Inside Max Hospitality: Scott Smith on Leadership Succession, Partner Ownership, and Building Restaurants That Last

Anthony Codispoti (00:00)
Welcome to another edition of the inspired stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codaspote and today’s guest is Scott Smith, CEO and president of Max hospitality. They are a respected restaurant.

Scott Smith (00:20)
⁓

Anthony Codispoti (00:20)
and hospitality group based in Hartford, Connecticut. Founded in 1986, Max Hospitality is known for its diverse portfolio of restaurants, catering services, and unique dining experiences that bring communities together. Scott assumed leadership in 2022, taking over after founder Richard Rosenthal sold his shares. Over the years, Scott played key roles as vice president and chief operating officer, shaping the

Scott Smith (00:21)
. ⁓ .

Anthony Codispoti (00:48)
company’s culture and growth.

In December, 2024, he announced the addition of 11 new partners, showcasing his commitment to building a strong team. With deep roots in the greater Hartford area, Scott has guided Max hospitality toward innovation and continuous expansion. Now, before we get into all that good stuff, today’s episode is brought to you by my company, Adback Benefits Agency, where we offer very specific and unique employee benefits.

Scott Smith (01:15)
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Anthony Codispoti (01:18)
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To find out if your company qualifies, contact us today at addbackbenefits.com. All right, back to our guest today, President and CEO of Max Hospitality, Scott Smith. Thanks for making the time to share your story today.

Scott Smith (02:00)
My pleasure Anthony, nice to meet you.

Anthony Codispoti (02:02)
So Scott, how did you first get your start in the restaurant industry? What pulled you in?

Scott Smith (02:07)
⁓ an overabundance of energy and actually finding a place that I could ⁓ actually required a lot of energy was working in restaurants and I ⁓ I grew up in the shoreline here in Connecticut and worked in a number of places. ⁓ Seasonal places ⁓ clam restaurant, a seafood restaurant, ⁓ and that’s how I got my start.

Anthony Codispoti (02:29)
So was this high school was this college was this earlier later.

Scott Smith (02:32)
I

started washing dishes when I was about 13, 14 years old and yeah, it’s about the only thing I’ve ever done.

Anthony Codispoti (02:40)
Did you end up going to school for this or was this just okay, kind of brought up through the.

Scott Smith (02:42)
Yes.

Yep,

I did a two year stint at CIA, graduated in 1983 and then went on to do a apprenticeship at the Greenbrier and White Silver Springs, West Virginia.

Anthony Codispoti (02:57)
So CIA, not the Central Intelligence Agency, but the Culinary Institute. Yeah. And as you think of some of your career stops along the way, Scott, before Max hospitality, which one do you look back on and think, wow, this is really where I learned my skills. This was kind of the most formidable thing for

Scott Smith (03:00)
No, the same the same the same one. No, Colorado Institute of America, yes.

Boy, I’ll tell you, ⁓ there’s a whole variety of skills that it takes to manage in our environment. But I think that the one that ⁓ I probably learned the most ⁓ technique and line speed and, you know, as a cook was working at an overnight breakfast place in Scottsdale, Arizona. And I worked alone on the line. ⁓ then when it got busy in the morning, ⁓ you know, we really got challenged.

So, you know, I think I learned, I think I didn’t have great line speed before that, but after that I could cook with the best of them, so.

Anthony Codispoti (03:59)
And do you think it’s important for somebody who’s in restaurant management to have started at the beginning like you did washing dishes, line cook, et cetera?

Scott Smith (04:08)
Yeah, several of my partners have a lot of us have ⁓ culinary backgrounds and I would say the kitchen is probably the most challenging part of the business to run. The personalities, the techniques, the you know, just when you’re when you’re trying to make a decision on batch sizes of things and without that experience ⁓ in the back of the house, it’s very easy to be led astray and you know and not really know.

what ⁓ you know if you’re having a conversation with a chef about something really not know what they’re talking about. So I think it’s given me some credibility ⁓ and also ⁓ it is ⁓ you know it’s really an important foundation for management.

Anthony Codispoti (04:56)
Where did you first cut your teeth in the management side of the business?

Scott Smith (05:00)
Huh, I actually worked my first gig as a manager was working for a food service management company years ago running the food service for a law firm down in Washington DC. ⁓ And did that for three or four years before I wound up coming back to Connecticut and getting back into restaurants.

Anthony Codispoti (05:23)
And how did the opportunity at Max Hospitality open up?

Scott Smith (05:26)
⁓ Interestingly enough, ⁓ my old partner, Rich, had one restaurant when I met him. It was Max on Main. It was the first restaurant in the group. And he interviewed me to be the chef. ⁓ in Rich’s great wisdom, one of the things that he was always adamant about is that when he hires somebody for a challenging position like that, that they live within 20 minutes of the restaurant.

And I lived about 45 minutes away. So it ⁓ didn’t come to pass. But then about a year later, he was opening his second restaurant, Maximea in Avon, ⁓ and asked me to join with him then.

Anthony Codispoti (06:11)
join as a partner at that point.

Scott Smith (06:13)
No, no, I was actually kind of a consultant helping in the kitchen, helped get the restaurant open. then my ⁓ kind of second career was in systems and ⁓ data management for restaurants. And ⁓ I did that independently and Rich was one of my clients. So ⁓ we had that relationship after Maxime opened that I was ⁓ a consultant. He was a client. And then a few years later,

A few years after that, I came on board full time.

Anthony Codispoti (06:44)
Okay, so that first restaurant opportunity where he wanted you to be a chef, but you didn’t live within 20 minutes, when you said it didn’t come to pass, you didn’t end up taking that spot because you lived so far away.

Scott Smith (06:49)
Right.

He didn’t offer me the job. But we remained friends. ⁓

Anthony Codispoti (06:56)
Okay. All right. Yeah.

And so how did you get into the consulting side of things?

