How Perseverance Helped Scott Wise Build a Restaurant Empire
When opening a second restaurant led to ruin as a young operator, Scott Wise rebounded with a chain of successes.
A million-dollar mistake with a happy new beginning, that’s the story Scott Wise, president and CEO of Pots & Pans Production, which owns four restaurant concepts including Scotty’s Brewhouse, has to share. But his knowledge of the industry has not come easy. Wise is quite candid about just how difficult and expensive his own young learning experience proved to be, and how—just as he was in the midst of a rosy comeback—an almost fatal illness changed his entire philosophy.
Wise started out as that proverbial overnight success: At the age of 22, he opened his first restaurant, Scotty’s Brewhouse, in his hometown of Muncie, Indiana. The year was 1996 and the reception was ideal as eager customers, acclaim, and ready cash poured in. Now, celebrating two decades in the business and about to sign a lucrative private equity deal that will add 180 new Scotty’s locations (with draft beers, a full bar, and a “from scratch” menu) in places as far away as Japan, he’s the first to admit that he achieved success far too effortlessly, and that it made him cocky. “I thought, this is easy,” he reflects. “Why does everyone think it’s so hard? So, we opened a second restaurant.”
Rather than repeat the formula of his first restaurant, however, he decided to do something completely different: what he calls a “very nouveau” fine-dining restaurant. His lack of training, along with his youth, showed, and the restaurant led to his ruin. He ticks off his mistakes like a shopping list he’s determined to fill: “We had two-hour ticket times. There were failures on how the line was set up. I didn’t know how to deal with a chef who was going to the market with my checkbook and who didn’t want to talk to guests. The payroll was too high. And I was working with my wife, who is the boss of me everywhere, especially at home. But in the restaurant, she would snap at me when I was just trying to manage the place.”
It took three years for Wise to give up on this particular dream, and it cost him $1 million.
Not only did Wise go into serious debt after the closure of the fine-dining establishment, his relationship with his wife, who is now a hairstylist, became strained. So did the one with his mother-in-law, whose recipes for the cakes and pies at Scotty’s were the backbone of the pastry department. She wouldn’t disclose the recipes to him, holding them over his head. “She would make them all at her house, then I would have to pick them up and drive them around to the various Scotty’s restaurants.”
But thanks to the teachings of his father, who told him that can’t is a curse word, and his self-described “type A, OCD, first child, entrepreneurial” personality, Wise never gave up. Over the next eight years, he paid back every penny he owed, all the while continuing to build up Pots & Pans Production, the management company for Scotty’s Brewhouse, which has locations in Indiana, Florida, Illinois, and Ohio. The company also owns Scotty’s Brew Club, Scotty’s Dawghouse, and the Thr3e Wise Men Brewing Company, a family-friendly brewery-eatery.
Wise waxes philosophical about his journey: “The only thing that holds you back is yourself. Everybody has mistakes and failures. Name any CEO who hasn’t. … I was never a guy who was going to quit,” he says. “I look at the mistakes I made in those three years and I know I learned more than I did in the last 17. All those experiences I cherish, even though I wouldn’t want to go through them again or wish them on my worst enemy—but when your back’s up against the wall, that’s a test of your true character. And I know I’ll make more mistakes.”
When the recession hit in 2008, he had been leaning too much on credit and buying superfluously. As a result, when cash flow got tight, he couldn’t borrow and didn’t have money to grow. Instead, he found his way out of the hole by creating “management contracts” for Scotty’s Brewhouse, enabling others to put up the money and reap profits, while Wise retained the licensing of the name and recipes—including his mother-in-law’s cakes and pies, which are now made by a local bakery under a nondisclosure agreement.
But he also made plenty of pay-dirt moves, including debuting on beer-friendly college campuses and locating a Thr3e Wise Men Brewing Company site in his Muncie hometown, where he’s beloved.
Unfortunately, another test of his character was soon to follow: He came down with viral encephalitis, a brain infection that almost killed him. His recovery included months of seizures that precluded him from driving. “It was like I was 15 again,” he says. But in addition to feeling helpless, Wise also found a new sense of purpose.
He realized his workaholic tendencies made him neglect his family. “Now it’s family first, work second,” he insists. And he relishes the experiences he’s collected along the way, such as the Super Bowls he’s been able to attend and that time he threw the first pitch at a Cubs’ game. “You can be a glutton for punishment as long as you have passion,” he says. “But you also have to enjoy the journey.”
Most of all, he thinks God gave him another chance for a reason. Wise changed both “the scope of how I run the restaurants and the culture of the restaurants” by emphasizing a vision statement that combines philanthropy with pride in one’s actions. Every 90 days, he and his employees volunteer to “do good and donate mind, body, and soul” by working with soup kitchens and shelters, or building houses with organizations like Habitat for Humanity.
Around this time, Wise became involved with The Arc of Indiana, a trust that serves people with intellectual and developmental disabilities. The Arc approached him to install an anchor restaurant for a local Marriott and operate it as a training center, employing 25 percent of staff that is physically or mentally challenged. Wise found great purpose by doing so. “You know, not every [employee] has the heart that they should. Then you see these kids, who are so awesome. While other kids are complaining about tucking in their shirts, they’re skipping through the dining room because they’re so excited to wear a uniform. They cry when get their first paychecks.”
Wise noticed this particular restaurant had very little attrition compared to his others, and he says, “There’s a big brother/big sister effect. The bond in restaurant employees is already tight. Here it becomes even tighter.”
In fact, the program has been so successful that he instituted a new policy early this year: Company-wide, he aims to hire physically- or mentally-challenged personnel for 10 percent of his staff. After reaching out to groups like the vision- and hearing-impaired, he’s already up to 8 percent.
Although it wasn’t his intention, Wise’s insistence on “doing good in the world” has created a loyalty among his 1,400 employees that’s hard to match. But it’s also the little touches that keep his workers close to him. “I try to reach out to every new employee personally, at least by email,” he says. “If someone gets a compliment, I send it to them.”