It all started in 1849, when the California Gold Rush was in full swing and the first Chinese restaurant in America opened its doors in San Francisco. Since that day almost 170 years ago, the Asian foodservice segment has exploded, with more than 45,000 Chinese restaurants operating across the country today, according to the Chinese American Restaurant Association. And that doesn’t even include the countless other operations that fall into the Asian category, whether they’re Japanese, Thai, Korean, Filipino, Indonesian, or Vietnamese.

But there’s only one brand that’s big enough to compete on a massive scale with the McDonald’s, Subways, and Panera Breads of the world and earn a place on the QSR 50: Panda Express. In 2017, Panda Express operated just over 2,000 stores across the U.S., with system-wide sales of $3.1 billion and an AUV upward of $1.6 million.

“Panda Express is the model that I was like, ‘Wow, in 30 years they’ve become thousands of units and it’s still family-owned,” says Mary Nguyen Aregoni, owner of Chicago-based Vietnamese fast casual Saigon Sisters. “It’s been a very inspiring model for me, and I really admire what they’ve done.”

And with its new Innovation Kitchen concept under testing in Pasadena, California—featuring an elevated menu cooked in small batches and displayed in woks, rather than the typical steam-table setup—Panda is looking to dominate the Asian foodservice market by an even wider margin.

But, despite Panda’s massive stronghold on the market, fellow brands within the Asian segment see an opening for their concepts to compete. “If you’re looking to just refuel and you’re looking for predictability, Panda’s a great place to go,” says Dean Small, founder and managing partner of Synergy Restaurant Consultants. “However, if you’re looking for more of an experience where there’s diversity of flavors and textures and aromas and beverages, I think you can look beyond Panda to concepts that are offering that.”

It’s no coincidence that one of the restaurant companies most focused on delivering this type of experience—Pei Wei—is also the clear No. 2 in the segment and has openly challenged Panda on the marketing and menu fronts. Hiring Panda’s ex-creative agency, Siltanen & Partners, to revamp its brand, the nearly-200-unit concept has boldly introduced new advertising that directly calls out its biggest competitor, pitting its tiger mascot against the panda and comparing Panda Express’s frozen chicken to its own fresh, cut-in-house, all-white-meat chicken. Even Pei Wei’s Wei Better Orange Chicken is a direct shot at Panda Express.

“We’re going to continue to push on Panda. They’re the market leader. They’re 10 times our size,” says Brandon Solano, chief marketing officer at Pei Wei. “Consumers are very familiar with them, but we want consumers to have a fresher, better option.”

To more closely compete with Panda Express—as well as fast-casual concepts like Panera Bread and Chipotle—Solano says Pei Wei has to communicate its freshness and higher quality to consumers, drawing attention to things like the on-staff butcher at each location and fresh whole-flank steak that’s cooked and sliced on premises.

The brand is also messaging its value, attempting to rid consumers of the perception that its items are too pricy. That’s why Pei Wei rolled out its Wei Better Orange Chicken for just $5, as well as offered its new General Tso’s Chicken for $5 for a limited time. “We’re really offering consumers access to Pei Wei—consumers who maybe thought we were too expensive to make their financial plan for the day,” he says. “But we’re in that conversation now.”

Menu development at the Pan-Asian concept is also critical to scaling the business, and it continually adds fresh “staple” items while introducing customers to more adventurous dishes, like its Thai Style Doughnuts coated in Saigon cinnamon and sugar and served with a sweetened condensed milk dipping sauce. “They’re approachable and a little twist on the familiar, but there’s some newness to it that’s attractive to consumers,” Solano says of the dessert dish.

In May, the Dallas-based brand unveiled a new store prototype with an open kitchen design and to-go section where online customers can pick up their pre-paid orders—all in an effort to directly compete with Panda. “The loser in the Pepsi Challenge wasn’t Coke or Pepsi. It was all the other brands,” Solano says of Pei Wei’s decision to confront Panda Express head-on. “So if we can make this a two-horse race, we really like our chances.”

But if the rest of the Asian segment has anything to say about it, this will be nowhere close to a two-horse race to the top, thanks to a slew of small-but-innovative Asian concepts that are making themselves known around the country.

At 27 units and counting, Mama Fu’s is one of the largest of these chains making its mark on the ever-expanding Asian market. Concentrated primarily in Central Texas, the 12-year-old brand serves made-to-order options with a range of Asian influences, from lettuce wraps and kimchi to pad Thai and pho. “It’s five main culinary categories from Asia, and it’s all high-quality food,” says CEO Randy Murphy. “It’s basically just a small-footprint P.F. Chang’s.”

In an attempt to persuade consumers to eat Asian food more frequently, brands like Mama Fu’s take this Pan-Asian or fusion approach, in which they offer a variety of dishes, flavors, and cuisines under one roof to secure repeat visits. “It allows you to expand your menu and have some depth and variety for somebody who’s not looking for just noodles or Orange Chicken, but is looking for a more interesting experience where they can be exposed to new flavors and textures that you can’t necessarily get at Panda,” Synergy’s Small says.

Consumers’ willingness to add Asian food into their regular restaurant rotation is setting up brands like Mama Fu’s for promising growth potential, as well as giving them the ability to compete with the burger and pizza segments. “People are eating Asian so much more today than they were 10 or 15 years ago, especially millennials and Gen Z,” Murphy says. “We’re targeting kids in elementary and high school now that have the palate of a 38-year-old. It’s great because we have so much more demand.”

