🔒New leaders, partner structure and major tech investment move Max Hospitality restaurant group into future

Scott Smith and Steve Abrams are adjusting to a new normal.

As the new CEO and chief operating officer, respectively, of Max Hospitality — formerly Max Restaurant Group — it’s not only about readjusting to pre-pandemic customer traffic, but also acclimating to a daily routine without their longtime business partner, Rich Rosenthal, who retired earlier this month after 36 years.

Both Smith and Abrams had worked with Rosenthal since 1991.

“It’s a little daunting,” said Smith. “But [Steve and I] work with a great group of partners and that energizes me.”

Max Hospitality owns and operates 10 restaurants, mostly in central Connecticut, including popular brands like Max Downtown and Trumbull Kitchen in Hartford; Max Oyster Bar and Max Burger in West Hartford; and Max Fish in Glastonbury. It also has locations in Florida (Cooper Craft Kitchen & Bar) and Springfield, Mass. (Max Tavern).

As part of the transition, Rosenthal sold his company shares to Smith and Abrams, although he will continue to provide limited consulting on menu options and potential new locations. There are other equity partners in the group who help oversee individual restaurants, and collectively the ownership team has more than 200 years of industry experience.

The buyout deal was a year in the making, Abrams said, and initially stemmed from an offer from an outside party to purchase the Max family of restaurants.

“The terms of that deal were not going to work [as well] for our partners and Rich wanted to make sure they were taken care of in [any] deal,” Smith said.

Smith and Abrams were able to finance a comparable deal under which each of Max’s nine existing partners now own a proportional piece of all 10 restaurants. Previously, each partner only had an ownership interest in select locations they helped oversee.

Financial terms were not disclosed. Middletown-based Liberty Bank provided deal financing.

Building back

Smith and Abrams assume their new leadership roles following a two-year stretch that, Smith said, were the most challenging Max restaurants have faced.

The group’s Hartford-based establishments, Max Downtown and Trumbull Kitchen, were particularly hard hit first by government-mandated shutdowns early in the pandemic, and then by a Hartford-based workforce that largely went remote.

Weekday business for both restaurants dropped 90%, forcing Trumbull Kitchen to temporarily close. Collectively, Max restaurants received more than $4.4 million in Paycheck Protection Program funding, according to U.S. Small Business Administration figures, to weather the downturn.

As CEO, Smith’s immediate priority is getting all 10 restaurants fully stabilized and rebuilding a staff that pre-pandemic included roughly 900 employees, with more than half in full-time roles.

“We lost a lot of people through attrition during the pandemic and many went to different industries,” Smith said. “They’ve been difficult to replace.”

In part, that’s because the group is focused on finding candidates who exemplify hospitality, said Abrams, who also considers himself Max’s chief hospitality officer.

“One of the big lessons I learned from Rich about [creating a] business culture is not to accept mediocrity,” Abrams said. “From our front-house staff to our cooks and chefs, it’s about being hospitable and quality-minded.”

Another challenge for the restaurant industry has been the impact of the state’s gradually-increasing minimum wage, which will rise to $15 an hour by June 1, 2023.

Smith said he understands the need for a living wage to attract and retain staff. He noted that when competition for dishwashers, cooks and prep staff heated up, Max restaurants created a Kitchen Bonus program by adding roughly 50 cents to menu items, which was pooled and divided monthly.

“When [employees] get a bonus check at the end of the month, that really makes a big difference,” Smith said.

Tech investment

Despite the challenges, there were valuable pandemic lessons learned that are fueling changes.

One growth area, Smith said, has been takeout business, which was never a major focus for Max restaurants, but saw significant popularity during the pandemic.

Among the company’s more casual eateries like Max Burger and Savoy Pizza, both in West Hartford, takeout grew from about 2% of sales to nearly 25%, Smith estimated. Even higher-end locations like Max Oyster Bar in West Hartford saw takeout sales increase to nearly 10% of business — with third-party delivery services like Uber Eats and DoorDash contributing to that growth.

That has prompted Smith and his partners to upgrade their technology infrastructure, including point-of-sale, scheduling and inventory systems, to improve efficiency for employees and create greater convenience for customers.

For instance, orders through third-party apps like DoorDash previously needed to be manually entered into Max’s point-of-sale system, but now app-based orders automatically integrate.

The technology upgrades, which will be available at all Max locations within the coming weeks, are also helping accelerate the restaurant group’s in-house experience, too.

“It’s freeing up our servers to do more,” said Smith. “Before, a server would take a drink order, [go to] our point-of-sale terminal on the floor, punch in the order, wait for the drinks and then take [a customer’s] appetizer order.”

Now, using handheld tablets, servers can place the drink orders from the table and, while beverages are being made, start taking appetizer orders.

Even the bill-paying experience will be tech-enabled.

“Once the check is dropped, customers can scan a QR code and can pay the bill through the phone or Apple Pay,” Smith said. “They don’t have to wait for their server.”

Bullish outlook

Both Smith and Abrams said they are bullish on the coming year.

Business has been steadily growing back, particularly at the flagship Max Downtown location.

“Weekend dining has been higher than pre-pandemic levels,” Abrams said. “And weekday business has started to climb to normal levels, too.”

He predicts the trend will only accelerate as employees return to their downtown offices, and Max Catering is scheduling a steady book of business as venues see more activity.

While there are no immediate plans to expand to new locations, Smith said he and Abrams are approached often about potential sites.

Long term, Smith said he would like to see a Max location in Fairfield County.

“We’d want it to be higher-end to introduce ourselves to that market, but there are some great opportunities down there,” Smith said.

For now, he is content to continue the legacy that Rosenthal built over the past three-plus decades.

“Rich always emphasized that our food isn’t our product, our drinks aren’t our product, our product is our hospitality,” Smith said.