Selling An Excellent Asset

Andrew Cherng, the Chinese immigrant who moved to the United States as a teenager, obtained a degree in Applied Mathematics from the University of Missouri in 1972, and then moved to Los Angeles that same year to help a family member run a restaurant, subsequently obtained an SBA loan and launched the Chinese restaurant Panda Express.

Cherng gained a reputation for his refusal to sell to outside investors, citing a desire to run the business right and not have to answer to the often short-term interests of a shareholder base. That is why Panda Express never had any pink slime episodes.

In several interviews, Cherng has discussed the terms under which he would consider selling his ownership stake in Panda Express. His simple response? “If I could get a valuation on it like Chipotle’s.” At the time, Chipotle was trading for around 55-60x earnings.

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