Exhibit 10.7

                              EMPLOYMENT AGREEMENT


     THIS AGREEMENT IS MADE AS OF 8th day of May, 1997 (the  "Effective  Date"),
between Buckhead America  Corporation,  a Delaware  corporation (the "Company"),
and Ronald L. Devine (the "Executive").

                                   WITNESSETH:

     WHEREAS,  the  Executive  will be employed  by the Company as an  executive
officer effective May 8, 1997, and;

     WHEREAS, the Company desires to continue the employment of the Executive as
an executive  officer of the Company and the Executive  desires to continue such
employment on the terms and conditions set forth in this Agreement:

     NOW,  THEREFORE,  in  consideration  of the above and the employment of the
Executive by the Company,  and the mutual agreements  hereinafter set forth, the
parties agree as follows:

                                    SECTION 1
                                   DEFINITIONS

     (a)  "Affiliate"  means (1) any  corporation  which is a member of the same
controlled  group of  corporations  (within the meaning of Section 414(b) of the
Internal  Revenue  Code) as is an entity,  and (2) any other  trade or  business
(whether  or not  incorporated)  controlling,  controlled  by,  or under  common
control (within the meaning of section 414(c) of the Internal Revenue Code) with
an entity.

     (b)  "Associate"   means  (1)  any  corporation,   partnership,   or  other
organization  of which such specified  person is an officer or general  partner,
(2) any trust or other estate in which such  specified  person has a substantial
beneficial  interest or as to which such specified  person serves as director or
in a similar  fiduciary  capacity,  (3) any relative or spouse of such specified
person,  or any relative of such spouse who has the same home as such  specified
person,  or who is a director or officer of the Company or any of its parents or
subsidiaries,  and (4) any person who is a director, officer, or partner of such
specified person or of any corporation (other than the Company or an Affiliate),
partnership, or other entity which is an Affiliate of such specified person.

     (c) "Board of Directors" means the Board of Directors of the Company.
<PAGE>

     (d)  "Business  of the Company"  means the  business of owning,  operating,
managing,  marketing and franchising  hotels,  motels,  lodges and  restaurants;
mortgage  servicing;  and such  other  business  as the  Company  may  hereafter
conduct.

     (e) "Change of  Control"  means a change in control of the  Company,  which
shall be deemed to have  occurred  upon any sale of  shares  of  capital  stock,
(other  than a sale  of  shares  for  cash  in a  public  offering),  merger  or
consolidation,  or sale of all or substantially all of the assets of the Company
in any  transaction  or series of  transactions,  if after such  transaction  or
series  of  transactions  the  current  shareholders  of the  Company  or  their
Associates  and  Affiliates  no longer own,  directly or  indirectly  51% of the
outstanding  shares of voting stock of, or all or substantially  all the capital
stock of, the  Company,  or a change in the majority of the  Company's  Board of
Directors other than by election of the current Board's members.

     (f)  "Competing  Business"  means  any  business  which  is the  same as or
essentially the same as the Business of the Company.

     (g)  "Disability"  means  a  disability  of the  Executive  such  that  the
Executive is entitled to disability retirement benefits under the federal Social
Security  Act or such  that the  Executive  is  unable  to  perform  his  duties
hereunder.  The determination of whether  disability exists shall be made by the
Board of Directors and shall be substantiated by competent medical evidence.

     (h)   "Discharge   for  Cause"  means  a  termination   of  the  employment
relationship  between the Employee and the Company,  and its  Affiliates  by the
Company or any  Affiliate,  for any of the following  reasons,  as determined in
good faith by the Board of Directors of the Company:  (1)  continued  failure to
substantially  perform his duties with the Company or an Affiliate,  (other than
any such  failure  resulting  from his  incapacity  during  physical  or  mental
illness);  (2) willful conduct which is demonstrably and materially injurious to
the Company or its Affiliates, monetarily or otherwise; (3) personal dishonesty;
(4) incompetence;  (5) breach of fiduciary duty involving  personal profit;  (6)
willful violation of any law, rule, or regulation (other than traffic violations
or similar  offenses);  (7) engaging in the  activities  prohibited  by Sections
6,7,8, or 9 hereof; or (8) expiration of this Agreement.

     (i)  "Discharge  without  Cause"  means  a  termination  of the  employment
relationship  between the Employee and the Company and its  Affiliates  due to a
discharge of the Employee by the Company or an Affiliate, other than a Discharge
for Cause.

