← Good Bad Billionaire
Good Bad Billionaire
Peggy Cherng: Engineering a fast-food fortune
00:38:56
How Peggy Cherng used engineering and orange chicken to create a fast-food empire
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- [00:00]
Narrator/Advertiser
This BBC podcast is supported by ads outside the UK. The best B2B marketing gets wasted on the wrong people. So when you want to reach the right professionals, use LinkedIn ads. LinkedIn has grown to a network of over 1 billion professionals, including 130 million decision makers. And that's where it stands apart from other ad buyers. You can target your buyers by job title, industry, company role, seniority skills, company revenue so you can stop wasting budget on the wrong audience. It's why LinkedIn Ads generates the highest B2B return on ad spend of major ad networks. Spend $250 on your first campaign on LinkedIn Ads and get $250 credit for the next one. Just go to LinkedIn.com Broadcast that's LinkedIn.com Broadcast. Terms and conditions apply. This message comes from Schwab At Schwab, how you invest is your choice, not theirs. That's why when it comes to managing your wealth, Schwab gives you more choices. You can invest and trade on your own. Plus get advice and more comprehensive wealth solutions to help meet your unique needs. With award winning service, low costs and transparent advice, you can manage your wealth your way at Schwab. Visit schwab.com to learn more.
- [01:25]
Simon Jack
It's 1983 in a shopping mall in Southern California. A new food court is being unveiled to shoppers and the lunchtime rush is about to begin.
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Sing Sing
One outlet stands out, serving Chinese food. But forget table service and sprawling menus. Instead, a neat row of dishes gleams on stainless steel steam trays behind a glass counter.
- [01:44]
Simon Jack
Nearby, a PhD trained engineer watches numbers flicker on a computerized hill. She's tracking what sells, how fast dishes move and and which combos slow the line.
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Sing Sing
This isn't just a restaurant opening. It's an efficiency experiment in action.
- [01:57]
Simon Jack
And the results will change Chinese American cuisine forever and make that engineer a billionaire.
- [02:06]
Sing Sing
Welcome to Good Bad Billionaire from the BBC World Service. Each episode we pick a billionaire and we find out how they made their money.
- [02:13]
Simon Jack
We take them from zero to their first million, then from a million onto a billion.
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Sing Sing
I'm Simon Jack. I'm the BBC's business editor.
- [02:19]
Simon Jack
And I'm Sing Sing and I'm a journalist, author and podcaster.
- [02:22]
Sing Sing
And the engine engineer watching that lunch rush was Peggy Chung, who along with her husband co founded something called Panda Express, America's largest Chinese fast food chain.
- [02:33]
Simon Jack
Now, it doesn't exist in the uk, but if you've been to America, you will almost certainly have come across one of them.
- [02:39]
Sing Sing
Am I right in thinking it's kind of like the McDonald's of Chinese food.
- [02:42]
Simon Jack
In the U.S. exactly. They're in airports, shopping malls, drive throughs. And the couple are currently worth $7.4 billion, which makes them some of the richest restaurant owners in U.S. history. But she started her career working on battlefield simulators and computer systems for aerospace firms.
- [02:59]
Sing Sing
Yum. Peggy applied engineering logic though to fast food with early computer systems and performance metrics long before data driven, which is common these days, became a corporate buzzword.
- [03:10]
Simon Jack
And Panda Express changed how millions of Americans experienced Chinese flavors. Dishes like orange chicken are now a cultural staple.
- [03:18]
Sing Sing
Orange chicken? Never had it.
- [03:20]
Simon Jack
I mean, I've actually not had it, but I can imagine it's not that dissimilar from sweet and sour chicken. Y Sweeter, I think.
- [03:26]
Sing Sing
Okay.
- [03:26]
Simon Jack
And very orange.
- [03:27]
Sing Sing
Well, their success has also come with questions, however, about low wages, working conditions.
- [03:32]
Simon Jack
But first, let's find out how Peggy Chung engineered her first million One dish of orange chicken at a time. Peggy Cheung was born Peggy Siang in 1948 in Myanmar, then called Burma. And this was during a time of huge conflict as the country became independent from the British Empire. Peggy's family left for Hong Kong, where both her parents worked full time a PR executive and her mum was a travel agent.
- [04:00]
Sing Sing
When she was around two years old, she and her older brother were sent to live with their grandparents in the countryside near Zhangzhou, China, so their parents could work full time. She fondly recalls her time in China with her devout Christian grandmother, who was, perhaps unusually for a woman at that time, well educated and encouraged Peggy's learning. Aged 11, Peggy moved back to Hong Kong to live with her parents in their high rise apartment, which is a bit of a jolt, quite a move from her rural upbringing.
- [04:26]
Simon Jack
At school, Peggy was good at maths and in 1967 she enrolled to study maths at Baker University, which is a small Methodist college in Kansas over in the United States. She said she picked it because, in her words, it was easy to get into, but also because of its supportive Christian environment. Remember, she was raised religious. When she arrived in Kansas, she said the biggest shock was the food, saying that she'd never previously had pizza or Mexican food.
