Timeline For Securing A Pub Tenancy Or Lease
Date added: Mon, 15/01/2018 - 10:00
Having made the decision that taking on a pub tenancy or lease is right for you, a common question we get asked is “how long will it take?” As you can imagine it’s not a straightforward answer, much demands on a suitable pub being available, your personal circumstances and how quickly all parties can get everything in place. But on average it takes around five months, with some pub operators opening the door of their new pub in just three months and others taking a bit longer.
Below we outline a timeline of what happens from the moment you apply to run a pub to signing an agreement and launching your business.
9 Steps For Getting A Pub Tenancy Or Lease
Step 1: Apply for a pub
If you think that running a pub is for you the first step is to apply to for a pub. Some people do this when they see a pub advertised, others apply speculatively and work with a brewery or pub company to find the right pub for them.
The application form is straightforward and doesn’t commit you in any way. You won’t need any specific information at this stage, just complete the application form and upload a recent CV, if you have one available. However, you will need to indicate how much capital you have to invest (within a range), so it’s worth giving that some thought before applying. This article - Have You Got The Right Capital For A Pub Tenancy? – might help.
Step 2: General interview
When our Pub Partners team receive your application we will call to arrange a ‘General Interview’. This will be with one of our Recruitment Managers or a Business Development Manager and it’s an opportunity to ask questions and find out more about running a pub. Naturally we will also be interested in finding out more about you and what you want to achieve with a pub business, but it’s not like a formal job interview!
At this point if you haven’t identified a suitable pub we might have some suggestions. If you have found the ideal pub, we can then start exploring the potential in that pub and what you plan to do with it.
Step 3: Get the basic qualifications
On our application form we ask whether you have competed the British Institute of Inn Keeping Pre-Entry Awareness Training (PEAT). At that stage it doesn’t matter either way but if you haven’t, now is a good time to book yourself on a course and also complete other compulsory training. This includes the Level 2 Award For Personal License Holders (or Scottish Certificate For Personal Licence Holders), Level 2 Award In Food Safety and Greene King’s Safe Start training.
Step 4: Find a pub to let
No doubt you will already be busy searching for a suitable pub to let. Breweries and pub companies will list current opportunities on their websites (usually a dedicated site for tenants and leaseholders) and trade sites like The Morning Advertiser also carry freehold, leasehold and tenancy listings. You can also contact local estate agents to see whether they list commercial properties and ask them to let you know if anything comes up.
Having applied for a pub and attended a General Interview the Greene King team will be proactively looking for a suitable pub for you. We may know of a pub that is going to become available later in the year, which is not currently listed on any sites, and will be able to give you the heads up. That's why the time it takes to get a pub can vary dramatically; sometimes you just have to wait for the right business to become available.
Step 5: Write a business plan
Once you’ve found a pub and are actively talking to the pub landlord (brewery or pub company) about taking it on, you need to write a business plan. This doesn’t have to be daunting, even if you’ve never done one before. It involves looking in detail at the business opportunity, how you can build on its strengths, how you will deal with any weaknesses or threats, and what you will do to take it to the next level.
We talk a lot about ‘premiumisation’ in the pub trade. As a concept it’s ideally suited to the pub tenancy or lease model as pub operators are in a great position to differentiate their pub by doing something special. For more on premiumisation and what we mean by this term, read this blog post.
By this stage you will have a Business Development Manager (BDM) working with you to help you secure the pub tenancy or lease. They are on hand to help you write a robust and realistic business plan. You can also tap into their experience of working with other pub operators and use this to create an exciting business plan for your pub.
Step 6: The Agreement
A number of different agreements are available depending on the type of pub you want to run. Generally a pub will be offered with a specific type of agreement, and that might influence your choice of pub. For example some are offered with a Standard Tenancy Agreement or a Standard Lease Agreement, while others may be offered with a Turnover Agreement or a Retail Ready Management Agreement.
You will have probably discussed these at your General Interview to determine what type agreement is right for you. More information about agreements can be found here.
Now is the time to really understand the Agreement, your responsibilities and the pub company’s, and also look at the financial commitment you're making in light of the agreement being offered.
Step 7: Get independent professional advice
The Pubs Code that was introduced in 2016 applies to any brewery or pub company that owns and operates 500 tied pubs or more, such as Greene King. One aspect of the Pubs Code is that any pub licensee (either a pub tenant or leaseholder) must seek independent professional advice before signing an agreement with a PubCo.
The pub company will provide you with a specimen agreement, rent proposal, a 3 year summary of trade volumes and service charges, an estimate of entry costs, specific information about the pub – amongst other documentation. These documents should be shared with your independent advisers and they will help you understand the Agreement.
This stage can slow down the process of getting a pub a little, as documents are read and checked by all parties. It’s a good idea to use professionals (solicitors, accountants etc.) that have experience working with pub tenants and lessees, as they will be familiar with all the paperwork.
Step 8: Pre-Agreement Meeting
At this point your BDM will arrange a Pre-Agreement Meeting to check that you have a full understanding of the Agreement, your and the pub company’s responsibilities, the Pubs Code and other terms of trading. We want to make sure you’re 100% happy about making this commitment and the pub you’re planning to run.
Step 9: Signing the Agreement and paying your deposit
Congratulations! You’ve now secured your pub tenancy or lease and can start running your new business. At this point you can now take advantage of all the support your pub company offers for new pub operators. Greene King has a First 100 Days programme that all our pub operators participate in with the support of their BDM. For more on what happens next in the lead up to ‘Change Day’ when you become the new licensee of your pub, visit out First 100 Days site here.
As you can see the time it will take from applying for a pub to getting the keys and opening to customers will vary depending on the factors identified above. Fortunately there are plenty of things you can do now to ensure that when you do find a pub, you’re not the one delaying the process. These include:
- Applying for a pub – don’t wait until you find a specific pub, register now and our Pub Partners team can start putting things in motion.
- Get your finances in order – make sure you know exactly what capital you have to invest and where it’s coming from.
- Complete your compulsory training – get as much training done now so that you can take advantage of any opportunities that come up quickly.
- Start your business plan – you won’t be able to complete a business plan until you’ve found a specific pub, but you can certainly start thinking about what you want to do with your ideal pub, and how you will achieve it.
- Find independent advisers – don’t wait until you need their services urgently, spend some time now finding the right people for when you need them.