Jack Gaudion finds a niche in local golf club business

Jack Gaudion is bullish on golf. More specifically, he’s bullish on the private club model he and partner Ron Kuhlman have built in Waukesha County.

Their acquisition last week of Merrill Hills Country Club in Waukesha — renamed The Legend at Merrill Hills — brought to four the number of privately owned non-equity clubs in The Legend Clubs fold.

Gaudion and Kuhlman started by building The Legend at Brandybrook in Wales, which opened in 2003. They acquired The Legend at Bergamont in Oregon, Wis., in 2007, and added The Legend at Bristlecone in Hartland in 2009.

Nationwide, as the golf industry reels from declining participation and course closings and private clubs struggle to remain solvent, Gaudion almost seems to be working magic.

He and Kuhlman have spent about $33 million in capital improvements and facility acquisitions since 2004 and haven’t assessed their members a dime. Memberships in The Legend Clubs are fully refundable. The golf courses, swimming pools, tennis courts and restaurants are busy from sun-up to sundown.

What are they doing different?

“I’ve been doing this club business for a long time,” said the 53-year-old Gaudion. “I believe in clubs. I think there’s a bad perception of what a country club is. A country club is people with disposable income investing in their families.

“So an investment in a club is an investment in family. We’ve clicked on a little niche here.”

Gaudion’s members (some 1,400 now at the four clubs) buy into his premise that golf is a family game. Gone are the days when the man of the house spent weekends at “the club” playing golf and cards with his buddies, and wives and children were treated almost as intruders.

There are nearly 500 kids enrolled in junior programs at The Legend Clubs. Gaudion is a big believer in the American Junior Golf Association; an AJGA tournament will be held next month at Brandybrook.

“Playing golf with your kids, it can’t be bad,” he said. “Kids don’t get in trouble on a golf course. It’s a good place to be. All we’re trying to do, all of us, is to put our kids in a healthy environment.”

One attractive feature of being a Legend Clubs member is reciprocity; members can play golf, dine or use the facilities at any of the clubs.

At Merrill Hills, members will have the option of keeping their existing memberships and using only the Merrill Hills facility or buying a more expensive reciprocal package for $15,000.

Members at Bristlecone didn’t have that option.

“With the Merrill membership we were very sensitive to protecting their traditions,” Gaudion said. “If they choose to stay Merrill only, that’s absolutely no problem. We’re prepared to run it either way.”

One Merrill Hills member said he expected members would be pressured into buying the reciprocal package over the next few years.

“What we want is the members choosing to want full reciprocal access,” Gaudion said. “If the member doesn’t believe it benefits him, I run the risk of losing the member. I can’t be in business very long if I lose members.”

Why did Merrill Hills sell?

According to Gaudion, the club has never missed a bank payment, but the member said the club was in debt and it was his understanding a line of credit was coming due in July.

“I think that’s been overblown, frankly,” Gaudion said. “There was no problem with the bank. This wasn’t some sort of bank sale. I feel bad for the members there that the public perception is that must be the reason.”

According to the member, nearly 400 votes were cast and only 12 were against the sale.

“The members believe we can improve the club and that our model can be a better experience for them,” Gaudion said. “I do believe they voted for that. Eighty-four-year-old member-owned clubs just don’t sell. I view it as them embracing what we do.”

He added that Merrill Hills’ caddie program would remain intact and that he’s already boosted the operational budget.

“Improving the facility, expanding the facility and restoring one of the neat, classic courses is going to be a lot of fun to do,” Gaudion said. “We’re doing it in concert with the members’ desires.

“We’ve got ideas for capital improvements. I’ve got lots of ideas but they’re tempered by gaining member support. I don’t need to make changes to prove I can change things.”

Gaudion doesn’t envision more course acquisitions in the near future. He’s a personable man who enjoys mingling with his members, the vast majority of whom genuinely like him. He doesn’t want his golf empire to get so big that he no longer knows his members’ names or what their kids are doing in school.

The bottom line is that he is succeeding in a business that has had its share of failures in recent years.

“What’s happening for us can be a recipe for the club industry on what’s possible,” Gaudion said. “We believe in the club business. We believe in what we do. We believe in our members.

“When you consider how tough the economy has been and how unstable the economy has been I’m proud of what we’ve done.”

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