- [04:51]
Sing Sing
She soon met Andrew Chung, a fellow international math student who was born in China, had grown up in Taiwan and Jap. They fell in love and planned to graduate together and marry, but as he was a year ahead of her, she had to speed up her studies and finished in three years instead of four.
- [05:08]
Simon Jack
Talk about the things you do for love. Well, after she was offered a full scholarship, Peggy decided to transfer to Oregon State University to complete her degree. And she stayed on to earn a doctorate in electrical engineering, specializing in computer simulation.
- [05:22]
Sing Sing
Yeah, Chinese food seems a long way away from that, doesn't it? Meanwhile, as the son of a chef, Andrew had worked as a waiter in New York during the hol throughout his studies, and his father was a well respected chef, but hadn't owned his own business. Interesting that, because Andrew was determined to set up a business for himself. So Andrew moved to California to help his cousin run a Chinese restaurant in Hollywood.
- [05:44]
Simon Jack
But after a few months, Andrew and his cousin had some work disagreements. So instead, Andrew found a former coffee shop to buy in Pasadena, California to run as a Chinese restaurant. Him and his father, who would be the head chef, they scraped together $60,000 from savings, a bank loan, and they.
- [06:01]
Sing Sing
Opened pand in in 1973. Now, this is an interesting historical context here, called the Panda Inn because US President Richard Nixon in 1972 had this historic trip to mainland China where he met Chan Mao. And it ended over two decades of pretty hostile relations between the countries. And following that visit, China gifted the US two pandas, Sing Sing and Ling Ling, as part of what became known as Panda diplomacy.
- [06:31]
Simon Jack
For a second there, I thought you said my name I was. Yeah. And Panda diplomacy has become a bit of a buzzword because China gifted over 20 pandas to nine different countries as kind of a diplomatic outreach effort.
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Sing Sing
Outreach thing. Yeah. And any national news in the uk, the arrival of a couple of pandas was, you know, pretty far up the running. Order in the news queues around the block, queues around the block to see the pandas. Although I understand that at one point, rather than giving them away, they started to lend them, so they wanted them back in the. In the long run.
- [07:02]
Simon Jack
So not so much panda diplomacy as panda banking. Well, the restaurant became popular because thanks to a combination of Chinese and Sichuan cuisine style, because most other Chinese restaurants in the US at the time were an American version of Cantonese fast food. So if you think of things like dim sum, that's Cantonese. But Sichuan cooking tends to be much more punchier. They've got strong, bold flavors like, you know, the aforementioned orange chicken is inspired by sweet and sour chicken and Cantonese.
- [07:31]
Sing Sing
Just so I'm clear about regionally, where we're talking. Hong Kong, for example, would be Cantonese.
- [07:36]
Simon Jack
And also Guangdong, which is a part of mainland China.
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Sing Sing
Got it.
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Simon Jack
Well, Andrew roped in his parents, his brother, his sister, to work at the Panda Inn restaurant for free. And Peggy also worked at the restaurant on weekends when she visited she said she was not actually very good at it. She said I was there in a limited capacity. At first I could only do hosting and I was not a good hostess, not very efficient. I couldn't make cocktail drinks.
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Sing Sing
But that didn't put off Andrew because by 1975 Andrew and Peggy were married and she had a PhD in electrical engineering. That was pretty unusual for the time. Less than 5% of engineering PhDs in the mid-70s were awarded to women. And she developed a computer program that used an algorithm to scan heart X rays to help detect heart disease. Again, a long way from food. She soon got a job at aerospace manufacturer at McDonnell Douglas saying We built a system to simulate a battlefield for the Air Force. I enjoyed it but sometimes I had to stay until 4am to get the design done.
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Simon Jack
I think if you work in the restaurant business, sometimes working in the kitchen does feel like being on a battlefield.
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Sing Sing
I'm sure that's true.
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Simon Jack
Well after a few years Andrew opened a second Panda Inn and Peggy got a new job closer to home in Pasadena as a software department manager at an electronics company. But in 1982 she left that job. She had three young daughters to look after and she worked a few hours a week to help with Panda Inns accounts and payroll.
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Sing Sing
Now on New Year's Day 1982, a group of regular customers came in to eat before a big college football game. That's American football by the way. It was the family of UCLA football team head coach Terry Donahue. His brother was the developer of the Glendale Galleria mall and loved Panda Inn food. To ask the Changs if they would like to open an outlet in the soon to be launched food court.
- [09:19]
Simon Jack
Glendale Galleria was one of Southern California's busiest malls at the time and the new food court was one of the first of its counts. Opening a mall gave Panda Express one huge advantage over a traditional sit down restaurant. So if you imagine a traditional sit down restaurant, you're kind of trying to entice people in. But malls basically guarantee this kind of heavy foot traffic. Shoppers are in this kind of, kind of quick decision mindset. So they want to sit down, the food's already there, they don't want to leave to eat. And food cots offer this kind of visual display and free samples. So it makes it easy for customers to just choose on impulse. Unlike ordering Chinese takeaway where you might not know what you're getting.
