice president and general counsel of Microsoft, said: “If search is the gateway to the Internet, and most believe that it is, this deal will put Google in a position to own that gateway and the information that flows through it. When Yahoo talks about this deal generating up to $800 million in additional revenue, that’s money out of the pockets of American businesses, big and small, who will pay higher prices for the very same ads they buy from Yahoo today.”

Earlier in the morning, gasps were heard throughout the hearing room when Mr. Smith testified under oath about a meeting on June 8 with Yahoo’s chief executive, Jerry Yang, in San Jose, Calif.

“Jerry Yang looked across the table, looked us in the eye and said: ‘Look, the search market today is basically a bipolar market. On one pole there’s Google, and on the other pole there is Yahoo and Microsoft both competing with Google,’ ” Mr. Smith said.

“He said, ‘If we do this deal with Google, Yahoo will become part of Google’s pole.’ And Microsoft, he said, would not be strong enough in this market to remain a pole of its own,” Mr. Smith continued.

Michael J. Callahan, executive vice president and general counsel for Yahoo, said, “I am not going to address Mr. Smith’s characterization of Mr. Yang’s statement.” He later said that he was at the same meeting but did not recall the conversation the way Mr. Smith did.

In written testimony Mr. Callahan said Microsoft had turned to Carl C. Icahn, the activist investor, to force a “fire sale” of Yahoo.

“Our priority is to build value for stockholders,” Mr. Callahan said. “What we will not do, however, is allow our business to be dismantled or sold off piecemeal on terms that would be disadvantageous to Yahoo stockholders and to the market as a whole.”

Mr. Callahan also said that the agreement did not affect “algorithmic” search results, maintaining that they would remain entirely Yahoo’s.

Senator Patrick J. Leahy, chairman of the Senate Judiciary Committee, said the business plan “raises the specter that one company will accumulate vast amounts of personal viewing data.”

Mr. Smith echoed that concern, arguing that Google would have a complete picture of Internet users’ online activities. “If that happens, Congress won’t need to enact a federal privacy policy,” he said. “We will already have a national privacy policy — Google’s privacy policy.”

David C. Drummond, senior vice president and chief legal officer for Google, fired back at Microsoft, saying it was not known for being a “mom and pop shop.”

“Microsoft has a long history of abusing and extending its dominant positions through anticompetitive practices,” he said in a statement. “For years, Microsoft has been working to leverage that lock-in onto the freer and more open world of the Internet.”

Senator Herb Kohl, Democrat of Wisconsin, said that more information would be needed to reach a conclusion about the deal.

“The history of the development of the computer industry gives us reason to be cautious as we evaluate this deal,” Mr. Kohl said. “A decade ago, today’s witness, Microsoft, came dangerously close to quashing competition throughout the high-tech economy. We’re pleased that Microsoft has reformed its business practices.”

3-D Movie in the Top 5 at Weekend Box Office

 

Published: July 14, 2008

LOS ANGELES — “Journey to the Center of the Earth” — promoted as the first live-action feature shot in a new digital 3-D process — sold a modest $20.6 million in tickets at North American theaters over the weekend, placing third among the five highest-grossing films for the period.

During a weekend of intense competition that included “Hellboy II” reaching No. 1 and an Eddie Murphy film that couldn’t crack the top five, the estimated total for “Journey” was diminished by a shortage of movie theaters capable of screening the movie in its intended 3-D format. The producers had hoped there would be a minimum of about 1,400 auditoriums with the technology. But theater owners have moved more slowly than expected to install the expensive system. By Friday, when “Journey to the Center of the Earth” opened, there were only 954 screens.

As a result, New Line, the recently slimmed-down branch of Time Warner that released the $54 million picture, had to scramble to tweak the marketing for the film — going so far as to drop “3D” from the title — and implement a standard two-dimensional release in tandem. That may have confused moviegoers.

Still, there were hints buried deeper in the box-office returns suggesting that 3-D is well on its way to becoming a force at multiplexes. Auditoriums screening the movie in 3-D sold more than three times as many tickets as those showing the standard version. About 57 percent of the total gross for “Journey to the Center of the Earth,” based on the classic Jules Verne tale, came from 3-D screenings.

In comparison, 3-D screenings of “Beowulf,” the computer-generated picture that opened last November, generated just 28 percent of its opening-weekend gross. (“Beowulf” was available in 3-D on slightly fewer screens.)

Michael V. Lewis, the chairman of RealD, the company behind the technology used in the film, said he was “ecstatic” about the public’s response. “This demonstrates the power of 3-D and we are going to continue to roll out the technology on a global scale as quickly as possible,” he said.

Elsewhere at the multiplex, “Hellboy II: Golden Army,” starring a comic-book demon and released by Universal Pictures, opened in the No. 1 slot, selling about $35.9 million in tickets, according to Media by Numbers, a box-office tracking company.

The opening for this $85 million movie significantly outperformed its 2004 predecessor, creating a potential franchise for Universal. Its success is a validation for the studio, which chose to continue with the character after Sony Pictures, which distributed the first movie, passed.

