Cre­at­ing a global din­ing king­dom

There is Philip Chi­ang and P.F. Chang’s. The for­mer helped start the lat­ter, which has be­come one of the big­gest Chi­nese restau­rant chains in the world, CAI CHUN­Y­ING re­ports from Wash­ing­ton.

China Daily (Canada) - - IN DEPTH -

PNew brand That new brand is P. F. Chang’s. “My de­sire is to try and build an Asian restau­rant in mul­ti­ple lo­ca­tions. That has never been done be­fore,” said Fed­erico. “What I saw in P. F. Chang’s is a brand that is not nec­es­sar­ily try­ing to be an Asian restau­rant, but, rather, an up­per-end ca­sual din­ing restau­rant that hap­pens to serve Asian food. I found it to be uniquely dif­fer­ent.” Fed­erico joined P. F. Chang’s in 1996 as pres­i­dent and re­placed Flem­ing to be­come CEO in 1997.

In re­call­ing the con­tri­bu­tion of P. F. Chang’s founder Flem­ing, Fed­erico said, “Paul is one of the best con­cep­tual de­sign folks in restau­rant busi­ness. He un­der­stands where the con­sumers are go­ing and get ahead of con­sumers. ” Flem­ing re­mained on the com­pany board un­til around 2003.

Un­der Fed­erico’s lead­er­ship, P. F. Chang’s em­barked on a fast-growth track.

By the end of 1998, there were 23 full-ser­vice restaurants across the US. In De­cem­ber 1998, P. F. Chang’s par­ent com­pany, P. F. Chang’s China Bistro, Inc (PFCB), went pub­lic, of­fer­ing 4,150,000 shares at $12 per share and be­com­ing the first Asian restau­rant chain to be listed on a US stock ex­change.

To cap­ture the au­di­ence that prefers a quicker, more ca­sual din­ing ex­pe­ri­ence with Asian cui­sine, the com­pany launched an­other restau­rant line, Pei Wei Asian Diner, in 2000, sell­ing noo­dle bowls, sal­ads and small plates such as crab won­tons. Fed­erico said about 40 per­cent of Pei Wei’s cur­rent 193-restau­rant sales are for take-out. For P. F. Chang’s, it’s 15 per­cent.

P. F. Chang’s also launched its pre-pre­pared frozen-food line in 2008 through a li­cens­ing agree­ment with Unilever. Now its prod­ucts are avail­able at about 33,000 lo­ca­tions in the US, in­clud­ing Tar­get, Wal-Mart and many neigh­bor­hood gro­cery stores.

Even though there are more than 40,000 Chi­nese restaurants in the US, more than McDon­alds, Burger King and Ken­tucky Fried Chicken com­bined, ac­cord­ing to Jennifer 8. Lee, au­thor of The For­tune Cookie Chron­i­cle, a hilip Chi­ang never knew that his bo­hemian ex­per­i­ment of cre­at­ing a sa­lon-like restau­rant where he can feed and en­ter­tain his fel­low artists would lead to one of the big­gest Chi­nese restau­rant chains in the world.

P. F. Chang’s, the full-ser­vice sit-down restau­rant brand named with the slightlysim­pli­fied form of Chi­ang’s last name and the ini­tials of his part­ner, Paul Flem­ing, is a din­ing king­dom with an­nual rev­enue of $1.2 bil­lion, 28,000 em­ploy­ees and 250 lo­ca­tions world­wide, 211 US restaurants and 39 in­ter­na­tional.

It all started with Flem­ing — now owner of a na­tional restau­rant chain, Flem­ing Prime Steak­house, and a re­gional chain, Paul Martin’s Amer­i­can Grill — din­ing at Chi­ang’s small restau­rant in Los Angeles in the early 1990s.

Flem­ing was so taken by Chi­ang’s food that he asked Chi­ang to join him in cre­at­ing a restau­rant spe­cial­iz­ing in Chi­nese food but with Western-style ser­vice, a com­bi­na­tion that is rare in the typ­i­cal fam­ily-owned mom-and­pop Chi­nese restaurants scat­tered in ev­ery cor­ner of the coun­try.

So, the first P. F. Chang’s opened in Scotts­dale, Ari­zona, in 1993. And its sig­na­ture was and re­mains Chi­ang’s food.

“I want my food to be very clean and sim­ple, but very tasty at the same time,” said Chi­ang, who grew up in Shang­hai and Tokyo be­fore land­ing in San Fran­cisco at age 14.

“I do not want my food to be starchy with brown sources or filled with un­nec­es­sary cheap in­gre­di­ents just to make dish big,” he said, invit­ing im­ages of typ­i­cal Amer­i­can­ized Chi­nese food.