- [09:56]
Sing Sing
Yeah, and also that's so interesting isn't it because your decision making window is really tight so you've got to have something that stands out. You've got to have something unique. You got to have something that looks nice. And Peggy saw an opportunity that seemed obvious to her as an engineer, but that wasn't so obvious to everyone. El fast food restaurants required a system, so she ensured that the new Panda Express would use a POS system. This stands for point of sale, essentially a computerized till. And it was only two years after IBM introduced the very first point of sale technology. So she's right at the cutting edge here.
- [10:32]
Simon Jack
Well, these POS systems came with generic software, but Peggy, remember, she knows what she's doing, so she wrote her own programs so Panda could more accurately track sales and spot which dishes were selling better than others. And Peg told the LA Times, it was confusing at the beginning, especially when everyone got nervous and pressed the wrong button, but it made everything more efficient.
- [10:53]
Sing Sing
We are very used to the idea of technology permeating every bit of every business and data, and you take it for granted. But that early, when they've only just introduced this kind of technology is quite trailblazing, actually.
- [11:07]
Simon Jack
You can imagine that a lot of restaurants were just keeping paper records in a big. Well, Andrew was also doing something. So he adapted the most popular Panda in lunch dishes into a smaller selection of options. So they chose dishes that could be prepped quickly, sit on the steam table service line without losing flavor or texture. Nobody wants a soggy vegetable on their plate. And Peggy looked at the kitchen processes and helped to streamline the cooking and preparation system so these dishes could be made quickly. Peggy said, as an engineer, we're trained to get everything done in the best way we can.
- [11:40]
Sing Sing
One of Peggy's key innovations was introducing this open kitchen design and a large glass front refrigerator stocked with fresh vegetables. So what they're going to get, again, that was pretty unusual.
- [11:50]
Simon Jack
That is basically a calling card to say, hey, we make things fresh. But there was an issue in the sense that some chefs were cooking things differently. So one would cook chow mein noodles with a light soy sauce. Others wanted a dark soy sauce. So she had them kind of talk it out until they decided a standardized recipe.
- [12:07]
Sing Sing
Now, I know someone who founded a fast food chain in this country, and one of the key things he told me was that you have to have the replication of the dish so that when you go into one outlet, you get exactly the same thing and you're expecting the same thing as you would get in another one. So that's standardizing. I know what I'm going to get. Super important to customers. And soon they were tracking Any new mall or food court openings and bidding for the best spots. In three years, they had nine outlets. Andrew said, I became addicted to malls. And they used profits from the Panda Inn and the first Panda Express outlets to fund this expansion. So they didn't have any outside investors. They owned a lot.
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Simon Jack
That's really remarkable. And with every new store, the Chungs would take an established team to the new location to help set it up and run it for a while. In Peggy's words, every team would live in one apartment for a month, and your supervisor might sleep in the same room as you rather than go to hotels. No one complained about not having privacy. It built team spirit. We have people who joined us as kitchen chefs and waitresses who are now vice presidents of the company.
- [13:09]
Sing Sing
Yeah, that kind of esprit de corps thing is so important with a growing business. Again, the same person I was talking about earlier saying, getting the culture right, making everyone feel they're part of a team, part of a family. Very important. When you're trying to grow a business, you don't want to start up with a bunch of newbies in a new place. You'll take an experienced team, a crack team who know what they're doing to get it going and then let it go off on its own.
- [13:31]
Simon Jack
And arguably even more important, if you're in the restaurant business. Right. I don't know if you've watched this TV show called the Bear, but that's essentially about a group of very disparate people in the restaurant business coming together and forming a family.
- [13:43]
Sing Sing
Yeah, I know. Incredible tv. Some of the best TV of the last couple of years, although a little bit more high end cuisine. I think that they were serving in the Bear than this kind of mall based, but probably not as successful as Peggy.
- [13:55]
Simon Jack
It's true. I don't think anybody on the Bear is going to become a billionaire anytime soon. Well, after four years, in 1987, executive chef Andy Kao was sent to Hawaii to open the first Panda Express there. And this is going to be a really important trip because Andy was inspired by the local Hawaiian citrus to create a tangy, sweet, spicy sauce based on traditional sweet and sour recipes that you'll get from different regions in China. He initially made the orange chicken dish with bone in skin on chicken, whole dried chilies. But then, you know, this is America. So he quickly adapted to boneless, skinless pieces of chicken, milder spices to suit everyone's palates, and this orange chicken became Panda Express's signature dish.
- [14:37]
Sing Sing
Now, orange chicken doesn't leap off the menu to me. And I think it's quite difficult for people outside the US to understand just how key orange chicken is in Chinese American cuisine. It's not just popular, it's kind of a staple. It's like chicken tikka masala in the UK or something like that. It makes up about a third of Panda Express's sales. Amazing. And you'll find a version of it on menus at thousands of Chinese American restaurants across the country. Seeing it, having seen its success, I.
- [15:03]
Simon Jack
Did look up a recipe, and it said, make it with orange juice, which feels so quintessentially American to do something with OJ.
- [15:10]
Sing Sing
OJ. Put in some OJ in there.
- [15:12]
Simon Jack
So by 1991, after eight years, Panda Express had 18 stores. And Andrew said that these early outlets were averaging between six grand and seven grand a week. So, you know, not to be snif at. So they were possibly bringing in revenue based on those figures, between five and a half million and six and a half million in 1991. Now, we don't actually know the profits they were making, but over eight years, it's likely to be over a million. So it's the early 1990s. It's a good time to say Peggy Chung is officially a millionaire.
