Shanli Liu breaks down how the Panda Express owner built a billion-dollar annual cash flow by staying put. Each of his 2,300 locations generates roughly $3 million in revenue with a 27% margin. The secret: own the land, never sell, and let decades of compounding do the work.
Almost all businesses, if you stick in them for a long period of time, you can become exceptionally wealthy. Like the guy who owns the building that I live in, he's my neighbor, he owns Panda Express. If you were in this room and he says, hey, I own a fast casual Chinese restaurant, we sell kung pao chicken and General Tso's chicken, we've got 5 locations, and, you know, each location does $3 million a year top line, we run 27% net margins. Like, think about how shitty, but shitty, right, of a business model that is. Who wants to scale brick and mortar fast casual low-skilled labor business. Some people in this room would give that guy advice, you should teach other people how to sell chicken, and that would be terrible advice for him because what he should do is keep doing it for 45 years and they do $3.7 billion a year in chicken sales with 27% net margins and take home a billion a year in cash every year and do it tax-free because he owns all the dirt and the real estate. It just took him 45 years.