And, the ser­vice at the first P. F. Chang’s was typ­i­cal of up-scale Amer­i­can restaurants where din­ers of­ten are sur­rounded by dis­tinc­tive dé­cor, sooth­ing Western mu­sic and at­ten­tive wait­ers.

“We try to please a very large au­di­ence,” said Chi­ang in an in­ter­view with China Daily. “You may call it the main­stream Amer­i­can au­di­ence.”

Though the restau­rant was very well re­ceived, to ex­pand to mul­ti­ple lo­ca­tions would take more than good food and ser­vice.

Flem­ing and Chi­ang soon got help from Richard Fed­erico, then pres­i­dent of the Ital­ian Con­cepts di­vi­sion of Brinker In­ter­na­tional, a leading name in the restau­rant in­dus­try that owns Chili’s Grill & Bar and Maggiano’s Lit­tle Italy.

“My po­si­tion at Brinker was as good a job in the restau­rant in­dus­try as you can have,” said Fed­erico dur­ing an in­ter­view with China Daily. “But I am in­tel­lec­tu­ally cu­ri­ous about a new brand that is fill­ing the mar­ket place that no­body in­tended to fill.” book sur­vey­ing the his­tory and sta­tus of Chi­nese restaurants in the US, Chi­nese food is the largest restau­rant seg­ment in the US that is not dom­i­nated by chains.

Yet P. F. Chang’s man­ages to stand out and be­come one of the big­gest Asian full-ser­vice restau­rant chains in the US with about 6 per­cent of mar­ket share, ac­cord­ing to Tech­nomic Inc, a Chicago-based re­search firm.

For Philip Chi­ang, one of the rea­sons for the suc­cess re­mains con­stant, the food.

“Our food is con­sis­tent. We have cer­tain tra­di­tions that we stick with and those are very im­por­tant,” said Chi­ang.

The main dishes of­fered at P. F. Chang’s do­mes­tic and in­ter­na­tional lo­ca­tions have stayed much the same as those cre­ated by Chi­ang for the first P. F. Chang’s.

Chi­ang calls his recipes a “re­fined” ver­sion of tra­di­tional Chi­nese food, which stresses the fresh­ness of in­gre­di­ents, sim­pler prepa­ra­tion process and sen­si­tiv­ity to­ward main­stream Amer­i­cans’ din­ing pref­er­ences that can be found in many other pop­u­lar cuisines.

“Chi­nese food is so vast. It is not dif­fi­cult for us to find the Chi­nese ver­sion of taco or Ital­ian pasta. I try to adapt some of the Chi­nese food to what’s evolv­ing now with Amer­i­can pub­lic,” said Chi­ang.

Chi­ang said when he trav­els, he seeks food that re­lates to his own taste of food — sim­ple, clean, and well done. Then he thinks about how to present it to his Amer­i­can cus­tomers by re­fin­ing it, for in­stance, shift­ing some of the in­gre­di­ents or even the way the ma­te­ri­als are cut to make his own cre­ation.

“I am not try­ing to rein­vent Chi­nese food. All I am do­ing is to re­fin­ing it within the perime­ters I set for my­self and for P. F. Chang’s,” Chi­ang said.

Chi­ang’s par­ents are both from an aris­to­cratic class in China with pri­vate chefs pre­par­ing fancy food.

“I grew up with par­ents that we now call food­ies. I al­ways love din­ning out. And I’ve al­ways wanted to have a café where my friends can gather,” re­called Chi­ang who has a bach­e­lor of fine arts de­gree from the Art Cen­ter Col­lege of De­sign in Los Angeles, one of the finest de­sign schools in the US.

When Chi­ang’s mother, Ce­cilia Chi­ang, a

PAUL FLEM­ING • Now owner of Paul Martin’s Amer­i­can Grill and Flem­ing Prime Steak­house

• Founded P. F. Chang’s in 1993 • Chair­man, P. F. Chang’s China Bistro, Inc (2000-present) • CEO, P. F. Chang’s China Bistro, Inc (1997-present) • Pres­i­dent, P. F. Chang’s China Bistro, Inc (1996-present) • Pres­i­dent, Ital­ian Con­cept di­vi­sion, Brinker In­ter­na­tional (1989-1996)

• Co-founder/part­ner, Grady’s Good­times

For Richard Fed­erico, the long-term CEO, the train­ing is one of the cen­tral parts that en­sures P. F. Chang’s mar­ket dom­i­nance.

“Be­cause it is very com­plex and dif­fi­cult to ex­e­cute at a very high level, we cre­ated a bar­rier of en­try to our com­peti­tors,” said Fed­erico, point­ing out that there are other large or­ga­ni­za­tions try­ing to get into the niche mar­ket but have not been suc­cess­ful.

