A Private City Club Your Granddaughter Can Love [Ep. 34]

In the world of City Clubs, Jeff McFadden is well known and well-respected. As the CEO of the Union League of Philadelphia he has developed a national reputation as a club leader. Ask GM's who know him and they use adjectives to describe him like "Brilliant", "Visionary" and "remarkable."

In this episode, Jeff shares his involvement in transforming the Union League from a club in financial trouble generating about $7 million in annual revenue to a club that does about 100 million annually. He also shares his perspective on breaking away from old financial models and how to engage new, younger members with long-time club personalities. Is now the time to double down and invest in your club? Listen to Jeff's thoughts on that topic as well.

Noteworthy Moments:

• Jeff talks about making the leap to the Union League - 3:45
• Park it! The Union League buys a parking garage - 9:07
• Building your granddaughter's club - 13:21
• Thinking differently about the financial future and the "right way to run a railroad" - 15:25
• Change management and getting the right people on the bus - 19:03
• The city club and more. Building an investment portfolio - 25:52
• How Jeff views appealing to different member demographics - 35:06
• Is this the time to invest in your club? - 39:28

Episode Summary:

For club leaders who feel stuck in the "same old, same old" Jeff provides a fresh take on some long time issues. He also offers some insightful thoughts around managing the issue of engaging younger new members while keeping long time members excited about the club. As the General Manager, now CEO of the Union League of Philadelphia, Jeff is gone from managing day to day operations of a city club to running a $100 million business. If you're someone hoping to create this kind of growth at your club and this type of career track for yourself, you'll appreciate Jeff McFadden's Perspective

Let's Connect

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Transcript

Ed Heil: [00:00:00] You're listening to Crush and Club Marketing, a podcast for progressive club leaders looking to increase their club's revenue. Time for Change begins right now. In the world of city clubs. Jeff McFadden is well-known and well-respected as the CEO of the Union League of Philadelphia. He's developed a national reputation as a club leader, as GM's who know him and these adjectives to describe him like brilliant, visionary and remarkable. In this episode of Crushing Club Marketing, I catch up with Jeff to learn more about his involvement in building the Union League from a club in financial trouble to a club that does about 100 million in revenue annually. He calls it accidental brilliance, but there's more to it than that. [00:00:44][44.7]

Ed Heil: [00:00:46] Your name has come up in so many conversations regarding just what a strong leader and visionary you are and in the work you've done at the Union League. And I know that it's difficult to talk about yourself in that way. But there was a quote that I read from Jason Straka from the Frye Straka, a global golf course design firm and Jason Straka, said Union League CEO Jeff McFadden is one of the most respected general managers associated with the golf business. He's credited with vastly expanding the Union League's social and business opportunities, knowing that many of their members on a vacation home down on the Jersey Shore and or vacation there quite a bit. Jeff saw an opportunity for a second golf facility, and obviously this is referring to one of the the golf clubs that the union now owns. But when you hear those kind of accolades, and that, what goes through your mind. [00:01:46][60.0]

Jeff McFadden: [00:01:47] Well, first of all, what goes through my mind is I pay Jason, which is a good thing. And that's probably why he had those nice accolades about us. But when he and Dana Frye did at Union League, National is just over the top. It's the Disney World of golf. It's spectacular. Over the last year, 27 holes. And now we're proud. I'm very proud of what I did. I think a lot of what we've done over the last 25 years was accidental brilliance through really just perseverance, hard work, you know, trying to get the right strategy and then keeping your head down and, you know, working through what you could do and keeping a smile on your face to, you know, that's. [00:02:27][40.1]

Ed Heil: [00:02:27] Yeah, well, you make it sound simple and, you know, I guess when it comes second, nature probably feels simpler. Although I know it's not always been super easy, as is. Most jobs are when you're there that long. But 25 years, you know, that's a long run. And your first two jobs in you know as I think GM and both both jobs five years and three years which is pretty typical, right. I mean, is that do I have that right? Help me out with that. [00:02:56][28.7]

Jeff McFadden: [00:02:56] Yeah. No, When I graduated the hotel school at Cornell, I went to the Cosmos Club as food and beverage manager, got promoted to assistant GM clubhouse manager. And then my first GM job is in Denver, Colorado, at the University Club, which I never thought I'd move back to the East Coast from Colorado. But I did. Yeah, right. When I got headhunted to go to the Union League at at age 30. So good times. [00:03:20][24.1]

