Star hails surge in substantive leases

10-Jul-2013 - Last updated on 11-Jul-2013 at 07:37 GMT

Related tags Contract Star pubs & bars

Substantive leases have risen by 50% in the past six months

Star Pubs & Bars, the Heineken-owned leased pub operator, has seen a 50% rise in licensees taking substantive leases since the launch of its new agreement and support package in November.

Meanwhile, visits to its website about the agreements have risen 40%, with applications up 15% on 2012.

Trading director Chris Jowsey told the PMA’s sister title M&C Report that around 65 lessees now operate under the Business Start-up Agreement, whereby lessees can terminate their contract with three months’ notice at any time in the first three years without penalty.

Under the first-year support package, Star Pubs & Bars pays for some key costs in the first year such as Sky and business rates.

Jowsey said: “We’re delighted that the new agreements we introduced six months ago are proving attractive. Our strategy of offering prospective lessees high support and a low risk commitment is encouraging people to take the plunge in a difficult trading environment when previously they might have waivered.

"It is a clear demonstration of our belief in the business potential of Star Pubs & Bars’ pubs and of our commitment to helping lessees build strong foundations on which to grow long term sustainable businesses.

“In December we had our best recruitment month ever with the number of substantive leases signed double the average for the year and web traffic up 50%. Six months down the line, it is clear that this interest isn’t transitory. We are seeing sustained growth which is proof that the measures we’ve introduced resonate with prospective lessees.”

BDM boost

Star Pubs & Bars is to increase the capabilities of its business development managers (BDMs) to help them focus on “coaching and inspiring” lessees.

Jowsey said all its BDMs have now passed certificates in multi-retail management and “the next phase is to really develop their retailing skills”.

He said: “We are investing quite a lot of time and money towards the back end of this year, and into next, on a specific retailing development programme for the BDMs so they can hopefully add more value to those lessees, particularly start-ups.”

The programme is set to be introduced in Q4. Jowsey said he expects lessees to see the impact in “early 2014”.