Consistently Quirky
In the Pacific Northwest a family hospitality empire thrives by defying convention.
By Julie Sloane / Portland, Ore.

(FORTUNE Small Business) – There is an ironclad requirement for building a successful service chain: consistency. A Big Mac is a Big Mac whether you chomp on it in East Texas or in the East Village, and that's why the hungry masses so often flock to McDonald's rather than Joe's. In the Pacific Northwest, however, two free-spirited brothers have built a sprawling hospitality chain on just the opposite principle.

McMenamins pubs, restaurants, and hotels dot the landscape from Seattle to southern Oregon, and no two look or feel alike. In every McMenamins establishment, hand-painted murals light up doors, walls, even pipe joints and fuse boxes. Much of the funky furniture was donated by customers, and its style varies from room to room even within the same hotel.

Mike McMenamin, now 54, never made career plans. In 1973 he married his college sweetheart and rolled around Europe in a Volkswagen van for a few months. Europe's pub culture inspired him to return home and open pubs of his own. To furnish them, he and Brian, seven years his junior, rooted around abandoned buildings at night, salvaging doors and fixtures. It wasn't about recycling or nostalgia. It was just cheap.

Their first major project was Edgefield, a hotel complex on the site of the former Multnomah County Poor Farm. In 1988, Mike found the derelict property nestled between a jail and a juvenile-delinquent center. The main building was boarded up, covered in graffiti, and occupied by squatters, including a group of Satan worshippers (their pentagram room was later given an informal exorcism with a marching band that played "Amazing Grace"). Bankers thought they were insane, but the McMenamins bought the dilapidated property for $500,000.

Today the lodge boasts 100 hotel rooms and murals painted by 20 local artists. The 38-acre property features five pubs housed in the former incinerator, laundry, ice house, fumigation shed, and stables. Each serves beer, wine, and spirits made on site--you're welcome to watch. Bored? Play a round of golf, head inside to the movie theater, or go and watch the potter and glass blower. Hungry? Chefs at the two restaurants cook with herbs and vegetables grown on the premises. If the McMenamins had been around in 1911, everyone in Multnomah County would have claimed poverty.

Although the McMenamins took in between $70 million and $80 million last year, they share a view common among did-it-our-way entrepreneurs: Money isn't everything. Revenues continue to rise because they keep adding new venues, but margins have been declining for a decade. As long as the company stays in the black, the brothers aren't bothered. To them, profitability is more like a prerequisite for the fun stuff: distilling pear brandy, hosting an annual UFO Festival, booking the Freak Mountain Ramblers to play their hotels.

The brothers say they will never sell their business. Mike's son Dan, 28, manages one of the family pubs. Daughter Shannon, 26, runs a McMenamins hotel. She sees a lot of her father's personality in the business. "He likes to sit and have some wine and have it be relaxed and not too expensive," she says. "It's definitely very him."

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