Scott Smith (07:04)
You know, I think this is going back 35 years. I’ve been with Max. We opened Max and me at 35 years ago and I just had an aptitude. I think for information that a lot of other people didn’t. It was easy for me to. Write recipes and understand how to translate translate invoices into data that could be usable information for restaurants and so.

I started a company, it was called Magdolian Management. I ran it out of Guilford, Connecticut and did that for ⁓ seven or eight years. I had a variety of clients. then Rich’s need ⁓ outgrew the size of my business. And so it made sense for me to join him full time.

Anthony Codispoti (07:53)
Okay, and then at what point did you become a partner, an owner, how did that unfold?

Scott Smith (07:59)
⁓ I guess that was about 25 years ago. ⁓ when the way Rich kind of grew the company is that he had ⁓ always had a vested partner managing the restaurant, somebody who actually put money in and then he had a group of outside investors. And then when he got to the second restaurant, he invited the manager from the first restaurant to invest in the second restaurant and so forth. So

All of my partners and I have had opportunities throughout the years to invest in all the new restaurants that we opened with Rich. And ⁓ my opportunity came ⁓ about 25 years ago when we opened Max’s Tavern at the Basketball Hall of Fame in Springfield. So I took out a business loan and actually dealt with the, ⁓ when we did the, not to jump ahead, but we did the Rich’s buyout. ⁓ I was able to go to the exact same banker.

that I got my first loan from. So ⁓ I borrowed money and then every restaurant that we opened after that ⁓ I participated in.

Anthony Codispoti (09:06)
And so how many restaurants are we talking about today?

Scott Smith (09:09)
We are 10 restaurants. have 10 restaurants, a bar, a golf simulator and ⁓ a catering business as well.

Anthony Codispoti (09:19)
Okay, so the restaurants, are they all unique concepts or do you have multiple of the same ones?

Scott Smith (09:27)
We have, why don’t I start at the top? We’ll go through all of them. Max Downtown is kind of our flagship restaurant. It’s a steakhouse that I would put against just about any steakhouse anywhere in the world. We really have a talented team there. Our hospitality is over the top. And Hartford has not been the most inviting or best place to operate a restaurant the last 10 or 15 years, but

Max downtown is doing a tremendous business. Then we have two seafood restaurants, Max Fish in Glastonbury, Connecticut, and Max’s Oyster Bar in West Hartford. And those are seafood ⁓ driven restaurants. ⁓ And all of our restaurants, one of the things that makes us unique is that ⁓ they’re very chef driven. ⁓

It’s ⁓ it’s not double speak. We’re driven by the front of the house in terms of the guest experience, but we’re also driven by the chefs in the back of the house because ⁓ we have found through the years that we get a lot more ⁓ out of our chefs who are able to put their name on things and say, you know, if I went and I said, you know, this is our Caesar dressing. I want you to make the Caesar dressing without him looking at it, agreeing that it’s the best Caesar dressing or maybe you can do this or maybe you can do that to it.

then it becomes his dressing. I think one of the things that we’ve been very successful at is ⁓ maintaining and retaining the staff that we’ve had for years and years, which is one of the most difficult things in the business. we’ve done that. So Oyster Bar is our highest volume restaurant. And then after that, we have Max’s Tavern at the Basketball Hall of Fame, which is a steakhouse. We have two burger concepts, Max Burger, those are the only ones that share a name and a menu.

We’re getting ready to open a third Max burger ⁓ and then we have Savoy ⁓ Pizzeria, which is a small wood fired pizzeria in West Hartford, Connecticut. ⁓ And then we have Trumbull Kitchen, which is ⁓ kind of a global. ⁓ You know global comfort food cuisine. We’ve talked about it. It’s right in downtown Hartford. ⁓

And then the catering businesses. then last year ⁓ we had some event space that we had a lease on in Springfield. And we found coming out of COVID that there really wasn’t the demand on that for large meetings like we had before. So we had some money to invest and we decided to turn it into a indoor golf facility. ⁓ we have nine golf days in there and ⁓ all the menu comes from Max’s Tavern.

And it’s a great little business.

Anthony Codispoti (12:22)
Yeah. So a couple of things I want to dig into there. ⁓ You mentioned that you guys have been pretty good at retaining staff in an industry that that’s not an easy thing to do. And part of what it sounds like is working for you is being able to involve the chefs, giving them ownership in different decision-making processes. What else have you done sort of, you know, whether it’s back of, you know, house or front of house to help keep other folks engaged and on board?

Scott Smith (12:33)
Mm-hmm.

Well, ⁓ the easy way is just, you know, ⁓ really to make sure that we’re paying competitively. And, ⁓ you know, and that’s, know, we’ve we’ve got we’re a 35 year old company with a lot of our managers and chefs that have worked for us almost for the duration. ⁓ And, you know, you kind of have to you kind of have to set an environment ⁓

both in terms of benefits and salary and just the working environment, that people don’t want to leave because everybody opening up a new restaurant knows, you know, I’m going to knock on the back door of Max’s and if I can get a guy from there, it’ll make my opening much better. So I think that we’ve got a better than average benefits package. We have 401k that we contribute to.

Anthony Codispoti (13:35)
They’re pretty good.

Scott Smith (13:48)
⁓ We do a 4 % match on the 401K ⁓ and you know we cover all the people that are on benefits. We ⁓ we participate in that and cover people’s families and. ⁓ So it’s. ⁓ You know, I wouldn’t say it’s a it’s a it’s a golden ⁓ benefits package, but in terms of restaurants, ⁓ you know it’s it’s more than competitive, so I think that’s it. And then.