     (j) "Proprietary  Information"  means information of a secret,  special and
unique  value to the Company  concerning  the  Company's  business and method of
operation,   which  information  is  not  in  the  public  domain.   Proprietary
Information  shall include,  without  limitation,  any technical or nontechnical
data, formulas, patterns, compilations,  programs, devices, methods, techniques,
drawings, processes, financial data or plans, product plans, and lists of actual
or potential customers,  franchisees, or suppliers. Proprietary information also
includes information which as been disclosed to the Company or its Affiliates by
a third party and which the Company or its  Affiliates are obligated to treat as
confidential.
<PAGE>

     (k)  "Restricted  Period"  means the period of time that begins on the date
hereof and  extends for the period of the  employment  of the  Executive  by the
Company  hereunder  and for a period of  thirty-six  (36) months  following  the
termination of such employment for any reason whatsoever.


                                    SECTION 2
                               EMPLOYMENT, DUTIES

     (a) The Company  hereby  employs the  Executive,  and the Executive  hereby
accepts employment by the Company to perform the duties and  responsibilities of
President  of The Lodge  Keeper  Group and Senior  Vice  President  of  Buckhead
America  Corporation  as described  on Exhibit A attached  hereto and such other
duties as may be assigned to the Executive by the Board of Directors  and/or the
President of Buckhead  America  Corporation.  The  Executive  shall  perform and
discharge well and faithfully the duties which may be assigned to Executive from
time to time in connection with the conduct of the Business of the Company.

     (b) In addition to the duties and responsibilities specifically assigned to
the  Executive  pursuant  to Section  2(a)  hereof,  the  Executive  shall:  (1)
diligently   follow  and  implement  all   management   policies  and  decisions
communicated  to the Executive by the Board of Directors  and/or the  President;
(2) timely prepare and forward to the Board of Directors and/or the President of
the Company or the  designee  all reports and accounts as my be requested of the
Executive;  and (3) devote all of the Executive's  time, energy and skill during
regular  business  hour to the  performance  of the  duties  of the  Executive's
employment   (reasonable  vacations  and  reasonable  absences  due  to  illness
excepted), and faithfully and industriously perform such duties.

     (c) The  Executive  shall not during the term of this  Agreement be engaged
(whether or not during normal  business  hours) in any other business  activity,
whether or not such  activity  is pursued  for gain,  profit or other  pecuniary
advantage;  but this shall not be construed as preventing the Executive from (1)
investing his personal assets in any business which is not a Competing Business,
and will not require any services on the part of the  Executive in its operation
or affairs and in which his  participation  is solely that of an  investor,  (2)
serving  on the board of  directors  of any  business  which is not a  Competing
Business,  (3) purchasing  securities in any  corporation  whose  securities are
regularly  traded on a public  securities  exchange  provided that such purchase
shall not result in the Executive  collectively  owning beneficially at any time
five percent (5%) or more of the equity securities of any Competing Business, or
(4)  participating  in conferences,  preparing or publishing  papers or books or
teaching.  Prior to commencing any activity  described in clause (4) above,  the
Executive  shall  inform  the Board of  Directors  and/or the  President  of the
Company or the designee of any such activity.  The company waives two provisions
concerning the Executive's activities with Devine's Coffee,  Concepts in Lodging
and Timmons Woods.
<PAGE>

     (d) The Executive  shall not have the right to make  contracts  binding the
Company,  except to the extent  consistent  with  standard  written  policies or
programs  of the  Company and except as  authorized  by the Company  through the
Board of Directors of the Company or the designee.

     (e) All funds  and  property  received  by the  Executive  on behalf of the
Company  shall be received  and held by the  Executive in trust for the Company,
and the Executive shall account for and remit all such funds to the Company,  as
applicable.

                                    SECTION 3
                             COMPENSATION, BENEFITS

     (a)  The  Company  shall  pay to the  Executive  as  compensation  for  the
Executive's  services  hereunder,  a base  salary at a rate equal to One Hundred
Five Thousand  ($105,000)  per annum (the "Base  Salary").  Base Salary shall be
payable in accordance with the Company's standard payroll procedures.  The Board
of  Directors  shall  review  the  Executive's  Base  Salary on an annual  basis
commencing  each  anniversary of this contract and may increase the  Executive's
Base Salary by an amount the Board of  Directors  deems  approprate  in its sole
discretion.

