Different Ways to Run a Pub

If you’re looking to run your own pub, the good news is that in the UK there are several ways you can do it. It’s important to decide which one will suit you best, so take a look at the options below.

TENANCY

A tenancy is usually a short occupational agreement where you rent the property from a brewery or pub company for 3 to 5 years. It provides a lower cost of entry than you’d find on a lease or franchise business. You’ll be self-employed and you’ll employ everyone in the business. You’ll have shared responsibility for the repairs and maintenance of the property. You’ll be unable to sell-on any goodwill in the business.

LEASE

Lease agreements are longer-term occupational agreements, where you rent the property from a brewery or pub company. The length of term can typically be anything from 10 to 30 years. You’ll be self-employed and employ everyone in the business. You’ll have full responsibility for the upkeep of the property, therefore you’ll need to budget for higher overhead costs. You’re able to sell-on the goodwill of the business.

FRANCHISE

A franchise agreement is similar to a lease agreement, however you’ll have standard operating procedures reflecting the business model, with turnover and profits shared.

MANAGEMENT CONTRACT

With this type of agreement you operate the pub on behalf of the pub company. It’s usual for the pub company to hold the property repairs and maintenance liability, as well as pay all running costs and own the stock. You’ll be paid a management fee, so you’ll have a guaranteed income, and additional bonuses may be earned depending on the business performance and standards audits of the pub.

MANAGED HOUSE

You’re employed by the brewery or the pub company who owns the property, and you’d be paid a salary. The brewery or pub company employs everyone working in the pub and has full responsibility for the management and upkeep of the property.

FREE HOUSE

You own the pub property yourself. You’re self-employed and you employ everyone in the business. You have full responsibility for the upkeep of the property.