Enterprise: free-of-tie options for all

By The PMA Team

- Last updated on GMT

Related tags Rent review Leasehold estate Renting

Enterprise: free of tie options available
Enterprise: free of tie options available
Enterprise is to offer all its licensees the chance to go free-of-tie on wine, spirits, minerals and AWP machines next year. The move follows the...

Enterprise is to offer all its licensees the chance to go free-of-tie on wine, spirits, minerals and AWP machines next year.

The move follows the re-letting of around 860 pubs in the past year on terms that offer more flexibility.

The company will also move to offer greater transparency on how tenants' improvements are treated on rent review.

Chief operating officer Simon Townsend told the Morning Advertiser: "Every Enterprise (ETI) licensee has now received written confirmation of our long-standing policy that, at rent review, we ignore upwards-only rent-review clauses in all agreements, and that RPI indexation may be upwards or downwards as appropriate, regardless of the terminology of an agreement.

"This has, of course, been ETI custom and practice for years, but it has become particularly pertinent in a period of negative inflation.

"As a result, ETI licensees on indexed agreements are currently benefiting from automatic rent reductions due to the application of negative RPI since March 2009.

"On insurance matters, we have always guaranteed to reduce the recharge to any licensee who demonstrates that they can achieve the same cover at a lower cost. This occurred on only 15 occasions in 2009, which would suggest that our insurance cover is extremely good value, but we are making it even easier for licensees to compare and contrast insurance packages.

"We are expanding the level of disclosure provided at the time of new lets and rent reviews, and we are ensuring that no licensee will be able to enter into a binding lease or tenancy agreement without their formal business plan having been signed-off by a qualified trade accountant.

"In an additional development, we will publish our approach to the sometimes complex issue of the treatment of tenants' improvements.

"We are also progressing a whole range of commercial developments that will further enhance the range of options available to retailers who opt for an Enterprise agreement, and we are planning to make this level of flexibility available to existing Enterprise retailers."

Chief executive Ted Tuppen also stressed the company fully supports the new Pubs Independent Rent Review Scheme (PIRRS), designed to provide a low-cost, binding resolution to disputes that may arise at rent review.

He told analysts that Enterprise had "slightly had the whip-hand" in the past in that tenants who wanted a "proper fight" via rent arbitration would need to find £30,000. Enterprise also abandoned its annual estimate of average licensee earnings this week at results.

Tuppen told analysts that he was "uncomfortable" producing a figure because to show an average in the current climate would "invite criticism".

"I don't think it's appropriate at the moment".

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