From Finance to Fresh Smoothie Bowls: How Andrew Pudalov Overcame Challenges and Franchised a National Concept
Key Takeaways1. You may have an opinion about the products you sell, but the data will be what proves what is successful, and what works and what doesn’t work.
2. Make sure your business has a strong base and foundation. Enforce this structure with employees, but always allow employees to challenge it.
3. You don’t have to be everything to everyone. You simply have to be the best for the few and within your sector.
Andrew Pudalov: I want us to constantly challenge ourselves, and I want franchisees also or partners to challenge us too, but we have a formula that works really well and you’ve got to start there.
Matt Levin: Inspirational stories, actionable business tips, and real-world strategies.
Join us as today's guest shares how you can make your business more resilient in an unpredictable world.
Hi everyone. I'm Matt Levin and you're listening to The Resilient Restaurant podcast.
Today I'm joined by Andrew Pudalov, Founder and CEO of Rush Bowls, a fast-casual concept known for its wide variety of fresh and healthy smoothie bowls. We’ll discuss tough decisions he's made over the years, how to adjust your brand message over time, what he looks for in successful hires, lessons from his early years in the finance industry that have served him well in the restaurant industry, and other lessons he’s learned throughout 17 years of leadership.
About Andrew Pudalov
Matt Levin: Andrew, thank you so much for joining us today.
Andrew Pudalov: Thank you for having me.
Matt Levin: I'd love to just start with a little bit of your background and story. Can you share a little bit more around how you got started with Rush Bowls and a little bit more on your overall business background?
Andrew Pudalov: I had a very unique kind of background before I started Rush Bowls. I was global derivative trading in New York City. I worked at Bear Stearns, Credit Lyonnais, Morgan Stanley for an extended period of time as Global Head for National Australia Bank. As I joke, a professional gambler on behalf of the banks. Fortuitously I did well at it and it's good for the banks, too.
9/11 really was a trigger point for changing my life. My wife was in the tower in ‘93. A lot of people don't even realize they tried to blow up the World Trade Center in ‘93 prior. I didn't even know her at the time. Around 9/11 we had an infant, it was my wife's first day back from maternity.
We both were living in the city and we had a three-year-old at home with a nanny and all of a sudden 9/11 happens. That day forward we decided that we were not going to live in Manhattan. I lost a ton of friends that day. It really was brutal on so many aspects of my life and our life. And I wanted to do something that I had no knowledge about and build it from scratch and move.
And I just had to figure out the timing of it. And I was lucky enough and fortuitous enough to make that occur. I moved to Boulder and bought a house, had no job, and started Rush Bowls. So, terrifying, scary ignorance, arrogance, a mixture of all these crazy things, but it really gave the birth to Rush Bowls. It was really an incredible challenge and extremely rewarding too in many ways.
The Birth of Rush Bowls
Matt Levin: That's quite a story. Wow. Can you contextualize a bit more about the Rush Bowl concept you pioneered? We're all pretty familiar with healthy bowl concepts, but I'm not sure it was as common back almost 20 years ago when you started this business.
Andrew Pudalov: When you went out - and again this is 17-18 years ago - when you went out to lunch or went out to eat, the options for kids, in particular, were chicken fingers, if you're lucky, hotdog, or grilled cheese. There was really no other option. Now obviously, things have changed a little bit especially in cities, but there are no options - that was your kid's menu.
Going to college, I would tell you, I lived on a Burger King honestly. I ate a ton of Burger King. It was awful for you. And I felt that there's a huge opportunity within the college community to provide this healthy nutrition, especially the students that were a little older, that they could really appreciate feeling good and eating a nutritious meal.
I didn't want to be a smoothie business. I really wanted to be a meal business and that really gave birth to the bowls. I wanted to bite into something and get the creaminess of kind of a thick smoothie, but also the crunch of the granola. Maybe some fruit on top. I think initially we just had honey and granola, we didn’t even have the fresh fruit on top. But have that texture in your mouth, that flavor bomb that you may have in your mouth, plus a crunch and the sweetness of honey.
So early on, we had to really convince people: hey, this is lunch, this is a meal, you want to eat it with a spoon. And they were like, “Spoon? What do you mean? I want a straw. I want to sip it.” And I'm like, “This is different, unique.” And it really caught on. Right away I knew there was a big opportunity there. I really focused on bowls 17 years ago.