You know, and I think that the real, the real other big factor is that, uh, you know, we, we want somebody to make a career with us. want them to work for us for 10, 20, 30 years. Uh, they got to have a life and you know, it’s a very demanding business. And so it’s very easy to like say, okay, well, I’m going to structure my kitchen with a chef and a sous chef and not have a third sous chef. And I’ll just make the chef and the sous chef work six days, you know,

And then the sous chef gets sick and the chef is pulling doubles and, you know, and you’re not, you’re not going to get, you’re not going to get a long career out of somebody if that’s the way that you treat them. So we’ve had, you know, while it’s been challenging to get staff, we have, ⁓ you know, we’ve allowed our restaurants to develop a team so that people can actually ⁓ take a night off, take a weekend night off and, ⁓ you know, and, and actually have a life, go to the kids ball game and.

⁓ whatever else that that’s always been important to us. And I think that our employees for the most part value that and understand it.

Anthony Codispoti (15:25)
Have you kept Rich’s rule of having to live within 20 minutes of the restaurant?

Scott Smith (15:30)
No, it’s very difficult to do that for the most part. But I would say that I’m within about 20 minutes of all of our restaurants now, so at least I follow it.

Anthony Codispoti (15:42)
So ⁓ thoughts on replicating any of your other concepts. You talk about the burger place. You’re getting ready to open up your third one. ⁓ What about some of the other concepts? It seems like that would be easier to kind of replicate an existing model than continuing to open up new concepts. But it takes away from the creativity part of it, too.

Scott Smith (16:02)
That’s just it. And I think that, you know, a lot of people in the restaurants take pride that, you know, the oyster bar is the oyster bar and the oyster bar isn’t Max Fish. And we’ve got two very talented chefs, one who has kind of a French classical background, another one who’s very inspired by Asian cuisine and

You know, so they’re able to. They’re able to express that on their menus and. ⁓ While we have some items that are in common, it’s ⁓ you know the the the the the restaurants are sisters, but they’re not twins and so. ⁓ I think that the. ⁓ You know the challenge and being able to recreate that is finding somebody who’s going to come in, because nobody is going to agree and come in and say, you know.

your pasta recipe is the best and I’m going to make that in my restaurant. and it’s been a challenge at Burger, because one of the things with Burger is that it is a chef driven burger chain, or burger restaurant. And we wanted to make sure that it was a place that other chefs wanted to come at the end of the night because it wasn’t just a bacon cheeseburger, that it was something with some braised short ribs or some guanciale or, know, ⁓

⁓ You know, really innovative fun ingredients ⁓ that make the food sing. So so it’s something that ⁓ it’s going to be a challenge as we as we continue to grow to be able to try to maintain that at some level. I think we’ve got to take some of that control back. We’re going through that right now with Max Burger, ⁓ but we just want to make sure that we have enough of the. ⁓ Space on the menu for the shaft of feel his identity there ⁓ and not.

you know, and not that it’s food that’s coming from me or it’s coming from the chef at Max Berger in West Hartford.

Anthony Codispoti (17:59)
Why do you feel the need to take some of the control back? Is it just trying to rein in food costs or standardized procedures?

Scott Smith (18:06)
Yes, and ⁓ it’s it’s we just, you know, I mentioned Caesar salads before and we just went through this process where, you know, we kind of had the same Caesar salad and all the restaurants and ⁓ we have a food committee and we travel around to the restaurants and we try and one of the things we realize is that our Caesar salads, while they’re good in all the restaurants, they’re not the same. And now the way, you know, and they were probably the same five years ago. And in the five years since then,

somebody has gotten a different dinner roll. So he’s using that to make croutons. Somebody ⁓ didn’t have any extra bread. So he’s buying a frozen focaccia to come in and make croutons. And then somebody says, well, I don’t like the powdered cheese. So I want to use ⁓ more shredded ⁓ Parmesan on it, ⁓ which doesn’t make a great salad. So all these little decisions are kind of, there’s just an erosion. They’re not bad decisions. They’re kind of the decisions that

If I were the chef of a restaurant and I want to improve things or change things or put my thumbprint on it, I would probably be making those myself. But if it’s going to be called a Max’s Caesar salad, it’s got to be a Max’s Caesar salad. If it’s not going to be a Max’s Caesar salad, we’ll call it something else. There is lot of efficiency in terms of purchasing from the same vendors.

⁓ When you have, you know, a set ingredient and instead of buying two times one restaurant, you’re now buying three times one restaurant and there’s great value in that. So keeping everybody in tune with that is important. And then it’s just, you know, in terms of being able to move staff, know, the restaurants are still going to be pretty close to one another. So we have a manager that’s going to move from one spot to another to help out for a shift or we’re going to have a cook that’s going to go help.

it’s very important that ⁓ they’re stepping into an environment that they’re familiar with and not having to learn a whole bunch of new things.

Anthony Codispoti (20:07)
And aside from the one that’s the location that’s at the basketball Hall of Fame are all the restaurants in the Hartford Connecticut area.

Scott Smith (20:16)
Yeah, and that’s probably 25 minutes from downtown Hartford, ⁓ Springfield and then Russell and Long Meadow, Massachusetts, which is about five miles from Springfield.

Anthony Codispoti (20:22)
Okay.

it. You mentioned that Hartford has not been maybe the most welcoming or easiest place to run restaurants lately. Why is that?

Scott Smith (20:38)
Well, know, Hartford is a insurance city and, ⁓ you know, going through COVID, we had, you know, full, I wouldn’t say full, always full offices and ⁓ the like, but when people stopped coming to the office five days a week, that certainly hurt us. And ⁓ so in ⁓ one of the buildings that our restaurant, Max Downtown is in, ⁓

I think it’s 36 stories and right now it’s about 30 % occupied. know, they’ve the they’ve the tenants of ⁓ they don’t need as much space because they’ve got a lot of people that are still working remotely. ⁓ So that’s been a challenge and I think that the. ⁓ You know, Connecticut is ⁓ has has a good thriving economy. I think it’s got a very wealthy segment of the population, but there’s also a very blue collar. ⁓

⁓ element in certain parts of the state that I think have been ⁓ really hurt by ⁓ changes to the economy and probably didn’t come out of COVID ⁓ as healthy as we did.