“Hancock,” starring Will Smith as a misanthropic superhero, was a close No. 2 with an estimated $33 million in sales. This Sony title, which cost about $150 million to produce, excluding marketing costs, has sold about $165 million in tickets in North America during its first two weeks in release; the worldwide tally is $345 million.

“Journey to the Center of the Earth,” which stars Brendon Fraser, was followed, in fourth position, by the animated “Wall-E” from the Walt Disney Company ($18.5 million for a new domestic total of $162.8 million). “Wall-E” has not opened on a wide scale internationally.

“Wanted,” a Universal movie starring Angelina Jolie as a superhero assassin, rounded out the Top 5 ($11.6 million for a new domestic total of $112 million and a worldwide $176 million). Notable for a dismal opening over the weekend was the most recent offering from Eddie Murphy, “Meet Dave,” which cost about $60 million to produce and is distributed by 20th Century Fox; it sold about $5.3 million in tickets, only enough for seventh place.

Online businesses take a page from the old media’s playbook

James Gilden, The Internet Traveler
November 12, 2006
IN the last 10 years, travelers have witnessed nothing short of a revolution in how they research and plan their travel. Not long ago, travelers relied primarily on printed media for information. They searched guidebooks, magazines, brochures and newspapers for reviews, recommendations and inspiration.

Today, most travelers say they get this information online. Websites such as TripAdvisor and VirtualTourist.com, which provide user reviews of hotels, restaurants and destinations — user-generated content, as opposed to professionally written — claim millions of visitors.

Now two successful travel websites — bargain-hunting website ShermansTravel.com and VirtualTourist.com — are doing what seems retro in this ever-so-wired industry: They are launching printed-on-paper travel publications.

Last month, ShermansTravel was first out, publishing the first issue of Sherman’s Travel magazine, a quarterly glossy aimed at sophisticated, value-conscious travelers.

In a sign of how quickly an online business based on a good idea can grow, ShermansTravel, founded just four years ago, has built a large audience among travelers looking for travel bargains and values. Its weekly Sherman’s Top 25 travel deals e-newsletter now claims 3.5 million subscribers.

The company saw a niche in the crowded market for printed travel magazines that it thought was unfilled.

“There is a real need for a magazine that focuses on smart luxury values,” said James Sherman, founder and chief executive of Sherman’s Travel Media. “We recognize that while there are budget travel-related magazines, there’s nothing for the more upscale traveler who’s looking for value.”

And unlike online media, a magazine format allows for big, pretty photographs.

“A magazine is a perfect vehicle for inspiring travelers,” Sherman said. “The Internet is more passively thinking about travel or browsing travel opportunities.” The magazine sends readers to its own and other websites for more information, just as the website works as a marketing vehicle for the magazine.

For now, the magazine is available only by subscription. Subscribers are being generated by sending marketing messages to the Sherman’s Top 25 e-mail list and through postings on the website. It is expected to be available at newsstands early next year.

The magazine is written by staff and freelance writers, though it integrates some user-generated content.

That is in sharp contrast to the route VirtualTourist.com has taken creating its print product.

VirtualTourist.com has been around for six years and has more than 780,000 members who contribute content. It has accumulated 1.2 million travel tips and recommendations on more than 27,000 destinations, making it one of the largest of such sites.

The site has been modeled from the start after a traditional printed guidebook. The chief differences are that the content is all contributed by average travelers and not professional writers and it is, obviously, online rather printed. That is changing.

This spring the company is launching its first VirtualTourist Travel Guides, printed guidebooks composed almost entirely of user-generated content.

“We have really mastered the online user generated content,” said J.R. Johnson, founder and president of VirtualTourist. “Now we want to go after what we had originally wanted to do and create an offline guidebook.”

Using the site’s rating system for reviews as a starting place, a team of professional travel editors selects the best reviews of destinations, hotels, restaurants and things to do and assembles them into a printed guidebook. The first five guidebooks will be on London, Paris, Montreal, San Francisco and Rome.

“If you look at maybe 800 reviews written about the Eiffel Tower, they pick out three or four to include in the book,” Johnson said. “It’s a massive amount of content [on the website]. A lot of it is great and a lot of it is not so good.”

Editors will do little to the selected content other than correct for punctuation and spelling. They will verify information such as addresses and pricing on hotels, though that is subject to change, depending on season and any specials on offer. Otherwise, the writer’s voice is allowed to come through unfiltered, even if the English is imperfect. For Johnson, this is one of the strengths of the guidebook, adding to its authenticity.

“Some guy who lives in Paris — and his English is a little broken, might not be written in the king’s English — that really adds to the content if it comes through in the author’s voice,” he said.

For each volume there are about 300 contributors whose only compensation is a byline and maybe a picture at the front of the book. Readers who find a writer whose travel sensibility matches their own can reference other contributions.

“Being a travel writer is the dream of a lot of people,” Johnson said.

Great. Just what I need is more competition.

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