The challenge obviously is getting the word out. How do you explain it to people on an avenue that they'll understand? And the best way is to get it in their mouth quite frankly. If people taste it, they'll love it, they get it. And that was really where the business born its success.
Matt Levin: How long did it take before you felt like it really clicked, with either in the local markets or more broadly national where people were like, “Oh yeah, that's a bowl place. I get it.”? When did you start to see this versus people saying, “No, what do you know? Give me the straw. I don't know what the heck this is.”?
Andrew Pudalov: So I would say it took a couple of years of explaining it and people getting the word out. We were lucky because we were in a college community and they adapt to things much quicker, and they're willing to experiment with things more often.
Also along the same time, which was really unique to us, was that allergies have always been an issue, but really started coming to the surface with peanut butter and other allergies out there, and having options for people.
And we were very early, really from day one of being -- you can be vegan, we have an option for your allergy. And we didn't upcharge people for that. We didn't feel you should be punished because you have an allergy and to this day there are options for anyone with gluten-free, dairy-free, vegan. We have an option for you and we don't upcharge.
So it was very important that people within that community really got the word out also, which is a separate community, that here's a healthy, great place to eat and no other restaurant really is providing any food for that.
Matt Levin: That's super interesting. So mentally I summarize your story as from finance to food, and they really couldn't be further apart in a lot of ways. So obviously you learn a lot by doing, and you're gonna make mistakes along the way. That's just the nature of business. Can you share some of your biggest mistakes or most painful lessons you learned in the early days?
Andrew Pudalov: I've learned to be a hell of a lot more patient. In the trading days now means this second, drop everything and do this, this second. I had to learn to be much more patient. Which is a good thing, I should be much more patient. I'm constantly learning to be more patient.
When you're in the trading world every second counts and you're making moves and thinking, calculating every second, and not everyone works that way. I do, but I've adapted to be able to work in a lot of different environments and be much, much more patient, and be a better human being in general, I would say.
Being more agile, adaptable, flexible. A lot of the bowls were created by employees. One thing I always joke about, we have a particular bowl - I don't want to say which one - we have particular bowl that was created and I tasted it and I'm like, “Yuck, this thing is disgusting.” I'm numbers-oriented and it sold well, and it's like, bam, it's on the menu. Because ultimately I always had the perspective that it's the customer's point of view. We have an opinion, but the numbers and the data will really prove what's right and what's wrong in many ways, or if there's a right and wrong. So it's not just “Mm this tastes good, let’s do it.” It's really looking at what works and what doesn't. Truly in this case it was a team effort on a lot of fronts.
I would say probably the biggest challenge was just the patience of things. Even the build-out. Why is this not being built out quicker? Why is this not catching on quicker? But it's also the drive within that, right? So you're constantly pushing and I think, again, like everything else, it provides opportunity to evaluate yourself and the business and hopefully come to a mashup that works well in both areas.
Rush Bowls’ Aha Moment
Matt Levin: One thing I'm always interested about and hearing from entrepreneurs is that “aha” moment when they really feel like the business is clicking, where they made it out of the infancy of the business and they go, “You know, I think I've got something that works.”
Sometimes that's after many years of struggles, sometimes it's like right out of the gate, sometimes after a major pivot or something. When did you have that moment where you were like, “ I really got something. It's working, I'm really onto it. Was it right away after launching, a couple of years down the road?
Andrew Pudalov: One thing great about the restaurant industry is you can figure it out really quickly. If it's a success you really can see it quickly. It wasn't like right away. I would say a year or two into it that people were just going nuts for the bowls, and you could see the people reordering it all the time.
It was catching on right away within the college community. They were all talking about, “Oh, we need to go to Rush, we need to go to Rush. We've got to get our bowls, we've got to get our bowls.” That's the “aha” moment, like wow, I really have something going on here. People are looking for this meal. It took a little time, I would say because we had to get in people’s mouths. But once it did, it exploded and that was like, “We got this.”
Matt Levin: Did you see that in the data or is that more of like a qualitative sense? You start to see the same faces, your frontline workers are saying, “Hey, I've seen the same kids come in every single day this week.” How did you figure it out?
