The first Pizza Hut opened in a converted tavern in Wichita, Kansas, in 1958. Eleven years later, the restaurant debuted its iconic red roof design. Another 10 years after that, in the late 1970s, Pizza Hut was America’s No. 1 pizza chain, with more than 3,100 locations.
Its ambitions didn’t stop there. Pizza Hut’s parent company, PepsiCo, felt certain it could win people over around the world. PepsiCo’s longtime CEO Don Kendall was extremely focused on international expansion, and there was one untapped market he was desperate to conquer: the USSR.
Kendall had made his name in the 1950s by shoving Pepsi into the hands of Nikita Khrushchev. The Soviet leader drank three cups of capitalist soda in front of news photographers and declared it “very refreshing.”
At a time when American blue jeans and rock ’n’ roll were officially banned in the Soviet Union, Pepsi became the first U.S. consumer product broadly available there. For Kendall, that wasn’t just a business success story. He believed that corporations were the best hope for international diplomacy. “In my opinion, you don’t change people by isolating them. You change people by having … commerce back and forth,” he said in 1975. “That’s how you develop trust.”
Kendall officially retired in 1986, but he didn’t really stop working—and didn’t let go of his biggest dream. He wanted to open a Pizza Hut in Moscow, making it the first American restaurant chain in the USSR. The man he tasked with doing it was Andy Rafalat.
Rafalat helped spearhead Pizza Hut’s international operations. By the 1980s, he’d opened restaurants across Europe, the Middle East, and Africa. Business was booming everywhere: There were nearly 7,000 Pizza Huts in 54 countries, with combined annual sales of $3.5 billion—more than $9 billion in today’s dollars.
Regardless of all that success, the idea of opening a Western fast-food place in the USSR was kind of absurd. After all, the whole concept of private business didn’t exist under the Communist system. “We all recognized that if this was ever going to happen, that this would be a miracle,” Rafalat said.
But then, in the ’80s, a new leader came to power in the USSR. And under Mikhail Gorbachev, everything started to change.
Gorbachev’s push for reform, known as perestroika, came when the Soviet economy looked close to collapse, with shortages of everything from shoes to onions. Under perestroika, the USSR would at least experiment with capitalism, including partnerships with foreign businesses. In early 1989, a group of Soviet bureaucrats gave Pizza Hut their blessing: They could open a restaurant in Moscow.
It had taken years to get that handshake agreement, but for Rafalat, the real work was just beginning. To pull this off, he’d have to move to Moscow—and figure out how the Soviet Union worked.