Batemans tenants can earn cash back

Batemans' new tenancy agreement lets hosts earn back cash plus interest on any investment they make in their pub.

Under the new Capital Investment Agreement, tenants are allowed to invest in areas that are usually the landlord's responsibility.

Landlord and tenant agree on a fair maintainable trade (FMT) target and once turn-over increases above this amount, the tenant can cash in his investment on any anniversary, reclaiming the initial sum plus interest.

For example, if a host invested £25,000, and in-creased turnover from the FMT of £175,000 to £210,000 in year one — growth of 17.6% (that's £30,800 less inflation) — he could cash in. The cash back for the licensee would be the initial £25,000 input, plus the 17.6% proportion of growth, which would equal £29,400.

Rob Jones, profit partnership director at the Lincolnshire brewer, said: "In any industry, if you have the ability to take the competitive advantage and be a leader, then that's really powerful.

"Some of the bigger companies have to account to their shareholders, and they don't have the flexibility to do it. I'm sure it has strengthened our position in terms of recruitment."

Writing in the MA this week, Jones said Batemans' relationships with licensees have been transformed after it ended rent reviews in September 2008.

"As a result of taking away rent reviews our licensees now have no fear; we are real partners," said Jones.

"Previously, it was difficult because if one of our tenants had problems they were reluctant to say. Now they just open their books, even though they aren't required to share that information.

"I'm an advocate of the no-rent review system."