A stepping stone into the on-trade

Pub companies argue that the leasehold model remains strong

Pulling a pint in a pub

THE dream of running a pub is one which is shared by many both in and out of the trade.

The reality for many, however, is that the capital required to open an independent licensed venue is simply too great.

Therefore, leasing a pub can be a good way for would-be operators to become their own bosses – without taking on the risks and costs associated with purchasing a venue outright, pub companies told SLTN.

David Balmanno, business development manager for Scotland at Admiral Taverns, said: “Taking on a tenancy with a supportive partner is a much lower risk approach.

“As a [lessee], you are essentially running your own business. It’s highly rewarding but it can be incredibly reassuring to know you have an experienced team behind you, whose knowledge and expertise you can draw on.”

Taking a similar stance, Brian Davidson, Star Pubs & Bars regional operations director for Scotland, said there are three key benefits for the firm’s lessees.

These include low entry cost, which he said gives operators “the chance to get a great pub in a prime location without the high levels of borrowing required to get a comparable freehold property”; a “comprehensive package of support covering every area of a pub business”; and it also gives lessees “access to capital and the opportunity for licensees to completely refurbish and personalise their site”.

Echoing these views, Mandy Southall, regional operations director for Punch, said running a pub business “is a fantastic way to be your own boss, meet new people, and support your local community”.

Southall added that the tenanted pub market in Scotland “offers huge potential for tenacious and committed individuals looking for their perfect pub business”.

While people are said to be more cautious during times of economic uncertainty, the tenanted pub model “has proven to be robust in challenging times”, said Balmanno of Admiral Taverns, who claimed more first-time operators are entering the trade via pubcos.

“Encouragingly we are seeing an increasing trend in the proportion of enquiries we are getting from first-time licensees,” he said.

“In most cases they will have worked in the broader hospitality industry but have never had their own tenancy; it’s great to see new talent and skills coming into the sector.”

But what do pubcos typically look for in prospective lessees?

Southall of Punch said all potential publicans “are required to present their vision for their pub business as part of their business plan”.

“We then work very closely with them to ensure the vision is right for the pub and the customer base,” explained Southall.

Balmanno of Admiral Taverns said the company tries “to keep things as simple as possible”.

“If a licensee is interested in hearing more about how they can run a pub with us, then the first thing we always say is ‘pick up the phone and let’s talk’.

“The next stage is to introduce them to our team who can help them identify a pub that is right for them.

“They will then need to complete a simple business plan outlining their vision for their pub.

“We will tailor the support we offer around that, ensuring they have the right agreement and level of support they need to set them on the right path.”

And for existing lessees looking to branch out, Davidson of Star Pubs & Bars said “taking on a second or even a third or more is a well-established way for Star [lessees] to build on their existing success, expand their businesses and increase profits”.

For those considering stepping into the on-trade as their own boss, now could be the time – with Davidson noting that, in his experience, “the market for leased pubs is extremely strong, with a high demand for sites”.