Marston's wins franchise agreement accreditation
Brewer and retailer Marston's has won British Franchise Association accreditation for its Retail Agreement.
Marston's introduced the Retail Agreement within its tenanted division in 2009 to address the challenging market conditions in the tenanted pub industry.
Marston's Pub Company has responsibility for the retail offer, including drinks brands sold, food menus and retail standards.
The franchisee earns a percentage of revenue and is responsible for staff costs. Marston's Pub Company is responsible for other costs.
Benefits to customers include improved standards, and consistent value-for-money offers.
It is the company's intention to convert approximately 600 tenanted pubs to the Retail Agreement by the end of 2013.
Around 230 pubs have been converted to date with encouraging results, and the company remains on track to convert a further 100 additional pubs by the end of this financial year.
The average expenditure per conversion is around £50k per pub, with a minimum target return on incremental capital expenditure of 20%. Marston's Pub Company remains on track to achieve these returns.
Encouraging entrepreneurialism
"The Retail Agreement is proving to be an appropriate and successful response to the challenges faced by many operators in the tenanted pub industry," said Ralph Findlay, chief executive of Marston's.
"It encourages entrepreneurialism amongst licensees, enabling them to manage successful businesses with the benefit of our support, economies of scale and retailing expertise.
"Our recent research has found the number of applicants for the Retail Agreement to be three times higher than those for a traditional tenancy, with 30% of applicants coming from outside of the industry.
"Franchise accreditation represents a further step in the development of the Retail Agreement, and will help us to attract more high quality people to operate our pubs."
