Tenancies & Leases Guide: Pubco Profile - Punch Taverns
The giant pubco's new Retailer Agreement aims to make life as simple as possible for any potential lessee.
Many of the problems between pub tenant and landlord are caused by poor communication, even at the outset of a relationship. An aspiring publican's eyes are clouded by the dream of running their own business, and too often the company is over-keen to get a rent-paying tenant into a hard-to-let house.
It's all made worse by the agreement itself. If they can't understand the legal document or can't be bothered to read the small print, licensees just don't know what they're letting themselves in for - until it all goes pear-shaped.
So the most striking thing about Punch Taverns' new Retailer Agreement, which replaces the much-maligned Punch Growth Lease, is that it's just three-and-a-half pages of large print, including the page where you sign.
There are another 30-odd pages of explanatory notes, of course, but it's clear that Punch is trying to make it as simple as possible.
Perhaps more significantly, the deal is one of the most flexible in the market.
Lessees can choose:
- the length of term, from five years to 30 years
- their beer range, price list and discounts
- the extent of the tie on non-beer products
- whether it's repairing or non-repairing
- a break clause to enable them to get out in the first 12 months.
Rent is calculated according to the permutation of options the licensee chooses - and it's all there on the first page of the agreement.
For Punch commercial director Francis Patton the most important thing about the Retailer Agreement is that it gets away from the pubco forcing a particular kind of deal on a pub and publican it just doesn't suit.
"We need to understand the kind of business that a prospective licensee wants to run and what kind of an individual they are first," he says. "The agreement drops out of that understanding.
"Problems have occurred because our retailers didn't know how we have calculated their rent. Now it's all there in the agreement."
"It's very clear how the rent is made up," added chief operating officer Adrian Fawcett.
"For example, it shows exactly how we have taken into account share of machine income or a tie on soft drinks or wines. Licensees who sign the agreement not only know where they stand, they have chosen where they stand."
All new deals will come under the Retailer Agreement, and existing licensees also have the chance of switching from their existing agreement. That includes the 3,100 Pubmaster tenants whose integration into the Punch organisation was completed in June.
Case Study: the Regency, Harrogate, Yorkshire
One of the first to sign up to Punch's new Retailer Agreement is Avril Wrigglesworth, who has taken a lease on the pub she was managing.
The deal, which involved Punch buying the pub at the same time that Avril signed the agreement on the Regency in Harrogate, Yorkshire, found its way into the company's record books as one of its fastest ever lettings - 23 days from first viewing to legal completion.
"I have been presented with lease documents before while at another pub and found the legal jargon very off-putting," said Avril, who has managed the community house for the past two years. "The Punch agreement was considerably better. Everything was in black and white and the language was easy to understand.
"This is a fantastic opportunity for me to make this pub my own and we are wasting no time in making some improvements."
Pictured: Avril Wrigglesworth and Punch business relationship manager Scott Weir.
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