- [15:54]
Sing Sing
Now let's take Peggy Chang from a million to a billion. After nearly a decade in business, the Chungs were now wary of competition and.
- [16:02]
Simon Jack
They decided to quietly branch out into another mall fast food chain. So this time they chose a fast, casual version of Japanese Teppanyaki Grill restaurants. Hibachi San, have you ever had Teppanyaki Grill?
- [16:15]
Sing Sing
Yeah, I have. That's where they have all the knives and they're doing it right in front of you. Very flashy, great skills on show.
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Simon Jack
It's basically the flavors of this kind of teppanyaki style food without the actual live cooking on hot plates. Because, you know, you can imagine a mall wouldn't exactly take very well to that.
- [16:29]
Sing Sing
Yeah.
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Simon Jack
The recipes were based on Andrew's family's own time living in Japan.
- [16:33]
Sing Sing
Yes. Andrew said, we started Hibachi San in malls in 1992 as a defensive strategy. Interesting to keep the Japanese restaurants from selling against our Chinese food at Panda Express. So if you can't beat them, join them. And this small Japanese chain meant the Changs could use their leasing and operational know how. All that business acumen across multiple brands while keeping the competitors from grabbing prime mall spots. And at the same time, it gave them a safe space to test new ideas, whether that be operationally, marketing, menu development without putting their flagship Panda Express brand at risk. So keep the stick to your knitting on Panda Express. Explore and innovate in other ways.
- [17:13]
Simon Jack
And other brands have done this. Right. So I can think of PepsiCo expanding into other beverages. You know, know Mountain Deer is owned by PepsiCo, Tropicana, Gatorade. So you know, they have all these smaller brands that don't threaten the bigger brands.
- [17:26]
Sing Sing
It sort of gives you the illusion of choice. And like for example in the case of Procter and Gamble, one of the big fast moving consumer goods businesses, they own lots of the same washing powder brands like Ariel, Bold, Tide Gain. They're all the same people. So you may think you've got a choice, they own them all.
- [17:42]
Simon Jack
Yeah. And you may think you're choosing between Chinese and Japanese with them all, but either way you're kind of your money's going to.
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Sing Sing
It's quite an interesting thing that, isn't it? Relationships between Japan and China, they're not happy bedfellows at the best of times.
- [17:54]
Simon Jack
I will say having been to America last year and actually not gone to Hibachi San, but gone to a very similar kind of takeaway style fast food, Japanese place. The food in those kind of shops is more like Chinese food. Yeah, don't kill me if you're listening to this, but I do think there's probably much more in common with those two cuisines in America than there is actually.
- [18:13]
Sing Sing
Perhaps in the American consumer mind. Well, they just say, oh, I'd like some, you know, Asian food.
- [18:19]
Simon Jack
Exactly. Well, by 1993, after 10 years in business, Pan Panda Express had over 100 locations. Now fast food giants usually turn to something called franchising at this point to grow further in size. And this lets individuals buy the rights to operate under a brand, gives them access to the name, proven systems, training, marketing support. But in exchange you're paying fees and royalties to that parent company.
- [18:42]
Sing Sing
Yes, it's a really proved a very effective way for letting some chains expand quickly with less capital because you're shifting the costs and the risks to these franchisees and that way you've got a little army of people expanding your brand which you don't have to do and you're not paying for, you're only paying a bit for to supply some of those things. And most major fast food giants have relied heavily on that. For example, McDonald's 38,000 locations, 95% of those are franchised. Subways is nearly 100%. Also Yum Brands. They own Taco Bell, KFC, Pizza Hut. That's about 98% franchised. That's actually the norm.
- [19:22]
Simon Jack
Well, Panda Express refused to use this franchising system to expand, so they are not the norm. Forbes actually estimated that choosing not to franchise may have cost them royalties of at least 4% of sales each year. But the chunks stood strong. They said the reason they did this was because, in Andrew's words, we can run them better.
- [19:41]
Sing Sing
And there is a trade off in the franchise system, which is that you're actually sort of outsourcing your brand. So you are losing a bit of control. Someone else is running it for. They're using your intellectual property, your branding, but you're not running it. So there is a decision to be made between fast growth and greater control.
- [19:58]
Simon Jack
Yeah. And if they don't do it right, the heat comes onto you still.
- [20:01]
Sing Sing
Yeah. Well, today though, Panda Express does have a few franchises, but in locations where ownership isn't possible. For example, airports, military bases, where you're not actually allowed to own the real estate. But back to the late 1990s, Panda Express was successful, but being a food court staple was already losing a bit of its lustre. Peggy said it is a captive market, but you're not able to build your own brand. People see you as the Chinese place within the mall. You know, you are part of a continuum of offers rather than perhaps a distinct one.
