Monthly Archives: October 2009

Pub Employment Questions and Tips

 

Pub Employment Questions and Tips

New Employment Regulations came into force in April 2006.

The Vendor must provide details of all staff that will be taken over by the Purchaser.

I normally close for a few days to refurbish and advertise for staff, which any existing staff can apply, ensuring that all existing staff have been paid redundancy etc, where applicable.

It is not always possible to do this with key employees, in which case you need all the records of their job titles, when they started, how much accrued redundancy is due should they leave etc, your Accountant should be able to give you a comprehensive list of the requirements and your responsibilities.

Check for any employment disputes during the Vendors ownership or any possible pending regarding existing staff.

Do not ignore this legislation, it can be extremely costly if you get it wrong.

These are the basic questions that you may be asked and need answers to whilst interviewing staff or you need answers to if you are going to work for a company.

There will be others which we will be delighted to add to the list, if you would keep us updated.

1. What are the hours?
2. What breaks am I entitled to?
3. Is there the opportunity for paid overtime?
4. What are the arrangements for bank holiday working? Will I be paid more than my basic wage, or be given time off in lieu?
5. How long is the probation period?
6. Is it a permanent post or a temporary position i.e. One year?
7. Who will I report to?
8. What will my duties be?
9. How much holiday entitlement will I have?
10. What is my notice period (give and receive)?
11. Do I need to supply my own clothes, or is a uniform provided?
12. When will I be paid?
13. How will I be paid (cheque, cash, bank credit)?
14. Do I get free/subsidised meals while on duty?
15. Am I entitled to pension? If so, what is my contribution, and what is the employer’s contribution?
16. What (if any) assistance will you provide for further training/personal license?
17. What specific skills am I expected to demonstrate?
18. How will I be assessed that I’m doing the job well?
19. Why has the job become vacant?
20. What changes are there for promotion/advancement?
21. If the role requires heavy lifting: What are the Health & Safety guidelines for lifting heavy items and what precautions am I required to take?
22. If working late at night: What arrangements are there to ensure my personal safety when leaving the premises and going home?

23. What is my actual job description?

24. Do you have a sickness scheme

25. The BII have a course specifically for staff, to make them aware of their responsibilities in respect of the Licensing Laws, they provide a book which is an abridged version of the manual for the essential Licensing Qualification (NCPLH). The book costs about £5.00 from the BII it is well worth buying one and keeping it available for the staff to refer to on any issue, also get every member of the staff to read it and sign a statement saying that they understand it, it comes under due diligence. It will not remove your responsility, but it ensures that your staff have been made aware of their responsibilities and go in your favour should an error occur.

Using Credit, Cash Flow and Manipulating your Debt, Tips

Using Credit, Cash Flow and Manipulating your Debt, Tips

It’s worth noting credit and its availability is often crucial to the success of most businesses, what any successful business uses credit for is to buy assets and expand. When used properly credit can be a great tool to grow a business, such as building extensions, upgrading kitchens, bring letting rooms into use, pay for training courses or even help pay for extra staff during busy periods. However almost all assets cost money to manage and a business should always factor the cost of asset management before borrowing. Should you borrow too little you will find yourself falling back on credit to cover these costs.

Unfortunately in the majority of cases credit is being used not to buy assets but to pay for everyday bills and goods, whilst this kind of approach can see you through a sticky patch it often comes at a very high cost. Typically credit cards or overdrafts once “maxed out” people will find themselves simply paying the minimums, these debts are then usually consolidated into a loan (by a lender), with the cards / overdraft now clear again unless you have the discipline to chop them up they get used again very quickly. Once debt reaches a significant level the repayments to creditors are too big to be serviced, effectively you’re paying interest on top of interest along with any penalties for late payments, going over your limit and bounced direct debits etc it starts snowballing often coming to a stop only with insolvency action. However there are some simple tips to stopping things getting worse.

