Enterprise compensates lessee after assignment halted

By Rob Willock

- Last updated on GMT

The Cross Keys pub will be Enterprise's 15th managed site
The Cross Keys pub will be Enterprise's 15th managed site

Related tags: Bermondsey pub company, Inn

A lessee who had her assignment process scuppered by Enterprise Inns is now running the pub as a managed site for the company until a new general manager can be found.

Rachel Burke of the Cross Keys in Knutsford, Cheshire, and her husband, Andrew, have agreed to stay at the pub until the end of March, after accepting compensation from Enterprise — equivalent to the value of the assignment premium.

Enterprise is planning to make a significant investment in the site — a 17th-century coaching inn with 13 letting rooms — with work expected to start within the next six to eight weeks, and to recruit a new general manager.

The Cross Keys is the 15th managed pub within Enterprise’s Bermondsey Pub Company estate. A spokesman said: “A deal has been done with Rachel and Andrew, and it’s all been very amicable. They’re staying on at the pub for a couple of months until a new manager can be put in place.”

He added Enterprise had agreed a level of compensation that “reflected what the couple had been offered as a lease assignment”.

'Unintended consequences'

The Burkes had originally been told by Enterprise that their lease renewal and assignment to local businessman Matthew Mooney had been halted at the last minute because of the imminent introduction of a market rent-only (free-of-tie) option for lessees. Chief executive Simon Townsend described the decision as “one of the unfortunate unintended consequences” of Government legislation.

Rachel Burke told the Publican’s Morning Advertiser​ she was satisfied with the proposed outcome: “Things are progressing in the right direction, and Enterprise has co-operated with us thus far.”

However, she added that she would prefer to wait until the deal was finalised before commenting further.

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Posted by Northern licencee,

I am not sure why a company responding to impending legislation is disgraceful or immoral it would only be prudent. I can only assume you think ETI attempting to avoid the consequences of the MRO is disgraceful or immoral, whereas the reality is thinking they won’t is naïve.

Don’t get me wrong it isn’t that I think ETI hasn’t been, isn’t and wont be disgraceful or immoral just that this behaviour doesn’t prove it and is a clear unintended consequence of MRO.

It still isn’t clear that these agreements are necessarily bad for the tenants. As we regularly hear that ETI and their ilk regularly hound good operators out of their businesses with excessive rent demands based on inflated profit forecasts. If you are in the position of running a pub, trading well but not making a profit, approach your landlord and ask to go on one of these agreements, where they become responsible for the overheads except staff. If they believe their profit forecasts they should be able to offer you a deal whereby you are much better off and the chances of you going bust are negligible.

I would also suggest getting some advice from a small business representation group

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Doing the right thing?

Posted by Veritas,

Rachel Burke stated she would prefer to wait until the deal was finalised before commenting further.

Objective Observer would do well to do the same before making such a ludicrous pro pubco statement, especially with Enterprise Inns long history of reneging on deals, and short changing departing lessees on final settlement.

Let's leave the post mortem until the money is in the Burke's account, and they are finally able to vacate the pub that they believed they had sold.

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Martinez - what rubbish

Posted by Dave Mountford,

This is another biased piece that fails to delve into the real reasons behind the behaviour of the company. There is nothing in this story for you to arrive at the conclusion that they are doing the right thing.

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