- [20:33]
Simon Jack
So she took those mall profits and she branched out into building freestanding stores. So street locations. Now, these proved actually more challenging than the malls because Panda Express outlets were competing with established Chinese restaurants. And there were over 15,000 of these places in the US by the late 90s. So Panda Express embarked on their very first street marketing campaign. Flyers, door hangers, you know, flyers hung on door handles were all spreading the word for Panda Express. And this gave the campaign a kind of local flavor as opposed to kind of blasting it on national television or radio campaigns.
- [21:08]
Sing Sing
And I bet the local Chinese standalone Chinese restaurants were thrilled to see Panda Express rock up on their street.
- [21:15]
Simon Jack
1997 turned out to be a turning point point for Panda Express. They opened their very first drive through in Hesperia, California, bringing their food to customers on the go. And that very same year, Peggy stepped up from operations manager to president and CEO. She also introduced, remember she's still an engineer at heart, a centralized supply chain to keep every single store running smoothly. And by this point, Panda Express was pulling in nearly $179 million in revenue. But they were setting the sights even higher. They wanted to be a billion dollar brand.
- [21:49]
Sing Sing
And we're at the beginning of a new millennium now. And I think we need to talk about what's happening to America's food culture during this particular decade.
- [21:56]
Simon Jack
You'll remember that fast food was in the headlines. First in 2001, Eric Schlosser's fast Food nation was exposing the hidden costs of the fast food industry, Its supply chains, labor practices and health impacts. And then in 2004, Morgan Spurlock's film Super Sized Me took the message mainstream. It showed what happens when you only eat McDonald's for a month. So consumers wanted healthier options. They were getting scared and they were asking more questions about where their food came from. And this dovetails with a huge explosion in organic food sales, from 6 billion in 2000 to nearly 25 billion in 2009.
- [22:34]
Sing Sing
At Pandarin, they were feeding real time data into their centralized distribution center. So Peggy was able to ensure fresh ingredients arrived on, consistency was maintained. And in a way, this gave Panda Express a bit of an advantage. Agility to expand rapidly in the 2000s without sacrificing quality, when there was more of a focus on how good is the food. I'm getting actually.
- [22:55]
Simon Jack
Yeah, you can imagine if you're walking into a mall and you're thinking, do I get the fried chicken, Do I get the waffles? Oh wait, I could just get grilled chicken and some veggies. That must have been really appealing. Well, palates also got bolder, right? So people began to crave more spice. They wanted more global flavors. Pancake Panda Express was basically ideally placed to offer exactly that. They tested dishes like firecracker beef, which is basically spicy stir fried beef. When the feedback was positive, they'd add them to the menu. And Peggy has basically said, our job at Panda Express is to follow that journey of how palates have grown. Which is a lovely way of saying people got less scared of spicy food.
- [23:34]
Sing Sing
That's right. And this was also a time though when the American mall was in relative decline, mostly due to the growth of online of course, which drove a coach and horses through lots of business models. This was bad for the food courts and Panda Express as a result was losing customers. So instead they started opening in what they call strip malls. We would call these retail parks in the uk. We have lots of different buildings and.
- [24:01]
Simon Jack
Then they moved into non traditional spots. University campuses, casinos, hospitals, Places with built in traffic like malls once offered.
- [24:09]
Sing Sing
Attractive audience basically.
- [24:10]
Simon Jack
Exactly. You don't want to leave campus, just go get a Panda Express. Well, the company keeps details private, but it's known that they've also purchased land for many of their restaurants. And owning those locations gives Panda Express a level of flexibility and control that many competitors lack. You don't have a landlord hiking up your rent all the time, for instance.
- [24:29]
Sing Sing
Well, there are pros and cons of owning your own real estate. One is that if you own the the buildings themselves, you have what they call high fixed costs. If that restaurant doesn't do well, you're then saddled with the real estate as well. Whereas if you have leases, if you're leasing it, you can just.
- [24:46]
Simon Jack
And this actually happened to a British chain called Pizzaland because it actually owned real estate in towns that later became unable to actually give it enough custom, right?
- [24:55]
Sing Sing
Yeah.
- [24:56]
Simon Jack
Well, these real estate decisions worked out more favorably for Panda Express.
- [25:00]
Sing Sing
At the Beginning of the 2000s, Panda Express had over 300 outlets. By the end of the 2000s, that figure had ballooned to over 1300.
- [25:09]
Simon Jack
But managing thousands of employees also introduced risks of a different kind. So there were legal battles over work workplace practices. Panda Express has navigated numerous legal action over the years, from class action wage claims to discrimination suits. But let's spend a bit of time breaking some of them down. In 2011, the Equal Employment Opportunity Commission sued the company, alleging that a manager at San Jose location treated Hispanic workers less favorably than Asian employees. Panda Express denied wrongdoing, but later settled that year and agreed to strengthen anti discrimination training.
- [25:44]
Sing Sing
Two years later, in 2013, the company settled another case involving sexual harassment claims from teenage employees in Hawaii against the manager. Panda paid $150,000 and committed to updating its policies and training programs. There are no known public statements from Peggy herself about this settlement, but a Panda Express spokesperson at the time said the company strives to provide a safe and empowering environment for all associates.
- [26:07]
Simon Jack
Also, Fast forward to 2021. A former employee also filed a lawsuit in LA Superior Court alleging she was pressured to trust building exercises at the behest of her manager. Panda Express strongly disputed these allegations, but the case drew national attention before being resolved.