     (b) During the term of the Executive's  employment,  the Executive shall be
entitled to particpate  in any employee  benefit plan and program of the Company
and to  receive  vacation  time to the  extent  that the  Executive's  position,
tenure, salary, age, health and other qualifications make the Executive eligible
to  particpate  in such plans and programs and to receive  such  vacation  time,
subject  to the  rules  and  regulations  applicable  thereto.  Such  additional
benefits shall include, without limitation, subject to the approval of the Board
of Directors,  life, health,  dental and disability  insurance benefits and cash
bonuses.

     (c) The  Excecutive  shall be entitled to be reimbursed in accordance  with
the policies of the company,  as adopted and amended from time to time,  for all
reaonsable and necessary  expenses  incurred by the Executive in connection with
the performance of the Executive's duties of employment hereunder; provided that
the Executive shall, as a condition of such  reimbursement,  submit verification
of the nature and amount of such expenses in accordance  with the  reimbursement
policies from time to time adopted by the Company.

     (d) The  Executive  shall receive no  compensation  in addition to that set
forth in this  Agreement for any services  rendered by him in any capacity t the
Company;  provided  that to the extent that the  Executive  becomes  eligible to
participate  in any stock  option or bonus  plan of the  Company,  the terms and
conditions of any options or bonuses  granted to the Executive shall be governed
by the terms and conditions of such plan and any related stock option  agreement
or bonus plan  entered  into  between  the  Executive  and the  Company.  If the
Executive is elected or appointed a director or officer of any  Affiliate of the
company  during the term of this  Agreement,  the  Executive  will serve in such
capacity without further compensation.
<PAGE>

     (e) The Company may deduct from each payment of compensation  hereunder all
amounts  required to be deducted  and  withheld in  accordance  with  applicable
federal and state income, FICA and other withholding requirements.

     (f) In  addition  to the Base Salary in item 3(a),  the  Executive  will be
included in the  company-wide  bonus system and is entitled to earn a maximum of
forty percent (40%) of the $105,000 Base Salary.  The company-wide bonus is paid
similarly to all home office employees at the end of each fiscal year. The bonus
plan can be amended from time to time by the Board of Directors of the company.


                                    SECTION 4
                                      TERM

     (a) The term of the  employment of the  Executive by the Company  hereunder
shall  commence  on the date hereof and expire on the third  anniversary  of the
date hereof, unless sooner terminated as provided herein as follows:

          (1) By the Company by way of Discharge for Cause effective immediately
     upon  written  notice of  termination  specifying  the  cause  given to the
     Executive;

          (2) By the Company upon the death or disability of the Executive; or

          (3) By either  party,  at any time upon thirty (30) days prior written
     notice of termination given to the other party.

     (b) Upon the  termination  of the  Executive's  employment  hereunder,  the
Company  shall  have  no  further  obligation  to the  Executive,  or his or her
personal  representative,   with  respect  to  this  Agreement  (notwithstanding
anything  to the  contrary  set  forth in this  Agreement,  including  Section 3
hereof), except as follows:

          (1) The Company shall pay to the Executive the Base Salary  accrued up
     to  the  date  of  termination   hereunder  and  unpaid  at  such  date  of
     termination.  Such  payment  of the  unpaid  Base  Salary  shall be due and
     payable within ten (10) days of the date of termination.

          (2) If the Company  terminates this Agreement pursuant to Section 4(a)
     (3) within  twelve (12) months after a Change of Control,  then in addition
     to the amount payable pursuant to Section 4(b)(1), the Company shall pay to
     the  Executive  severance pay in an amount equal to the greater of the Base
     Salary the Executive would have earned from the date of termination through
     the remaining balance of the term of employment pursuant to Section 4(a) if
     he had remained in the employ of the Company for the  remaining  balance of
     such term, or one-half of the Executive's Base Salary for the year in which
     the  termination  occurs,  but reduced by the amount,  if any, which in the
     opinion  of  legal  counsel  acceptable  to the  Company,  would,  if paid,
     constitute  an "excess  parachute  payment",  within the meaning of Section
     28OG of the Internal  Revenue Code of 1986,  as amended,  regardless of the
     source of such payment. Such severance payment shall be payable on the date
     ten (10) days from the date of termination.
<PAGE>

          (3) If the  Company  terminates  this  Agreement  pursuant  to Section
     4(a)(3)  without  Cause  (other  than  due  to  the  Executive's  death  or
     disability),  then in  addition to the amount  payable  pursuant to Section
     4(b)(1),  the Company shall pay to the Executive severance pay in an amount
     equal to the Base Salary the  Executive  would have earned from the date of
     termination  to the  first  anniversary  of the date of  termination.  Such
     severance  payment shall be payable on the date ten (10) days from the date
     of termination.