Ed Heil: [00:03:21] Guess, you know, at age 30. What did the Union League see in you at that age, especially looking back now? I mean, what's it like looking back now and, you know, knowing what you were like then? I mean, what do you think they saw in you that time? [00:03:34][12.4]

Jeff McFadden: [00:03:34] Well, I think in in reality, I think I was the fifth person they offered the job, too. So, you know. [00:03:40][5.2]

Ed Heil: [00:03:40] You sort of you I wish I got I got a vet that won out. But yeah. [00:03:44][3.5]

Jeff McFadden: [00:03:45] You know, right place, right time, situation. It just worked out well. The league was struggling in the late eighties, 1990s, as Philadelphia was struggling quite a bit before Ed Rendell, who was a gregarious mayor, wind up becoming governor of Pennsylvania. Just a terrific leader, inspirational type of person. So, you know, when I was young enough, probably dumb enough and not experienced enough to know what I was getting into. And the the more senior statement statements in the club industry probably looked at the league and said, I don't want to touch it. Right. It's it had sort of had terminal cancer. At the time it wasn't bankrupt, but it was very close to bankrupt. But I saw that it had great bones as well. It had a great foundation. You know, at 30, you think you can change the world? I think I've done well in changing the league. And it was just being again at the right place at the right time for the right situation. And we made a bad decision or a mistake. We were young enough to outhustle the mistake or the bad decision. Right. [00:04:57][71.7]

Ed Heil: [00:04:57] That's interesting. So what has made you successful for so many years? I mean, if you just take the years alone, that's an incredible achievement in in the private club space to be at one place for 25 years. What do you think has made you successful in that role? [00:05:13][15.8]

Jeff McFadden: [00:05:13] Well, I think the way we acquired and operate the club as sort of, you know, being an innovative type organization. Now, when I did my independent study at Cornell, I studied close to 5000 city clubs throughout the world. It was from the 15 person City Club to the to the club that had 5000. And you needed three things. You needed to have parking, you needed to know, because I gave members assurance coming in from the suburbs that they had a place to park. As you get older, you have more net worth to spend. You get a little worried about where you're going to park. The data showed that that was a huge part of being a successful city club. Yeah. So we bought a parking garage right when I got there, and then we just doubled our revenues in in less than one year. While the number two thing at the greatest city clubs in the world shared was they never sold their land and built the site skyscraper and put their club at the top of the building because eventually the I guess after the data shows after three days that you went away and then the elevator became a barrier to entry, there were a few clubs in New York, Manhattan and Tokyo that buck that trend. Windows on the World, that was a public restaurant. There was a small private club component of Windows on the World. But truly, if you were successful, members had to walk into your club, right? So the league had that as well. And then you need overnight rooms. You have all the expenses running a club, marketing, administration, engineering, you name it. If you add some overnight rooms to the equation, the profitability or the surplus that they could throw off departmentally, you know, $0.60, $0.70 on the dollar really were work well. So I was able to. Run those three things when I first got there and then reinvest into the club with incredible dining business centers, cigar bar, you know, fitness centers, that sort of thing. And so for if I look at my 25 years, the first ten or 15 was taking that incredible foundation that the league was all about. Investing in that. Growing, growing the institution. And then after ten or 15 years, we use the profitability or the surplus that was gained to really have a longer strategic plan that we entitled "Building Your Granddaughter's Club". Yeah. And and that was you know, that was sort of a light bulb moment, like, okay, are we just going to be the greatest 1965 club in 2005? Right. Or, you know, in in 2025, were we going to be what your granddaughter and great granddaughter are going to want in a private club? You know how to how do they socialize? How do they use it? You know, we started asking ourselves all those questions. [00:08:13][179.3]