- [26:25]
Sing Sing
And there's been some wage disputes, including class action suits between 2008 and 2010 alleging unpaid off the clock work and missed meal breaks. Panda Express has said it continually reviews its practices to ensure compliance with labor laws. I think it's worth saying that they're by no means the only fast food outlet which has had some of these problems. And actually it tends to be. We talked about franchising earlier. It tends to be more widespread in chains which have the franchise model because once again you've ceded some of the control to the Franchisee who's running the store with your branding, but they're actually controlling it.
- [27:01]
Simon Jack
Yeah. And it's worth noting as well, that particular side of the restaurant industry. There's low wages, there's high staff turnover. So it's kind of like fertile territory for these kind of issues to arise. And no lawsuits have targeted Peggy personally. But what they do do is underscore the challenge of managing a very fast growing workforce in an industry where these issues arrive.
- [27:22]
Sing Sing
Yeah. Let's take a little break to find out a bit more about Peggy the woman. And it's actually been quite difficult to find out. Cause Andrew served as the public face of Panda Express. Peggy worked largely behind the scenes. And this often happens with married couples. There'll be one person at the front and one person behind. If you remember, supplies billionaire Diane Hendricks. She was in the background until her husband died. Doris Fisher from the Gap, Same kind of story. They came to the fore later in the journey of the business. Peggy has given very few interviews. And when she has been profiled more recently, she quickly steers things back to the business rather than talk about her personal life.
- [28:01]
Simon Jack
But she has said a couple of things that kind of illuminate who she is, I think, because unlike many of our other billionaires, she says that she prizes sleep. She aims for eight hours. That's pretty unusual. I don't think I've slept eight hours in quite a while. And she also wants work, life, balance. She swims every morning, she walks every evening. She reads and watches Korean and Chinese soap operas. A Panda Express actually has its own podcast. And in a quick fire round, she described herself as book smart rather than street smart. Introvert, not an extrovert. Her favorite food is seafood, despite the fact that she's allergic. And she also refused to choose between rock and roll and classical. She. She says she loves both. Okay, so that's a bit of an insight into Peggy Chung, the billionaire.
- [28:43]
Sing Sing
Well, it's an insight into the sense that it gives you an insight that she doesn't want you to have much of an insight.
- [28:48]
Simon Jack
No.
- [28:48]
Sing Sing
So. But back to the story. By 2010, they'd reached their goal.
- [28:52]
Simon Jack
That's right. Yeah, they did. The Panda restaurant group had sales of just over $1 billion. I don't actually even want to know how many plates of orange chicken that is. So in 2012, Peggy and Andrew debuted on the Forbes billionaire list with a combined wealth of $2 billion. At the age of 65, Peggy Chung was now a billionaire.
- [29:12]
Sing Sing
And despite her success, she's always said it was hard for her to leave her engineering career and that she would love to be an inventor one day. I mean, you could argue she did invent something, but obviously not to her satisfaction.
- [29:24]
Simon Jack
No, I mean POS System Orange chicken. You know you're gonna be impressed by one of those.
- [29:29]
Sing Sing
At least it's not exactly a vacuum cleaner like James. I'm trying to think of our other inventor billionaires. James Dyson. I would probably say this his vacuum cleaner beats a plate of sweet and sour chicken.
- [29:39]
Simon Jack
But would you rather eat a plate of sweet and sour chicken or Hoover the house? That is the question.
- [29:43]
Sing Sing
Easy one.
- [30:00]
Simon Jack
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- [30:19]
Sing Sing
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And maybe a good playlist. But we've got the peace of mind part covered.
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- [32:01]
Sing Sing
Okay, so they're billionaires. Let's take Peggy and husband beyond a billion Peggy did she retire in in 2010? Now she was in her 60s.
- [32:09]
Simon Jack
Absolutely not.
- [32:11]
Sing Sing
No way. And she still hasn't. She's still co CEO and co chair of the Panda Restaurant Group alongside husband Andrew. Her three daughters have all worked for the business. Their eldest is chief Brand Officer. One worked in operations and the other worked for the charitable foundation before becoming a doctor. Doctor.
- [32:27]
Simon Jack
She also now has grandchildren. She likes spending time with them. But when she was asked about retiring, she said she continued to find joy in her job. And that in her words, every single new step the company takes brings new things. We must learn more structures, more challenges, more organization to develop something new to implement.
- [32:43]
Sing Sing
And the company has continued growing. As of 2025, the end of last year, they have over two and a half thousand locations and revenues of $6 billion. Majority of those are in the US handful in Mexico, Canada, Middle east and Asia. Asia.
- [32:57]
Simon Jack
I don't know why they haven't come to the uk.
- [32:59]
Sing Sing
That's a good question. Peggy, if you're listening, why not the uk?
- [33:03]
Simon Jack
I actually know someone who was in an airport recently and deliberately went to seek out the orange chicken at Panda Express.
- [33:09]
Sing Sing
Yes.
- [33:09]
Simon Jack
And said it was pretty good. Really?
- [33:11]
Sing Sing
Okay. I'm also quite interested about their forays into Asia. I wonder how that went. Because, you know, they call it selling coals to Newcastle or selling sand to Saudi Arabia.
