The Family Inns Story, Innisfree Hotels

The entrepreneurial road is always filled with great stories. This is one of them.

The tale of the Family Inns begins with a young guy trying to figure out how to become independent and do something beyond collecting a paycheck.

This is Julian MacQueen, going on 30 years old.

In his own words:

At 27, I was working as a sales manager at the 400-room Hyatt Regency in Knoxville, Tennessee, with 30,000 square feet of meeting space – a premier hotel in the Southeast. I was there three years when I got the blessing of ‘Mother Hyatt,’ meaning they were ready to put me in a Director of Sales position anywhere in the country.

I’ve kind of ‘made it’ … I’m Hyatt material.

At the same time, I had started a hot air balloon company called Aerose. I got a commercial license, and my brother was the Chief Aeronaut. You see, the hot air balloon attracts all kinds of people. And so we meet this guy called Ricardo Lopez.

He’s impeccably dressed all the time, has this amazing Nikon camera equipment and a beautiful wife. She has a good last name in the Knoxville community. You know she’s someone. He tells me he is an international photographer with a Learjet, a house in Anchorage and one in Buenos Aires – and he travels all over the world producing the photography for annual reports for major international corporations.

I’m completely captivated by him, because during college I was the photographer for the Public Relations Department at the University of South Alabama. I loved the dark room. I processed all my own images. And this guy has a business where I can be a photographer. I can have my art and my business, and he asks if I’d like to come to work for him.

What do I do? I resign at the Hyatt. I tell them this is an opportunity I can’t pass up. They say, “Go for it, you can always come back.”

Ricardo Lopez would take phone calls from Nicaragua. I would only hear his side of the conversation: “Send them in. Make the strike. Extract these guys.” He was deeply involved in some kind of military exercise and had a leadership role.

(For some reason, his Learjet was always somewhere else.)  

So, I’m ready to work, eager for our first assignment. He says it’s not that time of year. But in the meantime, he says, I’ve got this side business called FCTS – Federal Communication Training School.

He had set one up in Texas and he wanted to set one up in Knoxville. It was simple – a series of weekly tests that allowed you to train for the civil service exam and apply for work in any department of government. The job entailed taking this course door-to-door in poor neighborhoods. He had a set speech.

Do you want to advance your life? I have an opportunity for you.

So I went from being an international photographer to being a door-to-door salesman of this completely illegitimate thing. You can go to any library and get the same study guide.

Next, he needs me to say I was somewhere at a certain time to the FBI.

He tells me I need an alias. How about Kalabash? It was a tiny shrimp sold by Fisherman’s Wharf, a restaurant chain by Shoney’s.

So I go to the FBI and I testify that I was with him at a certain place at a certain time. And he listens to my story. And it’s all for a good cause because I’m going to be an international photographer, and you have to make these small sacrifices to get where you want to go.

He had totally fabricated this image of himself. (In truth, I found out much later, he was wanted for running guns.) Several important people in Knoxville came together against him.

We go down to Fort Lauderdale to race hot air balloons to Bimini. He’s parading around. He is fascinating. He’s a magnet. People start gravitating toward him. We’re invited to this private resort on Cat Island and flown in a private airplane – little known fact, this is where Sidney Poitier is from, it turns out. We’re staying with the guy who owns half the island, where his family used to grow sugar cane before the Civil War in the States.

Things are starting to happen around me. People are doing drugs. There’s lots of partying, wild and crazy stuff. I’m not participating … I am just trying to figure it all out.

Now we’re at the Castaway Bar in Bimini. Hemingway’s place.

I’m sitting out on the dock when I realize I’m an idiot.

I’m a complete fool, and I’ve got to go home and tell Kim, “This is all over, I’m so sorry.”

I remember getting on a boat. I have no money. I make it to Knoxville. I hitchhike home. Kim embraces me with her usual grace.

After being married for a year, we lost our house and my job, and I started looking for other opportunities while Kim waited tables and taught at the Montessori School.

I’m looking for somewhere else to land. I’ve still got my hot air balloon business (another story for another time) to bridge the gap until I find a real job.

I meet Mike Strickland, a kitchen equipment salesman who has been making a $100,000 a year for several years. In the 1970s, and to a 30-year-old, that sounds like a lot of money.

It turns out he has a relationship with Ken Seton, the owner of Family Inns of America. They have 22 hotels.

He’s worked a deal with Seton to sell Family Inns franchises. He has no hotel experience, but I do. So we partner up to develop hotels and sell franchises. I don’t know how to own real estate. I don’t know how to put deals together. But he does.

We buy our first building. 4,000 square feet. Two stories. Owner financing. I bring in the tenants. Our offices are on the top floor, and the bottom is rented. I own a fourth of a building and the tenant is paying the mortage with his lease payment. What a concept!

So we start our business, Strickland Development. We tie up a piece of land at the airport. We find a lender, but we don’t have the equity. Mike asks me if I know anyone with money.

At the time, there was a huge flux of Iranians coming in, escaping persecution. Baha’i Iranians, political fugitives from the Ayatollah regime. A gentleman who owned Pepsi-Cola for the entire country was looking for a place to put his money. I had the reputation for being an honest businessman in the Baha’i community.

Hotels are good investments. So we meet, and he ends up giving us $250,000 as a deposit toward a future investment of a couple million.

We’ve made our first hotel deal. We’re building a hotel, and I own part of it!

The problem is my partner doesn’t come to work until noon. When he does come to work, he goes to lunch, then he drinks, and then he’s worthless, and then I don’t see him. Nothing is getting done except what I do. I’m doing 100 percent of the work, and he’s guiding me along, but he’s not doing a damn thing.

His best drinking buddy is Ken Seton.

