Times they are a’changin

Having worked within the pub trade for many years it is yet again changing. The economic climate, recession and other newly introduced legislation have meant that the leased and tenanted model has been scrutinised and challenged many times.

Times they are a’changin

This is not to say that the lease and tenancy model doesn’t work, but perhaps it doesn’t work for all sites and all operators. The industry is realising that there is no one size fits all; in an industry that is built on diverse personalities, it seems absurd that in this century we would expect a round peg, round hole approach.

BUT IS CHANGE A GOOD THING?

When I started FMP in 2009 it was all about leases or tenancies, there was no such thing as a retail agreement nor was there talk of leased and tenanted pub companies moving into a managed arena. Fixtures and fittings were paid on the day of change and a three-year agreement didn’t have a notice period. This model has now proved to be unsustainable.

We now have agreements that suit all skill sets and budgets, with excellent support and training offered as part of the deal. From Franchises (or a “pub on a plate” as I like to call them) to flexible deals, all the pub companies are reinventing the wheel and competing to make their company attractive to all. The interest to work within the industry is higher than ever and potential operators have a greater choice of agreements to choose from.

So even in the relatively short time we have been supplying leads to the pub industry there, have been a number of changes and it appears that the changes are not over. It is up to us to evolve with the sector we operate within.

YOU NEVER STOP LEARNING…

We are moving into a head hunting and fully managed recruitment sector, with a new website to follow. In all of my career the only sector I didn’t work within was managed and if I am honest I never thought that would be a focus for our business.

So like many of our clients, we have reviewed our business model, and whilst the Findmypub core and outsourced business will always be a major stakeholder for our ongoing strategy, we must embrace the changes within the industry. With the appointment of Carl Hinett and the development of the FindmypubJOBS.com business we are really excited to embark on the new phase of our journey.

So I guess change is inevitably a good thing!

HL

Helen Lees
Managing Director


1 thoughts on “Times they are a’changin

Paul Thomas

Very interesting read Helen, when you started your business in 2009 we were one year from coming out of our lease - about the same time as the tax escalation on alcohol by the then chancellor of the exchequer and the noticeable rise of alcohol cost prices. This, in my opinion, gave rise to the demise of the leased and tenanted sector, those who were ideally placed in a food led environment appeared to be safer than those in a wet led outlet. Whilst pubco were selling kegs to multiple operators at for example £30 per 11gallons tenants and lessees were having to pay four times as much plus VAT of course. Over the course of time since then many good operators have handed the keys back to the pub cos and the rise of holding companies has taken place to avoid pub immediate closures, but alas as leases and tenancies become unsustainable we have lost over 10,000 pubs since 2005 because of closure. The question I often ask myself is what caused the pub closures? I believe it was down to Government intervention into the rise of alcohol prices, in 2005 I was selling on average a pint at £2.25 by 2010 I was forced to charge £2.95 to maintain margin, by end of 2010 I was out of business as people walked to Whetherspoons to pay £1.89 a pint. So what have we learned over time, well the pubcos had a choice they could absorb the cost of the alcohol rise keeping prices low to encourage growth and maintain a tenanted estate or raise them and the consequences we now live with - the decline of tenanted growth. Then was the introduction of the franchise model based on 80-20 rule; the pareto principle, which in my view was a knee jerk reaction to the market, instead of trying to fix what was undoubtedly broken this was a diverse way to keep operating but at a cost in some cases of losing the tenant. Looking to the future it appears the pub cos or some of them have given up on the leased and tenant model and are focussing on the managed estates, one to watch is Enterprise Inns and there new Bermondsey managed estate coming up, headed up by Carol Rabone. In my view I think when all the dust has settled (if it ever will!) I see a free of tie environment , it has to come but the loss on drink sales by pub cos may well be reflected through higher rents, whether fair market- we will have to see?. There is no magic wand when it comes to success in business as a tenant or lessee, but I believe future operators need a free of tie fair agreement, a good location for the business, an different food offer and of course be an experienced operator.


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