Andrew Pudalov: I was very focused on the customers and that they're returning. That was the big trigger “wow they love this” and let the data prove it thereafter. But I was really in front of it because you're seeing the same people coming in three times a day for a bowl. So they're spending all this money on this bowl that they need for breakfast, lunch, and dinner.
Again, the students were very focused on it. The issue though with college students is you lose a quarter of them every year, right? That inherently helped grow the bowl concept on a national level. Especially we had a lot of customers that said, “oh, I'm living in New York, New Jersey. I need a Rush bowl.” It's the best of breed, we can get that today. They come to see you and they move wherever it is. That's why when we franchised, we really looked at it on that national approach.
So we're in 22 states this year. Probably more actually, 23. So we're really a national company and that approach was very different than most of these super regionals that came after or copied what we were doing.
Communicating the Brand’s Positioning and Vision
Matt Levin: This melding of data and behavior kind of reminds me of that famous Jeff Bezos quote, the Founder of Amazon, who said, “At one point, if you have anecdotes and you have data and they're in conflict, the anecdote is usually right.” Which is a very counterintuitive type of thought. This also really sounds to me like the kind of strategy you undertook, which is kind of compelling melding of the left brain, right brain type of thinking. And to some extent, that's the kind of thinking that's just required to really build a successful consumer brand.
So speaking of building that brand, if you look now at the way you communicate with customers and the position that Rush Bowls occupies in people's minds, is it different than it was at the start? Has the way that you think about and communicate that positioning and vision changed?
Andrew Pudalov: I think we shifted quite a bit. The company I think started 17 years ago, explaining what a bowl was. The education, education, education, education.
It's a very, very costly way to start a business and I don't recommend it for the most part. We're lucky; we were in the right place, the right time. You can do whatever it may you want to say, but our brand has grown and has grown well.
And I think due to that is adjusting it, tweaking it a lot. Our logo's changed, we've tweaked things quite a bit. And we always are. If you notice our branding now is very bright, very visual. We always try to be a visual, bright company, but we're even highlighting it more with the colors of the fruits. Cause we don't adulterate any of this stuff. It's all the real colors and that passion can come through in a lot of different ways, but try to be a little bit sophisticated about it. We try to have it kind of a sophisticated approach to eating healthy, and you have to adapt that and you have to be cool and novel, so I would say we're constantly changing it to a certain extent.
Andrew Pudalov’s Approach to Hiring
Matt Levin: So you've mentioned a couple of times now about people and that whether it's the employee ideas that have come up or employee driven concepts for new bowls, you're, in a lot of ways, depending on the team for a lot of this fresh thinking and bottoms-up approach. Can you tell us a little bit around your approach to hiring? What do you look for? Are there secrets or kind of rubric that you've developed that makes successful hires into the business versus non-successful hires?
Andrew Pudalov: First thing that works for me may be different than it works for others, but definitely type A personality that doesn't want to sit still, doesn't want to stand or sit down I think is really important. Constantly thinking and innovative.
One of the first things I say to a new employee is, “Listen, we've done these things for a hundred million years, one particular way. I can assure you there's a better way to do it. If you see a different way of doing it, bring it up, let us know. If you see something that you like, let me know, let the team know. Because we’ve done it this way for a million years and we're teaching it this way, doesn't mean it's the best way.”
So I would say type A, independent thinker, is really important to me, and customer-centric. The customer part of it I think we can teach them a little bit more. But as long as they want to get their hands dirty and in it, I think that's the most important part of it.
Balancing Innovation and Structure
Matt Levin: So there's this kind of profile you've now outlined, this duality of being an independent thinker and someone to challenge the status quo and at the same time, you need people to operate, within the bounds of the organization, particularly in a franchise model where you need brand consistency. So how do you balance these two things?
Andrew Pudalov: I think that's one of the trickiest situations for any franchise, including our own. Where do you lie that balance? And I think there's two different things. What type of employee I hire and what type of franchisee or partner do I bring into the fold? I want us to constantly challenge ourselves and I want franchisees also or partners to challenge us too, but we have a formula that works really well and you’ve got to start there.
