Scotty’s Brewhouse founder negotiating to sell stake in chain

The founder of Scotty's Brewhouse is negotiating to sell a stake in the Indianapolis-based chain of eateries to a private-equity firm that plans to take the brand international.

Due North Holdings of Scottsdale, Arizona, is set to purchase at least a share of Scotty’s Brewhouse, according to sources familiar with the deal. The chain operates 14 restaurants.

Owner Scott Wise declined to discuss the acquisition, and Due North didn’t return a phone call seeking comment on the deal.

But without naming Due North, Wise mentioned in a taped segment about entrepreneurism that aired Thursday on WISH-TV Channel 8 that “they want to take us from 20 restaurants to about 200 restaurants for the next four years, including overseas growth into Japan.”

Due North operates and franchises restaurants in the quick-service and family-dining sectors. The company in March announced a partnership with Tokyo-based Hotland Co. Ltd. called Pacific Restaurant Partners.

Plans call for franchising quick-service restaurants in the United States and Canada that are a combination of Hotland's concepts and the partnership’s new brands developed internally and through acquisition. Pacific Restaurant Partners plans to open 1,000 restaurants by the end of 2020 through acquisitions and organic growth, the announcement said.

Hotland’s holdings include Cold Stone Creamery and Coffee Bean and Tea Leaf in Japan.

It’s unclear what Wise’s role would be going forward in the chain of restaurants he founded 20 years ago.

Wise was an inexperienced 22-year-old when he opened his first restaurant in Muncie in 1996, with financial backing from his father, after graduating from Ball State University.

He built a second Scotty’s, in Bloomington, followed by another, in West Lafayette. Overall he has grown the chain to 14 locations, all in Indiana except for a lone outpost at Punta Gorda, Florida.

His properties include a Scotty’s Dawghouse on the Butler University campus and a Scotty’s Brew Club in Franklin.Wise also developed two Thr3e Wise Men brewpubs in Broad Ripple and Muncie. It was unclear Monday whether they would be part of the deal with Due North.

Scotty's Brewhouse entered the Indianapolis market in 2009 by opening downtown at Allen Plaza at 1 Virginia Ave., and on the north side at 3905 E. 96th St. The expansion represented quite a leap for Wise, taking him from the college-town niche that Scotty’s fit so well to a major metropolitan market.

Wise, however, has experienced a few stumbles along the way. He lent his name to upscale burger joint Scotty’s Lakehouse near Geist Reservoir and a sister restaurant in Columbus, which his team operated for two years under a management agreement with another restaurant owner. Those locations closed in late 2012 after a dispute between the parties.