Patrick Scan­nell, op­er­at­ing part­ner of the P. F. Chang’s restau­rant in Chevy Chase, Mary­land, an up­scale res­i­dence and shop­ping area, said the train­ing pro­gram has been one of the high­lights of his eight years at P. F. Chang’s.

“You met people who are so en­thu­si­as­tic about what they do and em­body ev­ery­thing that is P. F. Chang’s,” said Scan­nell, who joined P. F. Chang’s right out of col­lege and worked his way up to be­come, af­ter be­ing a chef and a trainer him­self, head of one restau­rant. “Now I want to do the same to my staff.”

Scan­nell said his restau­rant, which opened about three years ago, at­tracts an aver­age of 300 cus­tomers on week­days and 500 on week­ends, a lower num­ber com­pared to all P. F. Chang’s restaurants.

Frank Spano is one of them, a par­tic­u­larly royal one.

“My time is amongst my most val­ued pos­ses­sions. What I choose to do with what lit­tle free time I have avail­able is a de­ci­sion I make care­fully; and yet I al­ways found my­self com­ing back to Patrick’s P. F. Chang’s,” said Spano whose works cov­ers na­tional se­cu­rity and in­ter­na­tional law.

“Per­haps it is the wel­com­ing at­mos­phere that feels like an ex­ten­sion of my liv­ing room, or per­haps it is that when I walk up to the bar the staff al­ways knows my name and my fa­vorite food and drink,” he added.

P. F. Chang’s restaurants are of­ten sit­u­ated in high-end shop­ping malls with decor that is eye-catch­ing, such as a huge stone horses and life-size repli­cas of the terra cotta Xi’an war­riors. The in­te­rior de­sign usu­ally is filled with clas­sic Chi­nese paint­ings that de­pict scenes of life in an­cient China.

Be­ing able to un­der­stand and iden­tify the kind of real es­tate that it takes to sup­port P. F. Chang’s con­cept, ac­cord­ing to Fed­erico, is an­other rea­son that con­trib­utes to P. F. Chang’s suc­cess.

To en­sure that P. F. Chang’s is of­ten the first choice for Asian food in any ma­jor mar­ket, Fed­erico made ev­ery ef­fort to build one P. F. Chang’s in ev­ery ma­jor US city in its first ex­pan­sion phrase, leav­ing the pub­lic with the im­pres­sion of be­ing the first-comer. Go­ing pri­vate

In May 2012, P. F. Chang’s China Bistro, Inc (PFCB), was taken pri­vate by Cen­ter­bridge Part­ners, a New York-based pri­va­tee­quity com­pany, for $1.1 bil­lion.

Cen­ter­bridge of­fered $51.50 a share in cash to PFCB share­hold­ers, which was about 30 per­cent higher than its then-trad­ing price at NAS­DAQ.

“There is time to be pri­vate, and there is time to be pub­lic, and now pri­vate again,” said Fed­erico who also serves on the board of Domino’s Pizza and Jamba Juice.

“Be­ing pri­vate al­lows us to re­fresh our con­tent with­out hav­ing to do it in pub­lic eyes, so we can be more pa­tient, more thor­ough in our re­search and in­vest a lit­tle bit more and test more things to come up with what we think might be the next rev­o­lu­tion­ary thing for our brand,” said Fed­erico, adding that the com­pany is now ready to en­ter a new phrase of ex­pan­sion.

Ac­cord­ing to Fed­erico, the com­pany is ex­per­i­ment­ing with a new Sushi line. In re­cent years, P. F. Chang’s has in­cor­po­rated South­east Asian cui­sine to its of­fer­ing such as Thai, Korean, and Sin­ga­porean, to meet the emerg­ing trend in the Asian din­ing mar­ket.

P. F. Chang’s also has a gluten-free menu, on top of its veg­e­tar­ian menu, which is rare among Asian restaurants. Its dessert menu mainly draws on Western tra­di­tion with a bit of an Asian twist.

For Fed­erico, the Oo­long Chilean Sea Bass, a fil­let mar­i­nated with the Chi­nese tea oo­long (wu long) and broiled with soy source, gin­ger, gar­lic, and vine­gar, is his all­time fa­vorite, which Chi­ang picked as well when asked to rec­om­mend his fa­vorite dish. Flem­ing could not be reached for this test.

“To part­ner with Philip Chi­ang and Paul Flem­ing is very unique. Each of us has a skill set that we brought to the party. That syn­ergy is what cre­ated the P. F. Chang’s of to­day,” said Fed­erico. Con­tact the writer at charlenecai@chi­nadai­


Philip Chi­ang, the found­ing cui­sine cre­ator of P.F. Chang’s.

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