Anthony Codispoti (21:49)
Yeah, as you know, we’re recording this in late 2025. And I’m curious, have you or are you thinking about making modifications to your menu to help bring prices down to make it more accessible for folks as the economy is kind of struggling?

Scott Smith (22:05)
Yeah, you know, I think when we start to see it reflected in our sales, we do a little bit more in terms of value menus, ⁓ you know, a prefix menu, maybe a three course menu that, ⁓ you know, we have are able to kind of dictate the items that are available for this deal. And people take advantage of it. So happy hour is very, very popular with ⁓ in most of our restaurants. ⁓ You know, it.

drives the people in the restaurants a little bit crazy because you know you got all these people coming in and eating for five dollars you know instead of coming in and paying 25 or 30 dollars for a full entree but to me it’s it’s you know it adds energy to the restaurant and it probably brings some to the restaurant to dine who wouldn’t otherwise dine and you know if they like it for that that’s great and it’s going to be their wife’s birthday at some point in time and they’re probably going to come back and you know try us so

Anthony Codispoti (23:03)
You know those happy hours, are they a bit of a loss leader? Are you still making up for it on people buying drinks and whatnot?

Scott Smith (23:09)
⁓ Alcohol is very very profitable, so and it’s also one of the easier areas for us to be able to control just in terms of like watching the inventory and you know over pouring and you know so we have a we have a very tight bar program. So if we have to discount food in order to be able to get people to come in and buy drinks, ⁓ it’s a win for us. ⁓ It’s a little bit more difficult in Massachusetts because Massachusetts. ⁓ If you have a.

Discount if you offer a discount on a drink in Massachusetts You have to offer for a full week. So you can’t just have it between four and six. Yeah Yeah, so we do a little bit more with food up there Yeah

Anthony Codispoti (23:52)
interesting. Is that

a law that’s been on the books for a long time? Is this sort of one of those old blue laws?

Scott Smith (23:57)
I think so for as long as there’s been laws. I don’t understand it, but right.

Anthony Codispoti (24:00)
Okay. Trying to protect us from ourselves.

So what’s behind the name Max?

Scott Smith (24:07)
⁓ Max was our founder Rich’s ⁓ grandfather, maternal grandfather, and ⁓ his last name escapes me right now. ⁓ But anyway, he ⁓ was a candy man in Hartford. I think he worked for Schraff’s or something, but he used to go around to all the pharmacies and newspaper stores and ⁓ sell candy to them.

and ⁓ made an honest living. I believe he was an immigrant. when Rich opened, Rich really admired him. And when he opened his first restaurant, ⁓ he named it after Max. So it was Max on Main. everything, just about everything in our company has Max attached to it.

Anthony Codispoti (24:52)
What a nice trivia and then as we mentioned in the intro you recently brought on 11 new partners Is this kind of borrowing from the structure that rich use when opening new restaurants, or how does this work for you guys today?

Scott Smith (25:07)
Yeah, you know, was a really good decision, I think, on our part. ⁓ we knew a lot of us are ⁓ aging. We’re all aging. But me and most of my partners are in our ⁓ late 50s, early 60s. And ⁓ we have this whole generation of people that are incredibly dedicated to our business who work extremely hard.

And we wanted them to know that they had a future beyond just a week-to-week paycheck. And so we had to make modifications to our operating agreement. And we were able to go out. We actually bought out some of our old outside investors to be able to get some equity for them. 11 of them

opted to buy in. they went to the bank or they went into their retirement savings or whatever and put money in. so now we are instead of eight, we are 19 partners.

Anthony Codispoti (26:14)
Okay, so are these mostly chefs? Other manager type roles?

Scott Smith (26:20)
⁓

Several chefs, ⁓ mostly I would say front of the house managers, ⁓ our HR director who’s ⁓ incredibly valuable to the company and I find ⁓ indispensable. joined our partnership group. ⁓ So, you know, it’s a good mix. And I think that, ⁓ you know, it’s kind of guaranteeing that the… ⁓

the makeup of the management of the company 10 years from now is gonna be people that have a significant experience in the business with us who understand our culture and who have, you know, kind of ⁓ made their careers with us.

Anthony Codispoti (27:03)
Interesting. how does bringing in so many new partners, obviously they’re holding some kind of a minority stake, but how does that change your approach to day to day operations or making bigger decisions?

Scott Smith (27:18)
It’s a little bit more of a democracy than it was before when Richard’s running the company. ⁓ but you know, it’s all their input is, is incredibly valuable. There’s, I have as much to learn from them as they do from me. And I think that my partners feel the same way. So ⁓ we do have ⁓ partner meetings twice a month now. We used to have them once a month and, ⁓ you know, and it’s very important for us to hear what they have to say.

and for them to feel valued in their jobs, just not for coming in and running the restaurant, but for steering the company. ⁓ So there’s a senior management ⁓ aspect to our board. ⁓ And we’re, I would say the main decision makers, but ⁓ we don’t just do things unilaterally without consulting all of our partners to make sure that we’re making the best decision for all the restaurants.

Anthony Codispoti (28:16)
What’s a surprising challenge that you’ve run into with this new expanded structure of more partners?

Scott Smith (28:23)
you know, I think they’re, ⁓ it hasn’t been quite a year and, ⁓ they’re all getting used to the fact that, you know, and we laid out what this partnership was going to look like and how this investment historically has worked with us. And we, gave them all that, you know, that information and, ⁓ they’re all realizing, I think everybody’s understanding now that there’s a little bit more to it than.

You know, just having the equity stake and ⁓ when we opened our new restaurant in Avon. A couple months ago, you know it required a huge amount of cash and we do our profit distributions four times a year and because of the amount of money that we had tied up in the new restaurant or just opened, we decided to hold distributions back ⁓ and not do distributions that quarter. And I think that was a little bit of a shock. ⁓ You know.

for some of them. ⁓ I think we probably communicated it, but I’m not sure that we communicated it loud enough or they heard it the way that we meant it. ⁓ But again, I think it’s something that me and my partners, ⁓ the senior partners feel very strongly about. My first investment at Max’s Tavern, ⁓ I don’t think I saw a dime of that for about three years. It took us a while to get profitable. ⁓

You know, so it’s, you know, there’s tax changes for all of them. The way that they’re getting paid is a little bit different. But it’s very healthy. And overall, it’s very healthy for the company.

