Kevin Jones, ex-tenant of the Red Lion in Otley, West Yorkshire, wrote the letter to Enterprise Inns shareholders explaining the reasons why he was in debt and could not keep to a repayment plan. He included details of the way the company dealt with his diagnosis of bladder cancer and his subsequent financial difficulties in the development of a nightclub above the pub.
He wrote: “The only problem I have had is finance. I no longer have the options I had and I can only borrow money if I have the lease as security.
“Enterprise Inns will not give me the lease unless I am debt free and able to provide cleared funds for the project. This is a catch 22 situation. They will also not spend any money on the pub – which it seriously needs in order to retain the customers we have built up.”
Jones took on the pub in November 2011 after a series of closures and tenant changes. A previous landlord was taken to court to return the premises licence, Jones stated in the letter, during which time the pub was known locally as ‘the dead lion’.
Jones’ business plan showed a growth at 20% per month for six months but the pub made a loss for the first six months, only starting to make a significant profit after the first year. Since the refurbishment of two pubs nearby Jones admitted trade “dipped well below our breakeven point”, not helped by “extreme local conditions which decreased trade town wide”.
Jones was given a month’s notice to clear his debt and said he wrote to Enterprise advising them he would be going to court to seek damages and a refund on the money spent on planning permission and licence applications. On 13 June Jones’ business development manager told him he had to leave on 24 June.
Jones displayed the six metre by two metre letter outside the pub on Friday after the company failed to renegotiate a deal to keep the pub open.
In a statement, Enterprise Inns said: “When Mr Jones took on the tenancy, he was fully aware of the challenges facing the Red Lion.
“Unfortunately, Mr Jones has not developed the business in keeping with his original plans, and we have worked extremely hard with him - including setting up payment plans and providing generous credit extensions – with the clear objective of developing longer-term plans for his continuing occupation at the Red Lion.
"However, notwithstanding the other business challenges he has faced, and despite our assistance, Mr Jones has persistently breached the terms of the agreement under which he occupies the Red Lion, negating any chance of a mutually acceptable outcome to our discussions. We have therefore had no alternative but to serve notice in accordance with the terms of his tenancy agreement.”