Opportunities abound for prospective operators, pub companies say
Perhaps you work in a bar or restaurant but harbour an ambition to run your own venue. Are you managing an outlet but keen to have your own business? Maybe you already have a pub and want to expand with a second site.
Whatever your current position, if the answer is ‘yes’ to any of the above the good news is that it seems there’s currently plenty of opportunities in Scotland’s leasehold pubs sector.
Coupled with the increasingly diverse range of support pubcos say they are offering their lessees – and the investment many are making in their Scottish outlets, it seems now might be a good time to make the move.
Craig Grant, marketing manager at Iona Pub Partnership, which has 100 sites in Scotland and is “actively looking to grow”, said the sector is particularly buoyant at the moment.
“I think the market has had a pretty exciting year in terms of what seems like a great confidence sweeping single operators looking to make their vision a reality and also multiple operators looking to get in first in the next upcoming areas at a faster pace and, in some instances, outside their comfort zone,” he said.
“We are seeing an influx of tenants with real vision and a clear idea of what they want; there are growing demands for sites and support systems that complement niche offers – something which we are always excited to get involved in.”
The comparatively low cost involved in obtaining a leasehold over a freehold is cited by pubcos as being especially attractive to those who want to run their own business.
Ingoing costs for Star Pubs & Bars lessees are kept “as low as possible”, according to trading director Chris Jowsey, to try and ensure the pubco doesn’t lose “talented individuals due to lack of funding”.
“That said, under-capitalisation is a major cause of business failure in all sectors and we believe that applicants need at least £10,000 in cash to get their business off to a successful start,” he said.
“With many freehold pubs prohibitive to buy, multiple operators are opting for leased pubs due to the access it gives them to great pubs in good locations without requiring massive capital investment, which, in turn, enables them to expand more quickly.
“For many newcomers to the trade and for managers making the transition to a leased operation, the opportunity to ‘be their own boss’ and to be running the business for themselves while still getting a high level of support from their chosen pub operator to help grow their business is very attractive.”
The diverse range of lessee support said to be offered – and the importance of that to both parties – was underlined by the pubcos contacted by SLTN.
Mark Hannah, business development manager at Manorview Pub Partnerships – the leasehold division of Manorview Hotels & Leisure Group which was set up 18 months ago, said the company’s leasehold partners have full access to Manorview’s resources, from accountancy and book-keeping services to marketing and menu advice from the group’s executive chefs.
“We are particular about our partners succeeding and work alongside them at every step,” he said.
“We treat it like a true partnership, conducting business reviews on a regular basis and putting plans in place with our partners to ensure our businesses thrive in a difficult market place.”
The importance of support was underlined by Suzanne Smith, head of recruitment at Admiral Taverns, who said the pubco can provide “as much or as little assistance is needed”.
“Our focus is to provide licensees with business-building advice, alongside access to a range of experts and professional services to help them grow a successful and sustainable business,” she said.
“We aim to work with licensees that are passionate, driven, hard-working and proud.
“Experience isn’t always essential – on recruiting someone for a pub, a ‘training needs analysis’ is completed to establish what areas of support are required.
“We have an excellent training programme, with courses covering every facet of running a pub – from finance to food – which can be tapped into depending on those needs.”
Clive Chesser, business unit director for Belhaven tenanted and leased pubs – part of Greene King Pub Partners, agreed that experience of the trade is not a prerequisite.
For prospective lessees, finding the right pub and the right pub company is key, he said.
“It has to be the right match so we deliberately look for enthusiastic, business-focused people that share our values and have a passion for pubs; prior experience is not always essential,” said Chesser.
“We make it our mission to be flexible and a company that is easy to do business with, and our pubs are run by both experienced and multiple operators as well as new and younger licensees, busy creating their first success story.”
Before prospective lessees take that first step, however, there are a number of factors that must be given careful consideration.
Gerry Carroll, chief executive of Hawthorn Leisure, advised anyone considering taking on a pub lease to research all that’s involved in running an outlet to “really understand what you’re getting in to”; establish the type of venue that would best suit their experience and ambitions; and seek professional advice when it comes to putting together a business plan.
“New tenants need to know what they are getting in to,” said Carroll.
“Choose your pubco carefully. There are a number of different arrangements that might suit different needs; it is important you feel comfortable with the company and individuals you will be working with.”
The importance of careful consideration was underlined by Brian Davidson, regional operations director for Scotland at Punch Taverns.
“For those looking to take on their first leasehold pub my best advice is don’t rush into anything,” he said.
“Take your time before committing to running your own business; whilst very rewarding it is hard work and you need to be prepared for this.
“Make sure you create a proper business plan – we require this from all our prospective partners and have a set template for them to follow.
“Finally, don’t let the heart rule the head.”