Anthony Codispoti (30:01)
Yeah. Well, and I imagine they’d be even more surprised if they were involved in a cash call. Maybe that isn’t happening because of lines of credit or whatever other mechanisms you have in place, but ⁓ that’s a rude awakening for a lot of folks in their first time and being an equity partner in something.

Scott Smith (30:06)
Yes.

Yes,

and that’s one of our challenges in this environment. This new group is how we raise money moving forward to open new restaurants. We’ve been able to find some very generous landlords that have allowances for us when we were building out a restaurant, so that helps a lot. We try very hard not to. We’ve got a great relationship with our bank, so we do have funds available.

So we haven’t gotten to the point yet where we’ve had to go out and do a cash call. I don’t think we’ve ever done that ⁓ in our history. Yeah.

Anthony Codispoti (30:53)
That’s impressive. You know, as I think back to your history with ⁓ Max Hospitality Group, came in, you know, as a consultant, you came in full time COO, now CEO. In, you know, all the years that you’ve been with the group, how is your perspective on what makes a restaurant successful evolved over time?

Scott Smith (31:17)
Wow, that’s ⁓ going way back. I told you I was an apprentice at the Greenbrier in West Virginia and we’re actually. ⁓ They’re having in February. They’re having the 50th anniversary of the ⁓ apprenticeship program. So me and a bunch of my fellow apprentices are going back. I’m really looking forward to seeing him, but I was going through some of my old stuff from that and one of our projects that we had as apprentices was writing menus, restaurant menus.

And I had kind of come out of, though I worked on some shoreline restaurants, I had spent a lot of time working in hotels ⁓ and hotel fine dining and things like that. And I look at the menus that I wrote 35, 40 years ago. They were horrible. It was all about creativity. was all, and it’s, I were to take any one of those menus and put it in one of my restaurants now, we’d be out of business. ⁓

Anthony Codispoti (32:15)
because you didn’t have the

financial acumen that you did.

Scott Smith (32:17)
Yeah, well,

and not only that, but one of the things that I think me and all my partners really learned from our founder, Rich, is you got to write a menu of things that sell. you can stick your nose up in the air and say, I don’t want a hamburger on my menu. But guess what? People come to the bar, they want a hamburger. And so it doesn’t matter how fine dining you are. know, gild the lily a little bit and do a fog rod on your hamburger and charge $29 for it, but have a hamburger.

And ⁓ so, you know, so I think that ⁓ we’ve all learned that there’s a there’s got to be a balance between the creativity and what you want to make and what people really want to eat and and ⁓ and buy. ⁓ You know, it’s it’s actually much easier in Italian restaurants, I think, ⁓ in our Italian restaurants, because there’s just so much good food. There’s just such a variety. And you can make a little tweak here and there with some of the ingredients, but

⁓ Our new restaurant, ⁓ I would say we’ve got like six or seven, eight pastas on the menu and they’re all fresh made, but they all have their roots in something very traditionally Italian. It’s not just a little of this and a little of that. ⁓ It’s been very successful and a good learning experience for all of us.

Anthony Codispoti (33:42)
What’s something surprising you’ve come to understand about human psychology from all of your restaurant roles?

Scott Smith (33:51)
Hmm. The value of a discount, think is something and I think that we’ve had to be very judicious ⁓ in our history about how we use discounts because ⁓ if you discount too much, you kind of establish a new price that people come to expect and you

If every Thursday is half price bottles of wine and we don’t do that anymore, but we pre COVID we did it. And those people that want to go out and have a bottle of wine are just coming on Thursdays. So, you know, so it’s, that’s, that’s something that, you know, and it’s something that I think that my partners all the time, they, you know, they see, have a slow Friday night coming up and they’re like, we got to do a lobster promotion. You know, let’s, let’s do it for $25.

Actually, I might be the one who’s saying let’s do it for $25 to really draw people in. you know, it’s only going to have, there’s only going to be so many people that it’s going to be able to draw. you know, and again, you just, want to make sure that the prices that are on your menu and your wine list and things like that are the prices that people expect to pay. You know, they’re fair prices.

We’re neither the most expensive nor the cheapest in the market, but a lot of thought goes into how we price them. So when we discount them, we have to be very careful about it. So that’s one lesson that I’ve learned.

Anthony Codispoti (35:21)
And so when you say be very careful, just not do it with any regularity, is that the sense?

Scott Smith (35:25)
Right, well,

yeah, and ⁓ you know, and I think that the ⁓ you don’t want that to be. You don’t want to establish that that’s ⁓ what somebody’s expectation is for coming into the restaurant. You want people to come to the restaurant for great food. It’s a great environment and every once in a while it’s it’s discounted great, you know.

Anthony Codispoti (35:48)
What are some upcoming trends that you’re keeping an eye on in the restaurant industry?

Scott Smith (35:54)
Wow. ⁓ You know, I think that ⁓ we’re hearing from a lot of our vendors, ⁓ equipment and food vendors, that a lot of the challenges that some of our competitors and other people in the industry are finding with ⁓ help are really ⁓ forcing people to relook at buying pre-prepared items, know, cut vegetables, ⁓ know, ⁓ a braised short rib or something like that.

