Tenancies & Leases Guide: Pubco Profile - Hall & Woodhouse
Dorset-based Hall & Woodhouse has been raising the profile of its tenanted estate of late and is determined to make it a thing to be proud of.
Family-owned brewers, as you might expect, take a different approach to their pubs than the private equity-fuelled pubcos. For most of these firms, the pubs are part of the family. They are in the pub game for the long term, thinking of their value to future generations.
So while a few of them have dabbled in long leases, most prefer to stick to traditional tenancy agreements that allow the company a greater control over the fabric of the property - with less chance of standards slipping.
But that's not to say these firms aren't moving with the times. Even though some are moving at different velocities.
Dorset-based Hall & Woodhouse (H&W) is probably most famous for its beers, badged under the Badger Brewery name. But it has recently begun to raise the profile of its growing tenanted pub estate. In January 2003 it recruited Andrew Younger (pictured) from Punch to, as he puts it, "get a hold of the tenanted estate and make it something to be proud of".
Like many other pub operators, H&W has been steadily moving houses across from its managed estate to its tenanted in an effort to reduce increasing costs, seeing numbers rise from 150 to 184.
The cut-off for determining whether a pub is big enough to stay managed is unusually high - a weekly take of around £10,000 compared to the £7,000 to £8,000 figure others have adopted - and it means there are some big H&W tenancies. So as well as the usual three-year agreement, the company has introduced a six-year deal - but still no long lease.
"The six-year agreement is for bigger pubs and requires a bigger investment from the licensee," explained Andrew. "They may need £25,000 to buy the equipment alone and a six-year deal is a chance for them to get their money back.
"It's also saying to them that we genuinely want them to stay, that we trust them. It demonstrates a two-way relationship."
Even with the three-year deal, Andrew believes there is an underlying security. "Our policy is always to renew a tenancy agreement if possible and give the tenant the option of going or staying," he said.
But by making that security more explicit he hopes to attract a new breed of licensee to the H&W estate. When Andrew arrived in Dorset, H&W already boasted a high proportion of attractive rural pubs many of which were food-led. But his aim is to drive food even harder by recruiting entrepreneurial chefs.
"We get a lot of enquiries through our website and hotline," he says. "People like the idea of running a pub in Dorset. But what we're really looking for is a topline caterer who wants a Michelin star, a more entrepreneurial operator.
"We're not afraid of trying people completely new to the pub trade. We can help a chef with flair to get over difficulty of running their own business."
A new training and coaching programme, launched this year with legendary licensee-trainer Bill Stanaway, is also firmly geared towards catering, and H&W, with the help of pub menu consultancy the Food & Beverage Group, is developing a CD-ROM, which will go out free to all licensees.
"We were surprised to find that more than 90 per cent of our licensees used computers and we have put 160 dishes on a disk with recipes, recommended suppliers and a menu set-up," says Andrew. "Tenants aren't tied to us for food but we are saying to them here's our ideas for your type of pub. Every single tenant should be able to make use of it. We need to ensure everyone has the best support for their food - it's what drives most of our businesses."
H&W should be able to provide plenty more opportunities for entrepreneurial licensees. It aims to grow its estate by eight or 10 pubs a year, picking off freehouses in the West Country without treading on the toes of its near-neighbour Palmers.
The big companies are in the same market as well, of course, but Andrew believes a regional brewer like H&W can gain the edge.
"Freeholders like to deal with smaller companies which we can act quickly," he says. "We don't haggle and they may already be buying our beer and want the pub to stay in local hands."
In that, Andrew is going head-to-head against his former employer, of course. But he finds working for H&W a very different experience to Punch.
"I know every business on the estate," he says. "I can pop in and talk to them, I'm close to what's going on and I feel I can get to know pub add value to the discussion.
"Hall & Woodhouse is a company that does talk about its pubs being around in 100 years time. We are building the business for the next generation, we ask ourselves what will the pubs be worth in 20 or 30 years - we're interested in more than just the next three."
Hall & Woodhouse has invested £2m in refurbishments around its tenanted estate this year, and the Portsmouth Hoy on Poole quayside (pictured) has weighed in as one of the biggest following a £250,000 scheme.
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