So we go down to Mobile, and I get a location next to the Holiday Inn that I know is doing really well, because I was the night auditor there right after I graduated from USA. I reach out and contact the landowners and they are willing to do a long-term 30-year lease, 100 percent financed. I just need a financial statement to back the deal.

Meanwhile, we take my Iranian friend’s money, stick it in an escrow account, and start working through the development process.

I check the account one day and money has been taken out.

Mike goes on an around-the-world trip with Ken Seton, and now I’m just figuring it out on my own. Ken is his best friend. Mike steals from the escrow account, and I’m responsible.

I ask Mike, “What the hell?” ……… He’s taken the money out to buy cocaine.

I go to Ken and say something terrible has happened.

He says: “You make a very clean break from Michael Strickland, negotiate whatever it is you have to. Make a clean break, and I’ll make up the difference. Then I’ll give you a job. And you can be the Executive Vice President of Family Inns. I have 17 hotels. I want you to fill up all my hotels for the 1982 World’s Fair in Knoxville.”

I tell him: “I don’t want a job. I want to own a hotel.”

He says he will teach me, but I have to fill his 17 hotels first.

I get Mike out and settle up my affairs. I have the development rights to Mobile.

Kim and I move to Pigeon Forge, Tennessee, and live in a horrible place, a cinder block efficiency. Ken is giving me housing. Kim is making her clothes out of the curtains. We pawn the silver wedding gifts people had given us to buy Christmas presents for the family.

We’re building the Family Inns of Mobile. It’s 100 percent financed by the guy who owns the entire Intersection at I-65 and Airport Boulevard, Mr. Delaney, who is notorious for being cheap and for being a hardcore businessman.

I remember him telling me, “Julian, I like you a lot. I’m going to teach you some lessons. They’re going to be hard lessons.”

He always came with his two sons. We called them the Trinity. His chief accountant had a calculator you punched in and pulled the handle to register the numbers on the tape. She told him there were these electric adding machines that would make her job go much faster. He said, “Honey, if you want to buy that machine and work faster, you go right ahead.” She had to buy it herself on her dime.

So, I’m putting this whole 84-room development together. It’s my first one.

I’ve got butcher paper going around the walls of my office to show a timeline for everything needed in the hotel and when it needed to be ordered and when it was going to arrive. It was about 10 feet long. I put my first Gantt Chart together on butcher paper. Day by day, all the way around so it all lined up. All by hand.

I found a development template somewhere. It outlined every ashtray, every bed sheet.

At the end, I would have a hotel.

We’re in this farmhouse in Pigeon Forge, and there are pigs running around under the floor boards and I’m making phone calls and the pigs would get in a fight and make a bunch of noise.

Still, I put all the numbers down. I gave Mr. Delaney the number.

The number was $1,817,316.00.

He said, “That number is not going to change. I want you to tell me when you’re going to be open.”

Then, he told me when my rent started.

I thought it would be fine because the contractor told me the work would be done. I never knew about the concept of a change order. It never occurred to me the contractor wouldn’t finish.

And Delaney’s watching me set myself up. He lets me do it. Never offered any advice.

I give him the number, and I’m driving home to Tennessee. I have so much anxiety.

I get about an hour out of Mobile and I realize I didn’t carry a one. But it was in the sixth column! I missed it by $100,000.  I immediate find a pay phone and call Delaney.

He says, “I don’t understand what you’re saying. Didn’t you tell me that was going to be the number?”

Now I have to find a hundred thousand dollars.

The finish date of June 1 is closing in and the lease begins on the land and hotel. I’m in Alabama. Kim’s pregnant in Tennessee. Our daughter, Skye, is born May 26. She’s done it all by herself.

Skye is born. I go home for 48 hours. (I remember going to sleep after her birth and waking up 24 hours later. The nurses at the hospital thought Kim was abandoned.) Kim’s parents fill in. I go back to Mobile.

I’ve got to open the hotel, or I am done. All of this would have been for nothing.

I didn’t have my C.O. – Certificate of Occupancy. Who knew there were things like rain days?

I was so naïve. I didn’t know anything.

It’s June 12, and I finally get a C.O. for the bottom floor on the North side.

I go down and flip the sign on after I get the hot water and air conditioners to work. I’m at the front desk. People start walking in because it is the week of the Junior Miss Pageant and downtown hotels are full, pushing folks out to our part of Mobile.

I didn’t have any money to pay desk clerks, so I work the front desk by myself.

The pitch was basically this:

“The beds are in, and we have hot water and AC. If you want a room, here’s your broom and your sheets.”

I fill up the hotel, and our guests do all the clean-up.

I make some money so I could pay my housekeepers, and I rent every room.

We make our first payroll.

We make enough money that I do not have to go to Ken Seton to tell him I can’t pay my half of the rent. This is June 1981, and I’m 30 years old.

I own 49 percent of a hotel!

Later, 1984, I bought Ken out. I kept the hotel for 30 years. It was as old as Skye.

The Family Inns was my first hotel that led to the founding of Innisfree Hotels.

I guess the moral of the story is:

You don’t know what you don’t know … but if you don’t open yourself up to the possibilities, you may not have the opportunity to succeed.

– As told to Ashley Kahn Salley

Lead Storyteller, Innisfree Hotels

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ABOUT ‘BACK IN TOPEKA’

In order to have a great future, we must celebrate and learn from our incredible past. The Innisfree Hotels story began in Topeka, Kansas. So when the folks who were around back then start a story with ‘Back in Topeka,’ we know it’s time to listen. These are tales of the challenges, of the laughter and tears that come with building a company like ours. That’s the sentiment behind this blog series, a chronicle of days gone by at Innisfree Hotels – and a map to get us where we’re going.