P.F. Chang’s has over 200 restaurants in the United States, and an additional 95 restaurants across 25 countries. For the majority of these restaurants, the majority of revenue is derived from dining in the restaurant.
With its percentage of sales increasing for take-out and delivery, P.F. Chang’s has been moving away from traditional dine-in restaurants. Even before the pandemic, the company closed its Chicago dine-in restaurant and opened three to-go restaurants throughout the Chicago area. Their plan is to open three to-go restaurants in New York City, with an additional 12 to-go locations throughout the United States.
The to-go locations use a smaller footprint by not having a dining area. A traditional P.F. Chang’s restaurant would be approximately 7,000 square feet. The to-go version will be between 1,500 to 2,000 square feet. These to-go sites will offer a reduced menu, concentrating on customer favorites.
- P.F. Chang’s To Go (Oct 15, 2020, P.F. Chang’s)
This post is based on the Restaurant Dive article, P.F. Chang’s Continues Takeout-Only Expansion with NYC Launch, by Julie Littman, October 19, 2020; the Jacksonville Daily Record article, P.F. Chang’s bringing To Go concept to River City Marketplace, by Karen Brune Mathis, January 8, 2021; and the YouTube video in the Spotlight. Image source: Moab Republic/Shutterstock
1. Why expand with a take-out/delivery restaurant model?
Guidance: Obviously with the COVID-19 pandemic, dine-in options are limited. With recent spikes in infection rates, dine-in has been suspended in many location. So, restaurants are looking more closely at take-out/delivery options. Even before the pandemic, many restaurants, such as P.F. Chang’s, had been experiencing an increase in revenue from to-go orders.
Another advantage is the location and size of the facility. A take-out/delivery can be a smaller facility. They are utilizing facilities for the take-out/delivery sites which are 1,500 to 2,000 square feet, compared to a dine-in restaurant which averages 7,000 square feet. A smaller footprint reduces the cost of the facility, and makes it easier to find appropriate locations.
2. What operational advantages does P.F. Chang’s to-go model offer?
Guidance: A take-out/delivery restaurant offers several operational advantages. The facility is allowed to focus on the preparation of food for deliveries. Staff are not spending time on seating customers, providing drinks, and cleaning tables.
Ordering is simplified as well. P.F. Chang’s has been working on its website and app to automate the ordering process, reduce the staff needed to take orders, and improve order accuracy. Even taking orders over the phone is more efficient than taking orders at the table.
Another interesting advantage is that the facility could be used as a ghost kitchen. In other words, other menus could be prepared out of the same kitchen.
A final advantage is that the take-out/delivery could be used to test the popularity at that location. If sales are good, a complete dine-in restaurant could be constructed in the future, without risking the investment of a full restaurant up front.