Ed Heil: [00:08:13] I love that. I want to come back to that next, but if we just step back to you being 30 years old, when you took that job and, you know, you come in and, you know, buying the parking structure and then you started, it sounds like, you know, in the first ten years, there's a lot of innovation and things moving forward. And I know that some of the games that will pay attention to our conversation, they're younger. There's definitely a trend towards a lot of younger jobs or it seems that there is. How did you get their trust, at that you know, I mean, and what was the mindset of the board? Were they just like, hey, we've done our homework, We know Jeff's the right guy, let him go do it. But, you know, there are a lot of clubs out there who are like, Yeah, we'll get him in there, but we'll just tell him what to do. I mean, how do you know what I mean? How do you get in there and earn their trust and really go like that? [00:09:06][52.7]

Jeff McFadden: [00:09:07] So and is fortunate enough to be in the right place at the right time, as I said, because of their how they were struggling financially. But with that said, you can't go in and change the world overnight. You need to start small, you need to show a small victory and then capitalize on each of those victories. You know, as they say, having, you know, having, you know, one bite at a time, you know, you just that's way you have to do it. I think we we had, you know, coming in in 1998 on the heels with Ed Rendell being the mayor of the Republican National Convention, was held in Philadelphia in 2000. We had a tradition as a Republican club. So that was really, you know, helped us springboard into reinvesting in our facilities. But I convinced them to do little things, that the garage was a big thing. But we had already started putting new carpeting, new wallpaper, you know, one dining room at a time, hiring younger, more robust, enthusiastic, vibrant servers and studying what people wanted on food menus and that and so forth. And we just basically started with one dining room and then did another dining room and then did a bar and then bought the parking garage. And the parking garage was, was a struggle. We it was a first assessment we had at the league in 50 years. We did not have a lot of support for it. Yeah. So we, we did wind up getting about 67%, 68% in favor of it. Yeah. And, and I figure just a quick story. I was very transparent because I was I was very young at that time. So I shared everything. I still and I still am as transparent as they come. I just don't lead with my chin. Right. What's actually going on in things? [00:11:01][113.7]

Ed Heil: [00:11:01] I gotta remember that. [00:11:01][0.6]

Jeff McFadden: [00:11:02] Yeah. You know, it makes talking so much or sharing so much as being transparent. I know that's not necessarily people want to be let right. Need to be led and you want to be transparent in everything you do. You just don't need to tell everybody everything every minute of the day. Right? [00:11:19][17.4]

Ed Heil: [00:11:20] Right. Yeah. No doubt. [00:11:21][1.1]

Jeff McFadden: [00:11:21] With social media and, you know, it just seems that's what the next generation is doing. Right. So we were we were we were trying to figure out we needed to do an assessment. It was very was it very much about $2,000 a member. And we you know, they were hemming and hawing about paying that. And and one member said, could I get my money back at a town hall meeting? And I said, Mr. Grossman, you are absolutely brilliant. That's a great idea. We're going to make your assessment refundable. All you have to do is propose a new member. And it was like a light bulb went off and we ran with that. You had actually proposed two members you got $1,000 back for your first member, 1000 for your second. I love it. This is back in 1999. And basically all the naysayers and we still had it still 30 to 33% of the people voted against it. I would say to them, I said, you don't have any friends or colleagues or business people that you could propose to become a member of the league to help us out, to make sure, you know. And that was on top of all the importance of parking, obviously. Right. And then we were about a $7 million operation. We bought the parking garage. And I think the next year after it opened, we were 21, $22 million operations. Wow. Doubled, tripled what we were doing. And all it is is take the you know, the folks from the mainline or from South Jersey who are uncomfortable coming into an urban environment. Yeah, we just assured that they had parking. Right. We just said we have valet parking. It's right next to the club. [00:12:59][97.8]

Ed Heil: [00:12:59] Yeah. Safety and convenience. [00:13:00][1.1]

Jeff McFadden: [00:13:01] Yeah. [00:13:01][0.0]

Ed Heil: [00:13:02] Exact easiest things. [00:13:02][0.8]

Jeff McFadden: [00:13:03] Wow. So and so. I rode that pony for a long time,Ed, the parking garage. You know, work magic for me for the next ten years. [00:13:11][8.5]

Ed Heil: [00:13:11] Yeah, no doubt. I love that. Let's talk about building your granddaughter's club. When did you come up? When did you, like, come up with that phrase that I love that I read that one of the articles. [00:13:20][8.6]

