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PF Chang's in China? Co-founder talks expansion

P.F. Chang's China Bistro, the restaurant chain that helped make Chinese fare mainstream in many suburban U.S. markets, has so far avoided opening an outpost in the country its food plays homage to. However, that may be on the verge of changing.

"We're not in a hurry, and it would be a challenge, I think, to open in China," said Philip Chiang, the company's co-founder, in an in-person interview. "But one day, you never know."

Two dishes from PF Chang's new “Lucky 8 Dishes”
Katie Little | CNBC
Two dishes from PF Chang's new “Lucky 8 Dishes”

The privately held chain has 211 domestic locations and more than 50 international ones, including in Canada, Mexico, Latin America, the United Arab Emirates and the Philippines. It also just opened its first locations in Korea, China's neighbor to the east, at the end of last year.

"We're getting close," he said. "Korea is a big step because that's right next door, and they have a huge Chinese population as well as a lot of Chinese restaurants in Seoul, so we'll see."

Less 'western' Chinese food?

So what has prevented expansion to Chiang's birthplace to date? Various obstacles have cropped up, including China's very regional cuisine compared to P.F. Chang's multiregion menu.

"Our style of service is more Western, [so] we may have to change that," Chiang said.

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In China, meals are typically served communally, while P.F. Chang's table setting in the U.S. emphasizes individual meals.

"The kitchen setup is very traditional, but there's more labor involved in China," he added.

P.F. Chang's isn't the only restaurant to shy away from the birthplace of its cuisine. Pizza giants, like Little Caesars, Papa Murphy's, Sbarro, Yum Brands' Pizza Hut and Domino's Pizza, have opted out of opening so far in Italy, a country known for creating pizza.

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While many restaurants have seen big profits from the white space that China presents for American companies, it has also delivered big headaches, as well. A scandal involving a mutual supplier of Yum and McDonald's during the summer rocked their bottom lines and scared many customers away in the region. Now, both companies have reported lagging sales in the area.

'Very difficult' for mom and pops

Speaking about the broader restaurant business, Chiang said it has grown more difficult than when he co-founded P.F. Chang's two decades ago, due in part to soaring real estate prices in big cities and more rules and regulations globally.

"Some of it is obviously good, but some of it is just so costly that it is difficult for restaurants to make money," he said.

"It's difficult, it's very difficult for the smaller, family-owned restaurants to survive now," Chiang added.