- [33:22]
Simon Jack
Yeah, you have to wonder because. Because if they were so scared about coming up against competition from Japanese restaurants, you must have thought they were a little bit scared about coming up against competition from other Asian restaurants in Asia.
- [33:33]
Sing Sing
Yeah, but listen, they've done some other billionaire type stuff, right?
- [33:36]
Simon Jack
Yeah. They've also branched out. In 2018, they joined a group that bought the Mandarin Oriental hotel in Las Vegas.
- [33:42]
Sing Sing
Very high end.
- [33:43]
Simon Jack
Yes. Now it's called the Waldorf Astoria. They bought that for $214 million. And through the Cheng family trust, they've also diversified their wealth beyond Pandemic Express. Like just salad pieology, Urbain Cafe and real estate investments.
- [33:58]
Sing Sing
And in 2025, the Chung family trust joined a high profile investor group set to acquire the Portland Trailblazers basketball team, their first ever major league sports ownership. These billionaires cannot resist buying sports teams. What's wrong with them?
- [34:12]
Simon Jack
I'm not sure. Maybe it's the ultimate flex.
- [34:13]
Sing Sing
If I was a billionaire, multi billionaire, I would buy my football club.
- [34:17]
Simon Jack
Which one would that be?
- [34:18]
Sing Sing
FC.
- [34:18]
Simon Jack
Let's catch up. In 10 years, let's see if you've made a billion.
- [34:21]
Sing Sing
Sadly, there are some American billionaires who currently own it. But you know, maybe I would buy them out if I had the money, which I don't.
- [34:28]
Simon Jack
Well, now we've discovered how Peggy Chung has made her billions. It's time to score her.
- [34:32]
Sing Sing
And in this section, what we do is we take our billionaire and just for fun, we score them from 0 to 10 in a bunch of categories. Things like wealth, controversy, giving back, philanthropy, legacy and power. So we're going to start with just wealth. What do you reckon?
- [34:49]
Simon Jack
Well, I mean, she is worth a lot of money now, you know, $7.5 billion. But Peggy's parents did pretty solidly mid jobs, you know, PR executive, travel agent in Hong Kong. You know, it's not quite the rags to riches tale that scores people highly in this category, but we do like.
- [35:05]
Sing Sing
To look at how they spend it. Some are very, very frugal, like Warren Buffett of this world, who still lives in the same house he bought in 1959. They do not.
- [35:15]
Simon Jack
No. They reside in a 25,000 square foot mansion built in 2018 in Henderson, Nevada. It's got views of the Vegas strip and the Waldorf Astoria hotel, which they also own. Nice to be able to look out of window and go, I own everything I see.
- [35:30]
Sing Sing
Yeah.
- [35:30]
Simon Jack
They've also got a $14 million penthouse in Honolulu.
- [35:34]
Sing Sing
Oh, nice. Okay, so if you add those two things together, I'm going to give them a four because they're under 10 billion. And we've got some people are worth 400, 500 plus.
- [35:45]
Simon Jack
Yeah, I would give them a four out of 10 as well, I think.
- [35:48]
Sing Sing
Okay. Controversy. We've heard about the labor and wage lawsuits. How do we score those?
- [35:54]
Simon Jack
I mean, none of them actually directly named or involved Peggy specifically, But, you know, just to play Devil's Adv, you could argue the buck stops with you, doesn't it?
- [36:02]
Sing Sing
Yeah, you create a culture, don't you? But when you're dealing with so many employees over such a large empire, you know, it can get difficult to control every little thing.
- [36:12]
Simon Jack
I would say she doesn't score super highly on controversy for me.
- [36:15]
Sing Sing
No, I'm going to give her two for controversy.
- [36:17]
Simon Jack
I'm going to agree with you. I feel like I'm agreeing with you a lot in this section.
- [36:20]
Sing Sing
Okay. Long may it continue. So you usually talk me up or down.
- [36:26]
Simon Jack
Yeah. So maybe, maybe this is the start of a new direction.
- [36:29]
Sing Sing
What about giving back philanthropy? There's an organization called Panda Cares, the customer donation initiative. A lot of Peggy's philanthropy is done through that. Has raised nearly half a billion dollars. Mind you, that's customer money, not our own.
- [36:42]
Simon Jack
Yeah, that's taken out of your wallet if you buy an orange chicken.
- [36:45]
Sing Sing
Yes, but personal giving, you know, the.
- [36:48]
Simon Jack
Chungs have been involved in fundraising since the 80s. They've been giving donations actively, often to healthcare, including 17 million to a Dominican hospital in 2025, 100 million to cancer care research in 2020.
- [37:03]
Sing Sing
Forbes has done some of this work for us. They have looked at how much they've given away, and they have found that she has given away less than 1% of her wealth. So although she gives away hundreds of millions, as her net worth is seven and a half billion, they think that's less than 1%. So that's not an enormously impressive effort.
- [37:23]
Simon Jack
No, when you put it all into perspective, I think I would give her maybe. Maybe a two or three out of ten.
- [37:29]
Sing Sing
Two. Two for me.