Jeff McFadden: [00:13:21] Yeah. It just, you know, obviously being a men's club for so long, over 125 years of the men's club, we allowed women in 1986. The idea is there's there's so much connotation in that phrase granddaughter building your granddaughters time, meaning that we're becoming progressive more, you know, more forward thinking, more inclusive. And I also got everyone thinking not about themselves, but about the next generation and the generation after them. So I think that's almost more important than than the gender identification of saying building your granddaughters club the to show and to get the culture of our members to think that yes, we've been here 162 years, we're going to be here another hundred and 62 years. Let me not get tied up in minutia of today, but think about tomorrow and you see this and golf clubs and country clubs where they fight over a new irrigation system, you know, an 80 year old to say, hey, I don't want to pay for the new irrigation system. I'm not going to be here. Right, right, right. And you say to that person, well, you're not paying for the new irrigation system, you're paying for the irrigation system you consumed over the last 30 years. Right. And and and that's the sort of the mindset that we started to and now people are like they're proud when we build we have built into their views a capital do structure but they're proud with the the advancements that we have made, the investments that we've made and they don't they don't think of it as for them. They think, Wow, my granddaughter and my grandson are going to love this place. And it's just a little nuance, a little change. [00:15:05][104.6]

Ed Heil: [00:15:06] But I've not heard people position it like that. What has been your overall philosophy, you know, and how do you share that as far as like keeping people thinking forward? Like, is there an overarching sort of, I don't know, almost like value or belief that you have that you sort of, you know, live by that way? [00:15:24][18.3]

Jeff McFadden: [00:15:25] That's a it's a great question. Yeah. I think it's it's always thinking about the future. And I and I and I tell members and a lot of clubs do not do this. We have $54 million in debt, which people are like, Oh, oh, that's a lot of money. And then I don't know. And we also have $20 million in the bank, right? And if we had saved a dollar per member per month since our inception in 1862, yeah, we'd have $1,000,000,000 in the bank. And when you tell stories like that to members and you know it resonates and it gets to them that, you know, you're you're not just here to enjoy the club, but you are a steward of the club. You are a steward of the institution. You know, you need to think of it in that capacity. And for 100 years, clubs never did. Right? Right. They matter of fact, to this day, your investment income of a 501c7 is taxable. So I'm trying to tell people that they need to start a foundation to do a charitable set aside for their foundation. Do you know, do well by doing good in your community and people? Some of the greatest clubs. And I'll say, Jeff, we don't have any investments, we don't have any investment yet. I said, What do you mean? You're Aronomik, you're Marion Golf, you're Pine Valley, you don't have investment income. Like now we don't have any debt, We don't have any savings. We live hand to mouth, right? And then we assess for when we want to build something. I said, I just don't think that's the right way to run the railroad. I think, you know, you you boil the frog slowly, you add capital dues monthly into your regular dues, and you always plan for the future. You don't you don't pay off your mortgage without saying without saving for your kids college education. Right. It's right. It's not rocket science. [00:17:26][121.7]

Ed Heil: [00:17:27] Yeah, well, but why don't more ask why is it so commonsense? You But I mean, so many clubs operate exactly how you just explain it. [00:17:35][7.3]

Jeff McFadden: [00:17:35] Because they let emotion get in the way. You know, they bail They they you know, we're all self-serving, though, don't get me wrong. I'm self-serving as well. But, you know, if you don't have the mentality that you're part of a greater good. You know, you can easily get into. You know? You know, what are we spending today and how can I have the best results and the best experience at the least cost and. And group think happens, very quickly, you know, great leaders, you know, can change culture quickly and then you can get into the abyss quickly as well. In that group thinking and psychology of pricing, whether it's dues or golf fees, food and beverage, menu prices, whatever is important to understand because people want value, right? They still want value, and yet they're going to do that. And we're trying you know, we're trying to ride the wave, tap into a new way of thinking, a new way to run finances and hopefully don't take off. [00:18:37][61.9]

Ed Heil: [00:18:38] And I mean, what you're saying just makes so much sense. But let me throw a wrinkle in on this where it's like a lot of times people will join committees of clubs, they'll join boards and clubs because they have something they have an agenda that they are pushing, right. And they want to get one. I get that. I'll make sure this gets done. How do you how have you been able to manage that? Because that's like that's such a reality that people struggle with. [00:19:03][24.8]