Open a separate bank account, one which is not linked to any debt or borrowing you may have, this is vital.
Don’t bury your head the situation is unlikely to get better on its own, open all letters read them and keep them.
Plan carefully before being tempted to borrow money to pay off debts, often it can be a case of out of the frying pan and into the fire, you will need a solid plan worked out in advance to know if its really viable, only in a very few cases would borrowing be advisable.
Check if you have any insurance policies which could claim on, also check to see if you can apply to any benevolent or trust funds for financial help such as www.licensedtradecharity.org.uk
Maximise your income, check entitlements to benefits and tax credits
Make a budget and stick to it, this is an effective brake to avoid overspending.
Make sure you know who your priority creditors are, this is not always obvious as the important ones don’t shout that much, it’s usually the non-priority ones who are most vocal.
Do not deal with debt on the phone, get everything in writing, contact creditors in writing too, phone conversations are often denied or forgotten about at a later date, keep copies of any letters you send.
Get saving! The key is avoiding debt in the future and for getting out of debt now is savings. Almost everyone we have advised in debt has the same underlying problem, they have no savings. It really doesn’t matter what you earn as we have advised clients on £50 pw and even those on £100,000 pa, if you can’t save any of what you earn you are leaving things in the hands of fate. Without a doubt something somewhere will go wrong, break or pop up unexpectedly in the near future. If you don’t have your own money to fall back on you will borrow someone else’s, bear in mind there is nothing cheaper than borrowing from yourself!

Can’t manage, don’t know where to turn? Twinpier is a specialist at helping people in the licensed trade, if you require confidential advice on a debt or credit problem contact Chris Wright on 01273 401069 or 07502214457 admin@twinpier.co.uk Licensed by the consumer credit act 597380

Pub Co’s attitude to all the recent reports

IMG_1748Has the BEC Report, the OFT, BBPA and RICS made any difference to the treatment of lessees/tenants at this moment of time.

I meet licensees every week that I have never seen before, the leased and tied ones with a few exceptions in the thinking Pub owning companies, say that absolutely nothing has changed and possible the situation is worse.

The main offenders are desperately trying to push through rent increases of around 20% on fictitious FMT’s before the RICS and any other changes come into the industry.

They know that any change to a lease made now will be binding until the next rent review  when any RICS Guidance will come into effect.

It was a point that I raised to the RICS on any change and the legal opinion was that any changes could only come into effect at a review time.

I had a lengthy discussion with a lady lessee yesterday, her Pub Co are trying to force her into an 18.5% increase and they will not move, regardless of the fact that they are offering leases on closed pubs for £5K.

Her business is static in terms of growth being a community pub and the turnover has been reduced following the smoking enforcement and the recession from some years ago.

The major Pub Co’s will not sign a deed of variation on any rent reductions, which effectively means that should they sell the pub, the old rent comes back into force with a very good chance of killing the sale.

The whole trading operation of all the major Pub Co’s is short term which is wholly detrimental to the industry.

The training is totally inadequate, a one or five day course does not produce a long term licensee, we have far too many desperate people, many totally unsuitable for the industry, inadequately trained and their only criteria was the ability to raise enough cash to effect a supposed low cost entry into the business, which everyone knows is totally incorrect.

I hope Peter Luff can expose the sham that really exists when he meets the Government.

October Recipe from The Jack in The Green

Mackerel. What could be better! It’s plentiful,cheap, local, fabulous to eat and good for you. Perfect for that midweek lunch (surely our most neglected of meals) it’s got to be better than a plastic wrapped sandwich and a packet of crisps. At their best towards the end of summer and into autumn, mackerel is a fish that takes to barbequing, poaching, baking and grilling and eats wonderfully well with nothing more than a squeeze of lemon.

RICS to make pub rent changes

 

RICS to make pub rent changes

David Rusholme and his team have taken remarkable steps to improve the anomalies in the Industry and if this progress can be continued, it will be appreciated by thousands of people involved in the Licensed Industry.

The tied tenant should be financially no worse off than the free of tie tenant — that is the key finding of the Royal Institute of Chartered Sureyors (RICS).