We haven’t really gone down that road. ⁓ know, everything in our restaurants is ⁓ from scratch. And, ⁓ but it’s, you know, it’s something that I’m keeping an eye on. And I think all of my chefs and partners are keeping an eye on because I think there is going to come a point in time where we’re, know, whether it’s because the hourly wages are just, you know, have gone up so much and ⁓ in relationship to what we can charge for something on the menu. But, ⁓

There’s a lot of convenience ⁓ items out there. There’s a lot of convenience ⁓ equipment. And again, we’re just kind of scratching the surface, but it’s something we’re keeping an eye on that I think the future of the business is going to be, ⁓ it’s definitely gonna be a factor. ⁓ We’ve also started using, ⁓ I’ve been using AI a lot more.

just for, just going into chat GPT and asking it a question. ⁓ It helps organize your thoughts and things like that. So that’s something I’m very excited about, the future of and seeing that develop and see how we can incorporate that a little bit more into our businesses.

Anthony Codispoti (37:39)
And so currently you’re using AI more as like a brainstorming partner or is there more of a structured way that it’s helping you to analyze data or something else?

Scott Smith (37:43)
Yes.

Well, a lot of our enterprise reporting tools now have AI functions. So, you know, it used to be that you’d have to go, you know, if you wanted to find how much salmon you sold, you’d have to go through this long sales report and, you know, pick out all the items that add salmon. ⁓ And now you can go in and you can just ask the question in these tools. ⁓ so ⁓ they’re very helpful. I also think that ⁓ one of the things that I look forward to is ⁓

⁓ how that’s going to impact, ⁓ scheduling, you know, being able to look at sales trends. Cause that’s something, ⁓ the, scheduling tools and our sales tools are integrated right now. So you’re looking at kind of a forecast and things like, thing like that. But I got to believe that there’s a tool that’s going to take into, ⁓ take into account, ⁓ you know, this Saturday, ⁓ from 2025, what the weather looked like in 2025 that Saturday, what were the other events and you know,

and help us come up with a ⁓ better tool for forecasting and planning out our labor.

Anthony Codispoti (38:54)
Yeah, that would be really cool. Very effective. The labor issues that you have mentioned, I’m going to guess kind of kicked off ⁓ because of COVID and then maybe have gotten worse because of some of the immigration policies. Is that correct?

Scott Smith (39:09)
Yeah, COVID definitely had a bigger impact on us. We had a lot of people that, I think our industry had a lot of people that went to other industries. We’re seeing a little bit of people coming back now, somebody who worked for us five years ago, who, know, the pasture wasn’t quite as green, it’s another coming back. you know, being a server in a restaurant is great because you can usually, you can work for 30, 32 hours a week and make

You know, $1,200, $1,500. And, you know, so if you’re a parent, if you’re, you know, you have another part-time job somewhere, you’re a student, it’s a great way to make a living. But, you know, we are seeing with increases to minimum wage and also the cost of benefits just keeps going up, you know, no matter what we do in terms of our employee base and our claim history.

⁓ We have a great year, our claims are at a low percentage compared to what our premiums are, but we still see every year the premiums go up and go up and go up. And we share that cost with our employees. I’d like to say that ⁓ it’d be stupid to say that we can afford it because we should really be looking at everything. But the real pain of that is that ⁓ the employees have to burden part of that as well.

Anthony Codispoti (40:38)
⁓ Let’s see, where do I want to go next here? We’ve covered a lot of good ground. How about a big serious challenge that you’ve had to overcome in your life, Scott, and some things that you learned going through it?

Scott Smith (40:48)
boy. ⁓ You know, think ⁓ relationships with the people I work with, my family, ⁓ and ⁓ you know, just just working with people in general has ⁓ to me, ⁓ you know, I’m not a particularly social person. ⁓ And, ⁓ you know, I don’t gravitate, you know, towards the to be the center of attention.

⁓ My partner who we bought out, Rich, was much more dynamic and had this big personality and kind of took over the room when he came in. So in terms of that, think people had some expectations for me and I had some big shoes to fill. But I’ve had to find other ways to kind of fill them. I’m serious about the business and I think ⁓ it’s…

It’s been a gift to have the number of people that work with me that are also as very serious about the business. you know, huge challenges is, you know, that there are people that you bring in, you expect to be serious, you expect to be very talented and driven and committed, and they’re not. And the damage that that can do to a business is huge.

Anthony Codispoti (42:06)
What was it like for you going through that transition of stepping into Rich’s shoes and just being a different person with a different approach to things?

Scott Smith (42:15)
Yeah, you know, I was worked with Rich and I was the chief operating officer for 20 some odd years before all this happened. you know, Rich to his credit, I think was even before COVID was starting to step back a little bit and was spending more time in Florida. And ⁓ but, you know, still still very involved in the business. And I think that, you know, so I had an opportunity to really

study for the role and train for the role under him. ⁓ I mean, there was nothing organized that said, know, this is, this is, you know, this is how I’m going to transition the company. It all just kind of happened. And that in and of itself is an interesting story. But, ⁓ you know, it’s, ⁓ it’s been, it’s been good. And I think that the, ⁓ you know, I think that the ⁓ expectations of my partners ⁓

You know, they kind of I think that they all expect ⁓ whoever’s in that role to be, you know, have riches, personality and stuff like that. And so that’s been a little bit of adjustment, but it’s it’s been four years. And so I feel pretty comfortable in the role now.

Anthony Codispoti (43:29)
In the early days, did you feel any pressure to try to adjust your personality to be more similar to what Rich’s style had been?

Scott Smith (43:39)
Now, now I didn’t really feel that. I think that, you know, ⁓ Rich, again, you know, there’s there’s all different aspects to a big personality and Rich, ⁓ you know, he he was known he could roar like a lion when he really needed to and, ⁓ you know, walk in and and, you know, see something out of place and make sure he had everybody’s attention about that. I’m a little bit more subtle. ⁓

And I think there’s a way to get the message across differently. ⁓ And my coaching to managers is like, ⁓ find your style, find your way. You don’t necessarily have to emulate ⁓ that style. It’s just the style that works for somebody else.

Anthony Codispoti (44:26)
You mentioned that ⁓ the story of how the transition from rich to you came about was an interesting story. Can you elaborate?