Jeff McFadden: [00:19:03] Well, that takes investment, believe it or not. And here's the investment. The answer is yes. Now ask me the question, says a club professional. You have to have the ability to take no off the table. Not that you can say yes to everything, but a lot of people get into committees and committee services because they haven't been satisfied by the team or by the professional folks they weren't listened to. More often than not, it's not one or the other, right? It's not, you know, should we have sesame seeds on our bun or should we not have sesame seeds on it? But by the way, I've had that conversation at the board level, which is idiotic. You know, you have to believe the right thing. So love it, right? We always tell folks, don't waste your time getting on a committee, because the answer is yes. What do you need? What do you want? We're here for you. And I train everyone never to say no. Even if you know it's impossible. You always say, Let me figure it out. Let me see if I can get back to you and come up with a couple of solutions that may not get you all the way to yes, but takes no off the table. Sure. The other thing we do with committees, which I think is brilliant and I thought it because I stole it from the Missouri Athletic Club and it's worked really well, is that we don't allow anyone to serve on a committee unless they have proposed successfully proposed amendment. Interesting. So one of the things you have, I mean, if you get in a very domineering type member who wants to get on committees and has very strong opinions about something. Nine times out of ten, they have not proposed a member because they usually have a bombastic attitude or they're so aggressive. Nobody wants you know, they're just they're a bull in a china shop. And so we put that qualification in that you have to successfully propose the member to serve on a committee. You need to answer a whole bunch of questions, fill out an application and send us your CV, which is another high hurdle to get over. And then we limit our committees just to 3 to 5 people with two professionals. So the total committee will be 5 to 7 and the two professionals have a vote and we only put on committees those who have an expertise and whatever the committee is doing, you know, which drives me nuts when you have the dentist, you know, as chair of the Green committee, you know, and the gardening and all of a sudden he's an expert on agronomy. [00:21:35][151.7]

Ed Heil: [00:21:36] Right, Right. [00:21:36][0.4]

Jeff McFadden: [00:21:36] Yeah, right. So we'll have that. Instead. We'll have the person that owns the garden center. Right? That's the excuse me. That's the national alert. We were talking about getting a. You know, we want to make sure. So on our food and beverage committees, we have restaurateurs, we have hotel people, we have staffing h.r. Directors who staff for hotels. So we we're pretty smart. We try to put the right people in the right, in the right position. We try to push decision making down to the subcommittee level as best we can. And then quite frankly, the answer is yes. And it defuzes a lot of that tension that you have between members. And then if you couple that with a capital dues at party or regular dues, you don't have to ask for assessments where you could get the tennis racket players fighting against the golfers and the golfers fighting against the wine, people on the wine, people fighting gets the fitness people and the older folks fighting against the younger folks who have kids. And you're putting money into child care and baby pools and that sort of thing. Yeah. So by building the capital into it, into the, you know, you hopefully can trigger projects that are the right decision at the right time. I have a woman right now who is a member, I love her to death, you know, a part of our ten year master plan. We have we are not going to build a outdoor family pool at one of our locations until 2029. And she looked at me and she goes, Jeff, I have an eight year old, ten year old and 12 year old building in 2018. 2019 is not going to serve me a purpose, right? Yeah, exactly. So, yeah, you know, so I have to understand that I have rationalized that over. [00:23:26][110.4]

Ed Heil: [00:23:27] The course of the last. Gosh, what since you've been there in the last 25 years, you've the club has purchased restaurants and golf clubs, and for a city club you don't hear city clubs doing that often. What, what was behind this and what is behind it? And is this just part of the mission and what you see going forward, you know, for years to come? [00:23:49][22.2]

Jeff McFadden: [00:23:50] So we were studying city clubs for a while and you know, back in 1967, we served 2500 lunches a day. Right? It was it was, if you remember, the old movie Trading Places with Eddie Murphy. That was the Union League, right? It was Mortimer and Randolph. Duke and Duke. Yeah. And so lunch was losing. You know, the urban downtown environments were changing, becoming much more residential. The younger kids were moving in and we started to think long term, how is your granddaughter going to use the club versus your grandfather? And we and we just we really started to just think and do some studying about trends and and thought patterns. And it really dawned on us that these younger generation wanted more experiences. Right? They didn't they didn't do the same thing over and over and over. Their grandfather would dine at the same table, you know, every Saturday night, 50 weekends a year, right at Philly Country Club and sort of have the same menu item. Their grandfather had five friends. Their granddaughter now has 500 friends. Right. So the way he or she socializes in a club is totally different than the grandfather, though you typically would find the grandfather on the board making decisions. Right? [00:25:10][80.2]