You’ve got to start with a really great base. And what we do here as an organization is try to do our best to enforce that people are sticking to the plan because we know that plan works well. But as a successful company, we constantly have to innovate and think of not just products, but really operationally quicker ways of doing things, how to meet our customer's needs.
One of the successes, and we'll probably go about this about COVID, is being able to adapt to be customer-centric and be able to focus on that customer to get that food to them in a safe environment, in a safe way quickly. But on a side, the team I hire I want to be extremely innovative and focused, but they still have to know why the base works well and why we got to sit with the structure.
We’ve got to always challenge the structure, but understand why we have this structure. On a franchisee standpoint, we try to work with our partners to understand and make sure they first get the structure right. And then once you're there, we have a whole portal that says, “Hey, send us ideas.”
Let us work with this together to see what works and what doesn't. We launched a product actually that's called the Rush Bites basically, and it's rolled peanut butter, which we ground in-store, just raw peanuts, and then we put oats, chocolate chips, and roll it in coconut. That came from a franchisee out of Columbus and he loved the idea and it really compliments as a healthy snack that's super nutritious and people love them. We sell tons of them, but it really came from a franchisee telling us, “I really like this.”
So you got to follow the rules, understand the rules, and then let's innovate together. But we're doing it together. The challenge is, and this is where the data comes in, I think my customers would love this. Thinking your customers will love it, doesn't mean your customers love it. So we got to actually look, maybe test something on the menu, and see if they actually do love it. So trying to take that opinion and make the data prove that the opinion is correct or maybe incorrect.
Challenges during COVID
Matt Levin: So you kind of touch on, obviously the challenges of COVID, can you share a little bit more about how you dealt with this, particularly across all these different locations and different parts of the country. Was there ever a point where you thought it was an existential crisis for the business or do you feel like you were really well-positioned to deal with it?
Andrew Pudalov: I would tell you from March 1st to March 15th, no one knew what was going on. I mean, we went from, “Yeah, it seems like it'd be a problem” to “Everything is shut down.” My daughter was in college, my son was in college. “Get them home as quickly as possible in lockdown at your home.”
Nothing's open. And quite frankly, it was terrifying on a human front opposed to just a business front. So, we had to very much kind of examine it from there, and then understand that we are extremely well-positioned as a business once things kind of loosened up and everyone understood this is the worst case.
My uncle and aunt died of COVID right away in New York. I was very much aware. What was going on in particular in New York where I had family, it was extremely severe right away and terrifying and on a lot of fronts.
So then you go, “All right, take a deep breath. Where are we now and what can we do as a business to really facilitate to our customers getting them products?” W e are already serving health food, which really became a focus, thank goodness, for the world. And then on top of that, we were really take-out oriented.
So then it's just delivery services, tamper-proof containers, making sure that the food was safe. And then certainly from there, serving our customers in every which way, running into the curb, taking orders online, whether it's QR codes, we're really ahead of the curve on accepting orders and getting those orders out quickly to our customers.
So on a lot of fronts, I think we were well-prepared for a situation that was totally unexpected. And fortuitous to say, I think this arena, in particular, is only growing. And I think it's going to be an area for our growth going forward. I think we're extremely well-positioned for -- opposed to a sit-down restaurant or larger scale restaurants that have a lot of moving parts and have much bigger basis -- we were small, efficient, and well adaptable to your customer right away, so I think it served us extremely well.
Challenges and Experiments
Matt Levin: I'm really sorry to hear about the family tragedy. But I'm glad to hear that you were able to adapt and deal with that type of enormous challenge. I want to touch a little bit on some other challenges. Were there experiments or expansions you had that didn't go so well at some point?
Andrew Pudalov: In 2010 I started Rush Bowls, it was a frozen form of a Rush Bowl. We launched with Whole Foods. By 2016, we were in 40 states with mostly Whole Foods, but we were in some Costcos, and that was incredibly very, very different.
I’m very fortuitous. I have my own stores, but I understand franchising, I understand wholesale business line. That, again, was an education process and very, very challenging on a lot of fronts breaking into the food business, especially supermarkets and stuff like that, which was a really incredible learning experience on so many fronts.