And although the Asian population in America continues to grow—making up 5.6 percent of the U.S. population, according to the 2010 Census—interest in Asian cuisine isn’t just coming from the Asian-American market. As more Americans travel abroad and food culture becomes increasingly pervasive, the demand for more exotic flavors back home is higher than ever. “There’s no better time to cook Chinese and Asian food than right now,” says Lucas Sin, chef and culinary director at Junzi, a New York City–based concept serving Northern Chinese noodle dishes and wraps known as bings. “The amount of limited-service restaurants that are in the Asian spectrum—or even in the Chinese spectrum only—is bigger than ever. The food is delicious, the operations are innovative, and it’s all in all pretty incredible.”

To ease customers into her Vietnamese concept—a cuisine in which the average American diner isn’t all that well-versed—Aregoni designed Saigon Sisters’ menu to have a sort of “soups, salads, and sandwiches” approach, making the pho, spring rolls, and banh mi categories feel a little more familiar. “We wanted to convert people to Vietnamese food, and this makes it more manageable for someone eating Vietnamese for the first time,” she says.

Emphasizing Vietnamese food’s healthfulness—thanks to its limited use of oils and heavy reliance on fresh herbs and vegetables—has also been crucial for Saigon Sisters’ success. This ability to fit into a healthier lifestyle and diet is something many Asian operators think set the segment up for future growth.

“A lot of times, we’re not even considered Asian by our customers,” says Frank Klein, CEO of 10-unit, Northern California–based Asian Box, which creates grilled Vietnamese “boxes” using ingredients like lemongrass pork, coconut curry tofu, fresh vegetables, and brown rice. “We’re just considered a great healthy lunch or dinner for their family, and I think it differentiates us greatly from other brands.”

Mama Fu’s Murphy says customers are often surprised to find out how easily the brand’s food can be adapted to fit their dietary restrictions or needs, whether it be low-carb, low-sugar, gluten-free, or vegan. “It’s one of the few cuisines that you can eat with almost any diet out there, unless you’re going to eat a salad every day,” he says. “But it does come with a bigger SKU mix and a slightly higher cost of goods.”

These aren’t the only challenges standing in the Asian segment’s way as it tries to make its presence known in the limited-service market. A majority of these concepts use recipes that require a higher level of skill or specialization than those used by burger, pizza, sandwich, and even Mexican concepts.

“Anybody can buy a frozen patty that’s high quality, cook it in their store, get a great potato bun, put mayonnaise and pickles and ketchup on it, and it’s going to taste great,” Klein says. “It’s a little harder to execute when you’re trying to use sriracha and tamarind and fish sauce. These things have a lot of techniques to them that are very hard to execute on scale.”

Often, these concepts rely on staff with a high knowledge of a particular region’s recipes, ingredients, and prep methods. But as wages rise for many Asian-American and Asian immigrant workers, finding the labor needed at a low price tag has become almost impossible. And with the skill level and pay required to staff Asian concepts, brands become harder to replicate and remain consistent as they scale. Mama Fu’s Murphy says that’s likely been one barrier preventing many Asian concepts from growing.

But perhaps the biggest challenge for Pei Wei and other Asian concepts’ success is the elephant—er, panda—in the room. “They have a system, and it works very well for them,” Solano says of Panda Express. “But it’s really not on-trend with consumers.” And with Panda being the largest brand in the game, by far, its visibility can mistakenly lead consumers to think there are few concepts that offer more adventurous options in a limited-service format.

That’s why brands like Pei Wei, Mama Fu’s, Saigon Sisters, and more are focused on scaling the success they’ve seen thus far to steal more market share from Panda moving forward. Murphy says many of these concepts are poised to perform well in a regional capacity, as Mama Fu’s has done with its Central Texas base. The brand plans to grow at a rate of about 8–10 percent each year, clustering its units in smaller markets to help gain more traction.

At Asian Box, Klein has plans for measured growth, but says he understands the brand’s limits and where it’s best positioned for growth.

“We’re not looking to be the next Chipotle. We’re not looking to be the next Panda Express,” he says. “We’re looking to grow in a socially, eco-friendly, high-quality-food way, with markets that are more accepting of our brand. We’re not going to try to put a square peg in a round hole just to grow.”

Junzi, however, has dreams of limited-service domination, hoping to eventually rival Panda Express with 2,000 units across the country. “But that would take about 50 years,” CEO Yong Zhao acknowledges. “In the meantime, we want to become the leader of this new generation of Chinese food,” he says, adding that he and his team hope to serve as mentors to other restaurateurs in the Asian space.

As for the burning question of whether these—or any other—Asian concepts can actually do the seemingly impossible and knock Panda Express from its No. 1 spot? Maybe, brands and experts agree—but not in the near future. “I don’t think anyone’s going to touch them soon,” Small says, noting that it would take a brand at least 20–25 years to reach the billion-dollars-in-sales level like Panda did long ago. “There’s a lot of very interesting concepts that are out there, but I don’t think anyone will get to Panda’s size in the next 10 years.”

Consumer Trends, Emerging Concepts, Fast Casual, Story, Asian Box, Mama Fu's, Panda Express, Pei Wei