          (4) If the Executive  terminates this Agreement for any reason between
     90 and 120 days  following  a Change of  Control,  then in  addition to the
     amount payable  pursuant to Section  4(b)(1),  the Company shall pay to the
     Executive  severance  pay in an amount  equal to the lesser of (I) the Base
     Salary the Executive would have earned from the date of termination through
     the remaining  balance of such term,  or (ii)  one-half of the  Executive's
     annual  Base  Salary  for the year in which the  termination  occurs.  Such
     severance  payment shall be payable on the date ten (10) days from the date
     of termination.

     (c) As a condition  precedent to the  obligation of the Company to make the
severance  payments  described  in Sections  4(b)(2),  4(b)(3) and 4(b) (4), the
Executive (1) shall  execute and deliver to the Company a termination  agreement
in form and  substance  satisfactory  to the  Company  releasing  all claims the
Executive may have arising out of this  Agreement  against the Company,  and the
officers,  directors and agents of the Company,  and  reaffirming the continuing
obligations  of the  Executive  under  this  Agreement,  and (2)  shall not have
violated any of the  covenants of the Executive in Sections 6 and 7 prior to the
time  any  installment  of such  severance  is due.  Notwithstanding  any  other
provision  hereof,  in the event the Executive  violates any of the covenants of
the  Executive in Sections 6 and &, the Company  shall have no obligation to pay
to the Executive any unpaid portion of any severance payment determined pursuant
to Section 4(b)(2), 4(b)(3) or 4(b)(4), as applicable.

     (d) The  covenants of the  Executive in sections 6 and 7 shall  survive the
termination of this Agreement and the Executive's employment hereunder and shall
not be extinguished thereby.
<PAGE>


                                    SECTION 5
                                    LOCATION

     The location of the Executive's work will be in the Prospect, Ohio area.

                                    SECTION 6
         OWNERSHIP, NONDISCLOSURE AND NONUSE OF PROPRIETARY INFORMATION

     (a) The Executive acknowledges and agrees that all Proprietary Information,
and all  physical  embodiments  thereof,  are  confidential  to and shall be and
remain the sole and  exclusive  property  of the  Company.  Upon  request by the
Company and in any event upon termination of the Executive's employment with the
Company, for any reason, the Executive shall promptly deliver to the Company all
property belonging to the Company,  including, with limitation,  all Proprietary
Information  (and all  embodiments  thereof)  then in the  Executive's  custody,
control or possession.

     (b) The  Executive  agrees  that all  Proprietary  Information  received or
developed by the Executive as a result of the  Executive's  employment  with the
Company  pursuant  to this  Agreement  and prior to the  effective  date of this
Agreement  will be held in trust and in strictest  confidence by the  Executive.
The Executive will protect such Proprietary  Information  from  disclosure,  and
without the prior written consent of the Company, will make absolutely no use of
the  Proprietary  Information  except  in  connection  with and as a part of the
Executive's  employment  with the  Company.  The  Executive  shall  maintain and
observe the  obligations  of  confidentiality  contained in this  Agreement with
respect to the Proprietary  Information during the term of his or her employment
with the Company and at all times  following the  termination of such employment
for any reason whatsoever.

                                    SECTION 7
                       AGREEMENT NOT TO SOLICIT EMPLOYEES

     The Executive agrees that during the Restricted  Period, the Executive will
not,  either  directly or indirectly,  on the  Executive's  own behalf or in the
service or on behalf of others,  solicit, divert or hire, or attempt to solicit,
divert or hire, any person  employed by the Company or its Affiliates  with whom
the  Executive  has had  material  contact,  whether or not such  employee  is a
full-time  or a  temporary  employee  of the  Company  and  whether  or not such
employment is pursuant to a written  agreement,  for a determined  period, or at
will.
<PAGE>