This was one of the funny challenges: Where do you position us? Do you position us, which you would think, with breakfast items or do you position us with dessert? We're not a dessert, we're a healthy item, but are we with fruit? Where are we exactly within that setup? It has its own challenges.
And also when you're in a supermarket, someone has to open up a glass barrier door to get your product. And one thing I'm really kind of proud about is, at the time, we came out with black packaging and everyone's like, “Hey, don't do black packaging on on the shelf there it's not going to look good.” Our packaging was so unique and cool, and we had a rim around the packaging before they had it all automated, it was like a sticker that was on the lid of the top that basically had “Rush Bowls” in a bright color.
So we were really unique on the package standpoint. Where we had our challenges was with co-packers, making sure the co-packer made the product timely, had followed the formularies, and stuff like that. But we did that for many years. And then roughly in the end of 2015/2016, when franchising started blow up, my co-packer went out of business. So that was quite a challenge and we couldn't make the items for the demand. And then I basically said, “Alright, I'm going to build franchising out and then come back to this at a later date.”
During those six years, I mean, it was incredibly challenging. That whole business model is a very different business model. It was really an incredible learning experience, truly. That's the best part of this business is I'm constantly learning, honestly.
Matt Levin: So there must be thousands, if not hundreds or tens of thousands, of food or beverage or CPG entrepreneurs who would just give their right arm to be in Whole Foods or crack Costco. Some people might be listening and saying, “Oh my God, I can't believe you let that go.” But at the same time, you really had this opportunity to expand on the franchising side, and it sounds like a very, very tough decision to make.
If you look back and you take this almost 20 years of experience and put it into perspective in terms of building and scaling franchise operation, do you have a secret formula or at least some sort of heuristic or piece of advice around how to grow and scale that?
Andrew Pudalov: I think for me, I wanted to focus on one or the other. I didn't want to focus in half, do anything. I think as we grow, it's just gonna make that situation down the line that much simpler and that much better. We have a lot of experience with it, but I want to make sure that we build a franchise in the way I want it built, and that's really important. I'm big about foundations. You build a thick, heavy foundation that deals with everything well, and then good things happen.
Andrew Pudalov’s Advice to His Younger Self
Matt Levin: Knowing what you know now, what would you go back and advise your younger self?
Andrew Pudalov: I think organizationally, just plan it ahead as much as possible. I know you have to adapt and I always want to change, change, change, but again, you need a base of structure that you want to see exercised. So, plan it out a little bit more. I think I was lucky; I did more off the seat of my pants than I should’ve, I would say.
Have a little more structure. Getting it more focused, I would say, and then building that foundation a little more, write it down, have it structured in a way that, yeah, this is the plan for a year or this is the plan for two years, this is the plan for three years, having that all down.
Now, again, you got to change your plans and adapt to succeed. I think at a lot of times, unless you're just lucky, but I can assure you everyone forgets that Amazon was selling books and now look at it. So being able to adapt to that is really important.
Advice to Listeners
Matt Levin: I think the interesting thing about Amazon is that they really focus on just doing one thing in the business. They just sold books for years. the vision was always there being the everything store, but the execution on that was like making sure they did one thing incredibly well. To hold that duality in your mind, I think is incredibly challenging for any entrepreneur in any business. It sounds like you were really able to navigate that pretty successfully, which I think is very impressive.
So I want to leave our audience with one last piece of advice or wise words. If you had to give your peers, your fellow operators, and restaurants in hospitality one piece of advice, just one thing, the most important thing, what would it be?
Andrew Pudalov: Certainly, you have to have a great product, but it boils down to a lot of customer service. So reading your customer, interacting with your customer, understanding your customer.
So I would tell them, don't worry about being everything to everyone. Worry about being the best for the few. And it doesn't have to be few, but a lot of the things is, “Oh, I want to do this. I want this, I want this product. I want this,” as opposed to being very focused on being the best within your sector. I think that's our success is that we're very focused on being the best in that area. Even with competitors out there, we are the best.
Matt Levin: Andrew, thank you so much for joining us today. This was super insightful and it's great to hear and learn from your not only many years of business experience in food but your lessons and experience in the financial world as well. Thank you.
Andrew Pudalov: Well, thank you. It's really been a pleasure here with you today. So thank you so much for having me.
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