Assessing the relationship between pub companies and their tenants
Pubcos of course, would counter such perceptions; insisting they’ve turned over a new leaf, that the bad old days are well and truly a thing of the past.
If they’re to be believed, honesty and trust is the new modus operandi; resulting in sustainable, mutually beneficial long-term relationships.
Many of us it must be said, remain deeply sceptical; understandably so given the number of ‘carcasses’ that litter the countryside.
Not a day goes by it seems, without news of another victim being dragged off kicking and screaming into the bushes for a damned good mauling whilst the rest of the flock looks on in horror.
Is it remotely credible therefore, that the ‘wolf pack’ have somehow managed to wean themselves off choice cuts of lamb served with mint sauce; now content to survive on a diet of tofu and lentil cutlets?
Given their track record, it is a little difficult to believe, isn’t it?
With these considerations in mind, I’ve devised a questionnaire to try and ascertain how far the pubcos have travelled down the road of reform.
So, how do you pubcos out there shape up?
Are you nothing more than a wolf in sheep’s clothing, or have you really evolved into a caring, sharing herbivore?
1. A couple of prospective tenants come to see you waving a large severance cheque about
Do you:
a) Point out that money alone is no guarantee of success
b) Make sure they don’t leave before signing something
2. The exterior of one of your outlets looks distinctly shabby
Do you:
a) Call in a reputable contractor to get the exterior decorated
b) Promise your tenants a couple of free barrels if they carry out the work
3. The tenants at one of your pubs decide to move on. They request their deposit and F and F money
Do you:
a) Give your partners all the money to which they’re entitled
b) Look for ways to inflate liabilities so you don’t have to give them anything
4. A number of tenants ask you why they haven’t received any countervailing benefits
Do you:
a) Set up a meeting to assess your tenant’s needs
b) Send a few beer mats out with the next delivery
5. A tenant has fallen into arrears with payments
Do you:
a) Contact the tenant to ascertain if there is a problem
b) Arrange for the bailiffs to go in when the pub is at its busiest
6. The beer monitoring equipment in one of your pubs shows confusing data
Do you:
a) Arrange for an engineer to go around and check everything is OK
b) Fine the tenant on the spot and place the debit on the trade account
7. Your BDMs complain they haven’t had a pay rise for several years
Do you:
a) Explain that these are difficult times for everyone
b) Instruct them to start hiking rents
8. Shareholders make it clear they’re far from satisfied with your CEO’s performance
Does he:
a) Acknowledge the culture of rewarding failure is no longer unacceptable and agree to a pay cut
b) Award himself a whopping great pay rise
9. Several of your pubs have received no investment in years
Do you:
a) Allocate funds to pay for the work to be done
b) Try and convince prospective tenants to pay by advertising the sites as ‘refurbishment opportunities’
10. You call round to one of your pubs to give a tenant an appraisal of dilaps costs
Do you:
a) Suggest the tenants save a lot of money by doing the work themselves
b) Check beforehand how much the deposit and F and F is worth, add a bit extra to the total and inform the tenants you’ll happily carry out the work on their behalf
11. Prospective tenants inform you they have no experience of running a pub
Do you:
a) Advise them to obtain work experience before proceeding with the application
b) Reassure them it isn’t a problem and suggest that one of your problem outlets would be an ideal starter opportunity
12. You recognise that from time to time tenants will need to carry out routine maintenance work on the pub
Do you:
a) Acknowledge that partnerships are based on trust and allow them to withdraw money from their deposit account on the proviso that they return it later
b) Demand that ingoing tenants pay £7,000 per annum into a maintenance fund that has no cap
13. Prospective tenants enquire about dilaps work carried out on the pub
Do you:
a) Provide detailed information of the work carried out, together with certification by an independent surveyor
b) Assure them that everything is fine and neglect to mention that you sent a cowboy in the day before to patch things up
14. One of you outlets has had 6 tenants in the last two years
Do you:
a) Conclude the pub is in desperate need of investment and commit funds to the site
b) Realise churn can be a highly lucrative sideline and merely wait for the next pay cheque to come along.
15. Your tenants complain their rents are too high
Do you:
a) Acknowledge that times have changed and sit down with them to negotiate a more realistic premium
b) Point out that as they’re not reasonably efficient operators nothing can be done
16. What factors do you take into account when calculating FMT?
a) Prevailing market conditions
b) The need to service a debt mountain incurred through speculative property investment
17. Tenants thinking about taking on one of your pubs enquire whether discounts are available on barrelage
Do you:
a) Inform them that you need to see a detailed business plan before a decision can be made
b) Point out that the high cost of beer is solely down to government fiscal policy and suggest they contact the Chancellor
18. A tenant has a 30 year old lease which is up for renewal
Do you:
a) Ensure the lease is renewed without any changes to existing terms and conditions
b) Slip in a few additional clauses in the hope that the tenant won’t notice
19. One of your tenants is close to bankruptcy but has managed to find a buyer for the lease
Do you:
a) Help the tenant push the sale through as quickly as possible
b) Delay proceedings in the hope the tenant goes under, thereby allowing you to trouser a tidy profit
20. A tenant takes on one of your pubs and grows trade by 40% in the first year
Do you:
a) Offer your partner additional incentives to ensure that momentum is maintained
b) Hike the rent
How did you score?
A answer = 1 point
B answer = 2 points
Score: 32 - 40 It’s clear that you remain unashamedly carnivorous. Roast lamb will continue to feature prominently on your menu!
Advice to tenants: Give this particular beast a wide berth
Score: 25 - 31 You’ve begun to adopt some lifestyle changes but still can’t resist grilling a few lamb chops on the barbecue from time to time.
Advice to tenants: Proceed with extreme caution
Score: 20 - 24 You’ve turned your back on meat and become a vegan. Salad, muesli tofu and pulses are your culinary bedfellows. Future plans include saving the whale, installing solar panels in your pubs to reduce carbon emissions and campaigning for world peace.
Advice to tenants: A truly ethical partner – one we can do business with