                                    SECTION 8
                                  SEVERABILITY

     The  Executive  agrees  that the  covenants  and  agreements  contained  in
Sections & and 7 of this Agreement,  are of the essence of this Agreement;  that
each of such  covenants if reasonable  and necessary to protect and preserve the
interests and  properties  of the Company and the Business of the Company;  that
the Company is engaged in and throughout the Restricted  Area in the Business of
the Company;  that  irreparable  loss and damage will be suffered by the Company
should the Executive  breach any of such covenants and agreements;  that each of
such covenants and agreements is separate,  distinct and severable not only from
the  other of such  covenants  and  agreements,  but also  from  the  other  and
remaining  provisions  of  this  Agreement;  that  the  unenforceability  of any
covenant  or  agreement  contained  in  Sections  6 and 7 shall not  affect  the
validity or  enforceability  of any other such  covenants or  agreements  or any
other  provision or  provisions  of this  Agreement;  that, in addition to other
remedies  available to it, the Company  shall be entitled to both  temporary and
permanent injunctions to prevent a breach or contemplated breach by Executive of
any of the covenants or  agreements  contained in Sections 6 and 7; and that the
Executive  hereby waives any requirements for the posting of a bond or any other
security by the Company in connection therewith.

                                    SECTION 9
                         GOVERNING LAW AND JURISDICTION

     This Agreement  shall be governed and construed as to both  substantive and
procedural matters in accordance with the laws of the State of Ohio. The parties
agree that if a dispute or claim  between  the  parties  arises  related to this
Agreement,  any legal  action or  proceeding  shall be initiated in the state or
federal  courts of the State of Georgia,  and by execution  and delivery of this
Agreement the parties  hereto submit to and accept with regard to any such legal
action or proceeding,  for themselves  and with respect to their  property,  the
jurisdiction  of such courts and agree to be bound by any and all  judgments and
orders rendered by such courts.


                                   SECTION 11
                                  MISCELLANEOUS

     (a) This  Agreement  may be  assigned by the Company and shall inure to the
benefit of any such  assignee.  This Agreement and the right of the Executive to
receive compensation,  or other payments hereunder is personal to the Executive.
The  Executive  may not sell,  assign,  transfer,  convey,  pledge,  encumber or
hypothecate in any way, any rights,  duties and obligations under this Agreement
without the prior written consent of the Company.  This Agreement may be amended
only by a writing  signed by the parties  hereto (but without the consent of any
other person).  The waiver by the Company of any breach of this Agreement by the
Executive  shall not be  effective  unless in writing,  and no such waiver shall
operate  or be  construed  as the  waiver  of the same or  another  breach  on a
subsequent  occasion.  This Agreement and any stock option agreement between the
Executive  and the Company  embody the entire  agreement  of the parties  hereto
relating to the  employment  by the  Company of the  Executive  in the  capacity
herein stated and,  except as specifically  proved herein,  no provisions of any
employee manual,  personnel  policies,  Company directives or other agreement or
document  shall be deemed to modify  the  terms of this  Agreement  between  the
Executive  and the  Company.  All  other  prior  understandings  and  agreements
relating to the employment of the Executive by the Company in whatever capacity,
are hereby expressly terminated.
<PAGE>

     (b) Any notice required or permitted to be given to the parties pursuant to
this  Agreement  shall be in writing,  and deemed given to a party and effective
when  personally  delivered,  or when  deposited in the United States mails,  by
certified mail,  return receipt  requested,  at the address set forth below such
party's signature on this Agreement or at such other address as such party shall
designate by written notice given in accordance with this Section 12(b).

     IN WITNESS WHEREOF,  the parties have executed and delivered this Agreement
as of the date first shown above.

THE EXECUTIVE:                          BUCKHEAD AMERICA CORPORATION



By: /s/ Ronald L. Devine                By: /s/ Douglas C. Collins
    --------------------------              ------------------------
    Ronald L. Devine                        Title: President

Address:                                Address:
705 King Avenue                         4243 Dunwoody Club Drive
Marion, Ohio 43302                      Dunwoody, GA 30350







<PAGE>


                                    EXHIBIT A

                  DUTIES AND RESPONSIBILITIES OF THE EXECUTIVE


     The Executive will be employed as President of The Lodge Keeper Group, Inc.
and Senior Vice President of Development and  Administration of Buckhead America
Corporation.  He will be responsible for the overall  operations of the Prospect
Ohio  headquarters  of The Lodge  Keeper  Group  including,  but not limited to,
development of new Country Hearth Inns, renovations of properties for conversion
to Country  Hearth Inns,  administration  of the Prospect  headquarters  and any
other  services  necessary to assist in the operations of The Lodge Keeper Group
and Buckhead America Corporation.  The Executive will report directly to the CEO
of Buckhead America Corporation.