Ed Heil: [00:25:10] Right. Totally. [00:25:11][0.4]

Jeff McFadden: [00:25:12] We had to kind of think through that. And they and then we thought, you know, the granddaughter only eats out at her favorite restaurant three or four times a year where the grandfather again, a 50 times that is her, right? Yeah. At their favorite restaurant, you know, And then they saying that the granddaughter wants a condo in Manhattan and a condo in Manhattan Beach and it has more of a lock and load mentality, experience driven versus a $10 million house. You know, we're in Grosse Pointe with ten bedrooms on ten acres, and the next generation just doesn't want that. [00:25:51][39.2]

Ed Heil: [00:25:52] For sure. [00:25:52][0.2]

Jeff McFadden: [00:25:52] So we started to to to to think about what could the league become and we started to think a lifestyle club. So can we get them in? It's not just a city social lunch club, but it could be more of a lifestyle club offering more experiences, more amenities. At the same time, we realized that because we had increased our revenues by so much with the parking garage and some of the smaller investments we've made, we realized scale was important. So not only was the next generation changing how they wanted to use the the club and socialize within a club environment, we realized scale is important because clubs have just gotten downright expensive to operate 100, 125 years ago, in the golden age of private clubs, immigration was inexpensive, labor was cheap. There was no environmental laws. There was no. Health care. So you. You know. Tom, Dick, Harry, Sally could start a club back in the early 19th century or 20th century and be very well and be very successful at it. If you look at Detroit or Boston, Westchester, New York, Philadelphia, there are a lot of clubs that were started from 1890 to 1920, the Golden Age. And so that that hit us like like, like a sledgehammer. We needed to increase our top line because our expenses were more were very high. But we also started small. I don't want to anybody think we had this grand strategy or, you know, we have three country clubs now. We'll soon have 81 holes of golf, two independent restaurants that are members only that are really cool, tony type restaurants that you you can't eat in unless you're a member. But it didn't start that. It was very slow. As you said, I've been there 25 years. And people say, Jeff, what you've done to the league overnight is incredible. Like time. It's been like the Bataan Death March in some respects, though, obviously we respect veterans and everyone who gave their life for this country. You know, a quick story about our first acquisition was this little 100 seat restaurant in Stone Harbor, New Jersey, a block from the beach called the Bungalow. And it was just truly accidental brilliance and luck. And we started very small in branching out from from Center City, Philadelphia. I was down staying down the shore with a board member of the league. My wife and I were staying there and we were playing golf. It was July when Philadelphia was just completely empty because everybody goes down to the shore. And I figured that out. You know, I didn't realize it at the time. I figured out shortly after this new swanky hotel called the Reeds, it was just built in on the harbor of Stone of Stone Harbor. So the board members, let's go over, have a drink. After topside went over their back deck overlooking the water with all the boats. And I run into like 20 members. I'm like, Oh, Mr. Turner. Mr. Smith. Oh, man. It was like, Oh, and it was great. Brand new. They put like, you know, 80 million into this place and it was fantastic. They said to Jules, my wife, I said the next night before we go to dinner, let me, let's, let's go show you the reeds and we go back to The Reeds, back to the back bar on the deck overlooking the harbor. And I run into like 20 more members that were magnificent. The numbers are around on Friday, and I'm like, Wow, A light bulb went off. Yeah, where everybody's at. And so we quickly did some data analytics realize that over 65% of our members spent two or more weeks at the Jersey Shore. We then did some zipcode analysis. We found that most of the wealth was moving from Atlantic County, which is home of Atlantic City, little north of Cape May, down to Cape May County, the Avalon Stone Harbor, Cape May area, Ocean City area. Yeah. And we bought a $600,000 restaurant that was in a fire sale because there was a tax lien on it, put about another 600,000 in. So it was a million to investment. And it just took off. We had we had it. And it not only took off as a great place to eat because you can't get into a restaurant down there. Plus, you as a restaurateur, you wouldn't start a restaurant there because the season is so short. So it was a real conundrum. You couldn't get. There were enough restaurants seats from July 4th through Labor Day. But you couldn't make enough money as a restaurant tour to open a restaurant because there was only a ten week season. Right? We had 500 net new members join the league because of the bungalow. [00:30:56][303.8]