Scott Smith (44:36)
Yeah, I’d love to. ⁓ So, ⁓ you know, we had been building this company for rich for 30 odd years, and ⁓ the only one who seemed to have any path out of the company was rich. And so, you know, I had invested a lot of money, a lot of my partners had invested money in their business, and none of us really knew what the next step was. And then COVID hit.

And ⁓ Rich was actually in Florida when ⁓ COVID hit and couldn’t get back to Connecticut. So it really gave me and my partners a chance to feel independent. you know, while we were still on the phone talking to Rich all the time and, you know, figuring out, and we did so much during COVID just in terms of like setting up, you know, ⁓ pantries for people to get food from and, you know, getting ⁓ stuff from our vendors so that

you know, people in the industry could be taken care of. You know, we our restaurants were closed for six, eight weeks. We had some that took even longer to close and ⁓ all of the PPE money ⁓ hadn’t come in yet. And ⁓ so we were just, you know, we doing everything we could to really hang on to our staff. But anyway, ⁓ as we started to come out of it, ⁓

We had somebody who approached us about a restaurant in another city. ⁓ He actually owned the building and he asked us to go and take a look at the restaurant. And he, ⁓ the deal he laid out for us was that he would build the restaurant and we would be 25 % partners and he’d be 75 % partner. So Rich didn’t really like that. And so we started like looking around the market and was like, we could open a restaurant down here. Let’s, you know, let’s try to find another one. And we found out a, ⁓

another ⁓ small chain. had four restaurants in the ⁓ Fairfield, Westchester County area ⁓ that somebody had told us was available. So we went and took a look at them. And this guy with the building was very interested in the restaurant business. He was a great customer of ours. And he said, let’s buy them. You know, let’s figure something out and let’s buy them. So, you know, we’re scheming really, you know, this is going to be great. And ⁓ and then one thing led to another.

And ⁓ he decided that instead of just buying this outside chain, why does he just buy Rich out? And so ⁓ they talked about it and they had some very good conversations. ⁓ this person is still a friend of ours, put together an LOI. Rich bought it to his attorney.

You know, me and my partners are like, this is great. This is our, this is our chance. Now we’re going to be able to like figure out what our future is. We’re to be able to figure out, you know, what the company’s worth and how we get out and all this other. And, ⁓ anyway, the deal just fell apart. It fell flat apart. And, ⁓ so my, ⁓ partner, Steve and I, were talking the next day and I was like, God, you know, we’re so close and this is, you know, this is, this is really going to be our ticket. And, ⁓

So I said to Steve, I said, why don’t we do it? Let’s figure out a way that we can do it. can, you know, we’ll go to the bank and we’ll raise some money and we’ll make Richard an offer. ⁓ so we, ⁓ and we had, we had some money in the bank and part of my, part of my scheme was to use the money in the bank to buy rich out, but Richard was very clear that was his money. Right. Right. Right. So, ⁓ so anyway, we, we made the offer to him.

Anthony Codispoti (48:16)
The money that was in the company’s bank account. Yeah

Scott Smith (48:23)
And he’s like, are you guys frigging crazy? He said, you want me to go for this? And, know, he ended up ⁓ screaming at us and telling us, get back to work. And, so it was, you know, we were all deflated and we thought that was the end of it. The next day, Rich calls me and says, how about this? Why don’t we try this? Yeah. Yeah. And well, I think his appetite had been whetted.

Anthony Codispoti (48:46)
So he was intrigued by the idea of stepping aside, yeah.

Scott Smith (48:52)
⁓ by this other person who made the offer and, you know, and I think he was spending time in Florida and on the golf course and whatever else, you know, he started to get a taste of what retirement would be like. And, ⁓ so we, ⁓ the bank was, we w was great to work with. and, we restructured the company. we were all separate LLCs before we created max hospitality LLC and all the restaurants are now sub LLCs.

And ⁓ all of our partners before had different percentage of ownership. And when we did the new structure, ⁓ everybody has the same percentage of ownership of everything. So ⁓ it’s a little bit fairer.

Anthony Codispoti (49:37)
And how quickly then from the point where he calls you back says, how about this structure? Did things actually get turned over to you?

Scott Smith (49:47)
Boy, took us, ⁓ it probably took us six months to write the operating agreement and the sales agreement going back and forth. But I think once that was done and the money was in place, it happened pretty quickly. So I would say it was about six or seven months.

Anthony Codispoti (50:03)
Yeah. And we sort of touched a little bit on COVID. What was that like for you guys going through that?

Scott Smith (50:10)
⁓ It was frightening, you know, and I had I actually had went into the hospital for an elective procedure the last day that they were doing elective procedures in the hospital. And, you know, just to see what was going on in the hospitals at that point was crazy. And then the procedure had to get redone. And the first day that I was able to get it done was the first day that the hospitals were doing elective procedures again. ⁓

So, ⁓ you know, I got a little bit of a perspective of how really devastating it was to families and, you know, the people in the medical community that were doing all this stuff. ⁓ But, you know, it’s, it’s, was very eye opening that, you know, and, and not something I’m really proud of, you know, is one of the reasons that I think we wanted to get the 401k put together ⁓ under the new structure is that, you know, there are just so many people that live paycheck to paycheck.

⁓ Not just in our industry, but in so many industries and so when all of a stores were closed and schools were closed and you know it caused a lot of concern ⁓ and then as we started to loosen up. And they ⁓ we got another takeout business very fast, you know, which was difficult and some, you know in.

Restaurants were recharging $65 for a steak. doesn’t. Not the first thing that comes to your mind when you’re thinking about takeout, but our customers were hungry for it. So we did that very successfully and then we had. ⁓ You know they allowed 25 % capacity in the restaurants and so we went out and ⁓ our director of operations Brian. We bought you know plexiglass and these stands and you know we were putting plexiglass barriers up everywhere. ⁓ But you know. ⁓

As things started to really loosen up ⁓ and people came back ⁓ full time, you know, I think we, the core of our staff was much stronger than it had ever been. Cause we had kind of gone through it, through it all together. ⁓ But we had, we had, we really had to ⁓ hire and train, you know, we we’ve had the gift of having very low turnover for years and years in the restaurant. So.

