Monthly Archives: February 2009

Rent Valuations by Pub Co’s, BDM’s at Rent Reviews.

Having studied the so called method of rent assessment used by the Pub Co’s for Rent Reviews.

Firstly all rents are supposedly worked out by Valuers and BDM’s on the future sustainable earnings potential by a competent operator or an alternative method of operation??? Valuers, at least qualified valuers in the main have never run a pub and would have virtually no idea how to expand a business without personally running it, understanding the local problems, features, advantages and disadvantages, BDM’s the majority have very little hands on experience, certainly neither are capable of being called a competent operator, yet these people dictate rental levels that are totally unsustainable in the majority of pubs, causing extreme hardship and lack of profitability to the majority of lessees.

They are reluctant to define a competent operator, in the words of one of the BII Vice Chairman, someone with at least three years profitable experience and some of the BII advanced qualifications or five years profitable experience with basic qualifications, he should know and I agree with him.
Yet these companies across the board put all new lessees through a basic five day course with the APLH, and maybe food hygeine or cellar management if they are lucky. This at the greatest stretch of the imagination does not make a competent operator. They are then put into pubs with rent levels based on this goofy method, it is totally obscene and the fall out factor is enormous and dire, most people lasting 12 to 18 months before their money runs out. As an experienced operator I would not touch the majority of them without accurate up to date accounts that prove the rent is payable with a profit, not some “will o the wisp” calculation ignoring the existing business turnover.

Bringing any Rent Review seriously into question.

Beware of Pub Co’s Bearing Gifts

A small brewer was taken over by one of the major Pub Co’s who sold on all the pubs that they did not want to a number of smaller Pub Co’s. I received a call from a lessee who had been there for about seven years, he had been invalided out of the Navy and had taken this village pub by himself and ran it as a village boozer with a reasonable trade. Just before the pubs were first sold his BDM came in and said that they had made a mistake, they should have charged him about £5 for every barrel of local real ale that he had bought, everything had been declared but the brewery had omitted to charge him, consequently he owed them several thousand pounds. The BDM said that he would have words with the Director and get it written off which he did and was agreed but not confirmed in writing. The pub changed ownership and the new company sent him a bill for several thousand pounds, he told them what had been agreed and the pub was sold to a minor Pub Co, who immediately tried to claim the money, threatening bakruptcy, court action etc. The lessee was terrified and called me I got someone to advise him the Pub Co backed off and then made him an offer to vacate the pub, which he accepted, thinking he was going to retire happily, in the last week they slapped him with a dilapidations bill that wiped out all the compensation for vacating the pub. They wanted the pub for redevelopment.
Another pub with the same company took over a very succesful pub with a good landlord who had been there twelve years, he said he wasn’t worried about the change of ownership. He phoned me nine months later in tears saying that they had bankrupted him, again they wanted the pub for redevelopment, they induced him to sign a new lease without professional advice and hung him out to dry, how they did it I have no idea. But someone runs a successful pub for twelve years does not go bust without something untoward occuring???