Ed Heil: [00:30:57] Wow. [00:30:57][0.0]

Jeff McFadden: [00:30:58] So what I said and then with an equity focus group, the whole bunch of them, we found out that they they loved the Union League in Center City, Philadelphia, but they just didn't get there enough to use it. But now you couple the bungalow down the shore in a marketplace, you can't go out to eat because you can't get a reservation and all of that, except I'm willing to join the league, pay dues because you have Center city. And the Bungalow brought us to buying Torresdale buying Sand Barrens which became Union league National. Buying the Ace Golf Club and Chubb Conference Center and buying the guardhouse in Gladwin. So we just kind of over the next ten years, kept adding properties that grew our membership, our net membership. And if you think about layering that onto the thought process that your your grandchildren are going to have 500 friends. And you need scale because clubs are expensive. It just started to click win, win, win win, Right. You know, and and and these cranky old small clubs that the kids don't want to belong to. They all want to belong to the league now. And we just changed our strategic plan to be called from 28 to 88. And that the concept is not only are we a great club, but we want to be a great club that you're a member of for six years. Yeah. So we get you we get you in Center City when you move in after university in college, we keep you when you move out and have kids. And when your parents die, you inherit the house down the shore. We have we have two properties down there to keep you until you're 88. Wow. That's the concept. [00:32:45][106.8]

Ed Heil: [00:32:46] That it's remarkable. I mean, and so far, no regrets. [00:32:50][3.2]

Jeff McFadden: [00:32:50] No, no regrets. It's just it's a it's not fun for me or not as rewarding for me as much as when you operate one location. You know, I got into hospitality, pealing potatoes at the age of ten and sort of never look back on it when I talk at universities across the country. So how did you decide to get into hospitality? Well, I never did. I just started working and just never stopped working. Right. I just I didn't I didn't conscientious like, think I was going to stay in hospitality. The one regret, though, is that, you know, we have 1200 employees now. We're over 100 million in annual revenue. I miss the satisfaction of day to day operations and people. Jeff, you have the greatest life. You know, you're not responsible. But yeah, but you don't realize, you know, it's the intrinsic value you get from. [00:33:44][53.8]

Ed Heil: [00:33:46] That intimacy. [00:33:46][0.2]

Jeff McFadden: [00:33:46] Location. Right? And one one. So I miss that. [00:33:50][3.1]

Ed Heil: [00:33:50] Yeah, for sure. Interesting. What a machine, though. It's amazing. I got to call you on this show because you've used the term accidental brilliance and luck in a somewhat different spot here. At some point, it's no longer an accident, and it's probably not luck either. But what I'm wondering is, you know, 28 to 88, you know, that is something that I think that a lot of clubs would aspire to be, you know, to say or to to be able to pull off. And yet it's also very difficult for whatever reason, you know, for the reasons you've talked about as far as like appeasing the, you know, just two different generations or maybe three different generations in many cases, for people who are listening to this podcast who are like, you know, you don't have as well. Yeah, well, McFadden has this or he's done that or, you know, somebody who knows you have to. It starts with a vision. It starts with a belief. It starts with great membership, obviously, and, and visionary people. But for people that are listening, that are struggling with how to how to make changes to their club, to appeal to a younger membership, but also engage their aging membership. What what do you say to them? [00:35:05][75.0]