⁓ you know, and it’s, it’s very easy when you have a new server that you’re bringing on to train with a veteran server. And when all of sudden you’re vet, you need your veteran server in a big section and you don’t have somebody to train that new server, that becomes a challenge. So, ⁓ you know, so kind of retooling our staff, ⁓ coming out of it was hard, but, ⁓ you know, it’s, ⁓ we kept our heads on and, ⁓ you know, we, we came out stronger than, than we were when we went into it. So.

Anthony Codispoti (53:03)
So you mentioned introducing the 401ks and you mentioned, you you guys all walk through this fire together and that really bonds people, you know, being stronger together. Were there any other significant operational changes that you’ve kept now being on the other side of COVID?

Scott Smith (53:21)
We’re a little bit stronger in takeout. I think that ⁓ we learned a lot about the third party delivery services, Uber Eats and DoorDash and things like that, and where they were kind of our lifeline. ⁓ And we were doing a lot of sales as we transitioned back into people coming back into the restaurant. And we had that line of revenue. ⁓ We realized how expensive and how damaging it was to us to try to maintain that.

⁓ So that’s something that ⁓ we had to adjust. ⁓ But you know, there’s been minor adjustments. have larger outdoor seating areas and a couple restaurants as a result of it. And the state loosened up on ⁓ takeout liquor. You couldn’t take liquor out of a restaurant before, and now you can take liquor out of a restaurant.

Anthony Codispoti (54:13)
⁓ the

So you made some changes, you realized how hard and how damaging those third party delivery services were. Does that mean you’ve gotten away from those?

Scott Smith (54:28)
For the most part, have, ⁓ know, it’s restaurants, you run tight margins in restaurants and, ⁓ you know, on a really good month in, say, our burger restaurants, we’re lucky to do 10, 12%. And we were paying, you know, a significant portion of our sales, in some cases, like 15, 20 % of our sales. And the fees, the third party delivery fees were 28, 30%. And so,

⁓ We’re still using them at our pizza restaurant because our margins are a little bit better. ⁓ But ⁓ yeah, it did not make economic sense to continue it in a lot of our restaurants.

Anthony Codispoti (55:10)
And so people still do takeout, they’ll come and get it themselves. Okay.

Scott Smith (55:13)
Yes.

Anthony Codispoti (55:16)
Scott, how would you characterize your superpower?

Scott Smith (55:20)
My superpower? Well, it’s changed a lot ⁓ as I’ve gotten older. I’m 64 now ⁓ and I require a lot more sleep than I did 10 years ago. ⁓ But I ⁓ used to be able to thrive on four hours of sleep. it’s one thing that everybody always remarks, that they’re getting emails from me at four o’clock in the morning. ⁓

So I think it’s changed, you know what, my energy and my focus, ⁓ you know, is on my business. you know, so ⁓ I’m just getting a little bit more sleep than I used to.

Anthony Codispoti (56:00)
Okay, what’s your favorite thing to do outside of work?

Scott Smith (56:04)
boy, I took up golf two years ago and ⁓ yeah, just ⁓ I did not have the time before and I’m really enjoying that and I’m a bit of a crossword puzzle addict. So I do several crossword puzzles every morning before I get going so.

Anthony Codispoti (56:07)
Two years ago.

Old style like in the newspaper or do you have an app?

Scott Smith (56:21)
Now on

the app, New York Times has a great puzzle app and I do the LA Times and so.

Anthony Codispoti (56:28)
And how far are you able to get through a traditional crossword puzzle? You finish them all, you get them correct? How many times do you go to Google or chat GPT to help with an answer?

Scott Smith (56:33)
I finished them all. yeah, yeah, I got a strike.

You don’t need to go that often. There’s some that are a little bit more obscure. ⁓ It’s usually like a modern rapper whose name I don’t know or something like a TV show that I’ve never heard of that some star from. ⁓ I may peek on that. It’s just ⁓ a whole other language and once you understand the language, it’s pretty easy.

Anthony Codispoti (57:08)
Okay.

Well, Scott, I’ve just got one more question for you today. But before I ask it, I want to do three things. First of all, anyone who wants to get in touch with Scott, you can reach him at his email address, scott at maxhospitality.com. And maxhospitality.com is also where you can go to learn more about all their restaurants. And as a reminder for folks, if you want to get more employees access to benefits that won’t hurt them financially, and carries a financial upside for the company, reach out to us at adbackbenefits.com.

Finally, if you’ll take just a moment to leave us a comment or review on your favorite podcast app, you’ll hold a special place in my heart forever. Thank you. So last question for you, Scott. A year from now, you and I reconnect and you are celebrating something big. What’s that big thing that you hope to be celebrating one year from today?

Scott Smith (57:57)
Good question. ⁓

You know, think the ⁓ continuing the tradition of having ⁓ profitable restaurants and, ⁓ you know, a thriving, a thriving staff, you know, a strong place for, ⁓ you know, people to come to work and feel valued. ⁓ you know, I don’t know if there’s any.

One large thing that we’ve done, the restaurant that we just opened in Avon was a big investment for us and it’s doing very well. So I hope to report a year from now that it’s still doing just as well. ⁓ But, you know, it’s a lot about business is just really being able to maintain and, ⁓ you know, and every year, every year you get into it is kind of a victory over, you know, the previous year or so.

Anthony Codispoti (58:45)
Scott Smith from Max Hospitality. want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Scott Smith (58:52)
Great, thanks, Anthony. It’s been great.

Anthony Codispoti (58:55)
Folks, that’s a wrap on another episode of the inspired stories podcast. Thanks for listening with us today.