- [37:30]
Simon Jack
Two out of ten.
- [37:31]
Sing Sing
Okay, fine. Power and legacy. Can you be. Can you have power and legacy as running Chinese restaurants?
- [37:37]
Simon Jack
I mean, I actually think you can in America, because I think at the time, you know, we talked about Panda diplomacy, how there was this huge tension between America and the States that was only really kind of slowly started to defrost of Nixon's visit. Yeah, it's kind of a big deal to be able to be the person who introduces Chinese food to America and just popularizes it across the whole country.
- [37:59]
Sing Sing
I think that's true, isn't it?
- [38:00]
Simon Jack
But, you know, I do think it is kind of a big deal, maybe if you're American. I think Panda Express is a huge thing.
- [38:06]
Sing Sing
Yeah.
- [38:07]
Simon Jack
I think it's up there with McDonald's, with KFC.
- [38:10]
Sing Sing
Yeah.
- [38:10]
Simon Jack
You know, it really brought Chinese flavors to America in a way that no other restaurant chain has ever done since.
- [38:17]
Sing Sing
Okay, well, you're talking me up here. What. What do you reckon?
- [38:20]
Simon Jack
If I was American, I would give it a seven or an eight. Out of a ten.
- [38:24]
Sing Sing
Wow, that's high.
- [38:26]
Simon Jack
Because. Because, you know, we're talking about the whole world. Right. It's not really conquered the rest of the world in the same way it has America. I would give it maybe a six out of ten.
- [38:33]
Sing Sing
Okay. All right. That's a high score for an orange chicken, I have to say.
- [38:37]
Simon Jack
What can I say? I just love Chinese food.
- [38:39]
Sing Sing
Okay, all right, your 6. I'm gonna go 51 lower than that. It's a very interesting thing to use some of her skills in engineering, programming, simulating battlefields and bringing those skills to be bear on fast food and introducing a new cultural outpost for Chinese culture in the United States. So I think that's a very unusual path to apply their skills to.
- [39:03]
Simon Jack
I think also it's a very good test case for what happens if you don't immediately go into the industry that you end up dominating. If you go and refine your skills and pick up different ways of doing things in other workplaces, in other jobs, before you kind of turn your attention to the thing you end up doing.
- [39:19]
Sing Sing
It reminds me a bit of Kiran Mazumda Shaw, an Indian billionaire billionaire who started out trying to brew beer and used some of her skills and experience in brewing up cocktails of stuff to actually start insulin production. So that was another one where, you know, unusual scientific skills originally targeted one area and ended up in quite a different one.
- [39:41]
Simon Jack
Yeah, you know, if you're listening to this and you're thinking, God, I don't think I could make it in science or engineering, who knows, you could become a fast food billionaire.
- [39:49]
Sing Sing
So is she good, bad or just another billionaire? What do you think? Email Good bad billionaire all1wordbc.com or drop us a text or WhatsApp to 0019176861176 and tell us what you think.
- [40:05]
Simon Jack
Well, we've also got some listener feedback on your email to say your podcast is fabulous. Thank you. I look forward every week. I think I've listened to them all twice. Wow. I want to pick my fave but honestly couldn't as so many top mentions. After listening me and my dad call to discuss weekly and make our own decisions. Maybe we should do a pod.
- [40:25]
Sing Sing
That sounds good.
- [40:26]
Simon Jack
Although she does asterisks to say normally they decide they're bad. Thank you for being an important part of my week in 2025. I listened to all of 2024 too I think and will continue.
- [40:35]
Sing Sing
Thank you Anya, appreciate that. And Tom from Barcelona in Spain emailed us to say love the podcast, the format, the stories and particularly its two wonderful presenters. You knew that that one was going to get read out. Pity the two of you can't become billionaires yourselves. Are quite right by explaining to plenty of other podcasters I could name how to make a better job of presenting a po.
- [40:57]
Simon Jack
Well maybe name them next time Tom. We'll just keep that to ourselves.
- [41:00]
Sing Sing
But he goes on to say I doubt though given their absurd obscene wealth and the enormous gulf that exists between their wealth and that of 95% of the rest of us aren't all billionaires unless they're giving it all away by definition bad. Well that is one perspective. Okay, next episode we have the woman.
- [41:18]
Simon Jack
Who was once hailed as the next Steve Jobs.
- [41:21]
Sing Sing
Yeah, at one point the richest self made female billionaire in the world but became a folk anti hero in financial circles yeah.
- [41:30]
Simon Jack
Her company, Theranos, wanted to revolutionize healthcare by providing hundreds of blood tests from just a single drop of blood. But did the technology work? No, it didn't.
- [41:40]
Sing Sing
And she is currently languishing in a prison. So she went from prodigy to billionaire to inmate. Quite a story.
- [41:46]
Simon Jack
That's Elizabeth Holmes on the next episode of Good Bad Billionaire.
- [41:50]
Sing Sing
Good Bad Billionaire is a BBC World Service podcast produced by Tamsin Curry. The researcher is Maria Noyen, the editor is Paul Smith, and it's a BBC Studios production for the BBC World Service. The senior commissioning producer is Sarah Green and the commissioning editor is John Manelle.