Jeff McFadden: [00:35:06] Well, you got to figure out how to bring those two groups together, right? If you want people to live longer, you've got to surround them with younger people. Right. And that's the easy part. The hard part is getting the young folks to value older folks. So we look at multiple activities that an eight year old and now being very, what your eight year old can do that, an 80 year old. So that's them. But things like bowling. Right. I mean, as silly as that is, it's a thing that a young person can do. An old person do pickleball. Young person can do and an old person can do. Yeah. You know. Lectures and education. Social programs are real important to bring in those young, young people. Go. I try not to think of serving a younger market. I'm serving an older market. I'm serving a club market and try to bring the two generations of three generations together and then keep things lighthearted and fun. The crankiest old guy, you know, will respond with the young folks surrounded around them in an enjoyable environment. You know, cranky, cranky old club members make more cranky old club members. So you have to just stop that cycle, right? You got to you got to put everybody together and try to get them to enjoy each other's company in light hearted activities that everybody can do. You also have to be, as I say, you can't be all things to all people, but you have to offer enough niches at your club to satisfy multiple generations, right? You need to have. You need to be adding pickle at the same time. You're putting Padel in, you know. You need to have a resort style pool. You know, at the same time, you need an Olympic or half Olympic lane pool. So people in their seventies can stay limber and flexible. So it's not one or the other. The answer more, more often than not, is both. [00:37:12][126.4]

Ed Heil: [00:37:13] You kind of create like a win win in that environment. I mean, is that. Yeah. Yeah. Yeah. It just that is one of those those challenges I think so many people are perplexed with is the do I have to make a decision of one over the other instead of saying, is there a way that you can actually kind of make both parties happy? But like you said, you're never going to please everyone all the time. We all know that, too. [00:37:41][28.0]

Jeff McFadden: [00:37:42] Right. Yeah. And that's the hard part. But with the manager, you know, one of the one of the things that I always tell tell members or other managers is, is I never write a member newsletter. You never see my face in our newsletter. I am not, you know, I hope I'm the like the little I am little short and fat, my wizard behind the curtain. I want I want other I want other folks and basically the president of the club to take all the glory, to be the mouthpiece and so forth. So I think being are 25 years and part of my success of being here 25 years is that I'm not front and center. I am I'm sort of front and center on the professional side, but certainly not on the membership side. You'll never I have never written a column and newsletter. I never write an email from from the CEO or from the general manager. It's always from the president or or from a department head or from a vice president or standing committee chair. You'll never see anything from myself to the membership. [00:38:46][63.5]

Ed Heil: [00:38:46] Awesome. Well, last question for you. With so many clubs doing so well, is this I'm going to ask you a question. I probably feel like I know what you can say, but is this the time to really say, let's invest? Is this the time to take some chances? Is this a time with clubs healthier maybe than they were for sure before the pandemic, to maybe look at some things and making changes and having a little more courage? Or is it, what's your general mindset, especially for those clubs that maybe aren't as healthy and those that are, you know, really trying to figure out how best to take advantage of this time? That is better than it was before the pandemic? [00:39:27][40.7]

Jeff McFadden: [00:39:28] I think the time is right to create the right strategy of constant improvement. I don't think it's the right time to do major, major improvements unless you desperately need it. You know, sometimes you just need to knock a clubhouse down to rebuild it because you're going to spend, you know, good money after bad money, so to speak. But I do think the strategy at all private clubs needs to be we are going to have constant improvement over the next ten, 15, 20 years. We're going to continue to change and adapt and better our product. If you spent if your budget over ten years was $100 million, but that's obviously ridiculous to say your budget was 10 million over ten years. If you spent all that 10 million in year one by year three, your members would say, What are you doing for me now? Right. So I think good leadership will put a strategy in that recognize this is the best of times or one of the best. And it's important for us to realize that we need to have constant improvement. And that's the right strategy. So don't give them it's like your kids. Don't give them everything right out of the bat, you know? Give it to him a little at a time. Keep them excited. You know, don't. If you're going to build some paddle courts, you know, don't build paddle, pickle, padel, hydro, clay courts all in the same year. Now you say, Well, Jeff, it might be easier. Well, do the master plan and then, you know. Dole it out a little bit at a time. Keep people excited about, you know, make sure you have something going on for multiple generations, you know, for the old folks, the middle folks, the young folks. I don't think clubs because we always relied on assessments every 10 to 12 years to do major projects. I think if we get in that we should be constantly improving each and every year and share that with them. And I think you'll keep members and members will enjoy your club so much more. [00:41:33][124.9]

Ed Heil: [00:41:34] Jeff, thanks so much. It's so much fun talking to you today and hearing your perspective on what you've done in the industry in general. [00:41:40][6.5]

Jeff McFadden: [00:41:41] I appreciate that. You're doing a great job. Thanks for having me on. [00:41:43][2.6]