The RICS forum to look at the fairness of rent setting endorsed the key principle of the 2004 Trade and Industry Select Committee report — one that anti-pubco campaigners claim has been ignored.

The RICS report also said that it had never endorsed a 50/50 split of profits and that the recent Brooker case had provided “timely guidance”. In the Brooker case, the rent was set at 35% of the divisible balance (High Court gives hope for rent cuts).

It has vowed to undertake a review of its valuation paper, which provides guidance for rent setting. “This follows the principle of the tied tenant being no worse off than the non tied tenant; a position which is arrived at with a correct interpretation of RICS guidance,” it said.

The review will focus on:

• What comparable evidence can be used.

• The concept of “the reasonably efficient operator” making a clear distinction between what a tenant can afford and value.

• Advice on whether key data such as industry average statistics, for example on turnover, can provide a check and balance to the profits method.

It said: “RICS does not, and has never has endorsed any particular split of divisible balance; RICS guidance seeks to address the factors to be taken into account to assess an appropriate division of profit and reflection of risk.

“The Forum suggests that the recent Brooker v Unique Pub Properties Ltd. case has provided timely guidance on this point.”

Perception of bias

RICS also said it would look at the make up of its Trade Related Valuation Group, which sets the guidance on rent setting, as “representations to the Forum showed that there was a perception amongst some interested parties that this Group has a bias towards pubco landlord interests”.

RICS will draw up a new code of practice, which it hopes the while industry will adhere to at rent review and lease renewal time.

It calls for:

• The method of how rent is to be calculated is to be drawn up at the start of the lease using the profits valuation method. It will state which items are to be rentalised and excluded. It will also deal with tenants’ improvements.

• A list of minimum information presented by the landlord at rent review time.

RICS found, however, that there should be no national rent register for pubs because it is not a “realistic” or “achievable” goal.

But RICS does suggest establishing a database of key financial variables to estimate Fair Maintainable Trade and the divisible balance.

“This database will only be successful if both landlords and tenants are prepared to cooperate fully and submit sufficient accurate data, so that a critical mass of data can be achieved,” it said.

“RICS and the Forum believes that benchmarking by the industry will give greater knowledge and improve the transparency in the calculation of rental value at review.

“Data would be available to benchmark and substantiate the components of the FMT calculation. It will help define more readily the concept of “a reasonably efficient operator”.

“It would also provide a basis to demonstrate the rental difference between tied and non-tied tenants and allow for an evidence-based approach to the appropriate split of the divisible balance.”

Fair Pint reaction

“Our campaign has been instrumental, along with the ALMR and others, in lobbying the RICS to respond pro-actively to the findings of the Business & Enterprise Select Committee,” said Fair Pint founding member Karl Harrison.

“We’re pleased that RICS has put in so much effort to look at the issues.

“It now appears that the RICS, and a leading property lawyer, agree with the Fair Pint Campaign that a rent review should leave the tied tenant no worse off financially than the non-tied tenant.

“This is the prime principle. It’s so important to pub tenants to see that the RICS does not endorse the 50/50 split of the divisible balance, as so often claimed by landlords to be the norm.

“It’s very important also that the RICS has attached weight to the ‘Brooker Case’.

“This judgement makes it clear that the tenant’s rent bid will be effected by all of the risks facing the tenant, and that the landlord’s share of profit ought not to exceed 35% at this time.”

The newly formed Independent Pub Confederation (IPC) fully supports the findings.

Taken from the Morning Advertiser

Removal of the tie and the possible rent increases.

Barrel-dregs 3

Removal of the tie and the possible rent increases.

I am not a lawyer and I am sure that a lawyer will pull my argument to shreds, but I fail to understand the so called divisible split on profits and the so called rent calculation.

Ignoring my previous article about key staff wages being a justifiable expense.

If the divisible split for rental calculations is taken on the perceived profit from the goods purchased from the landlord or through his auspices and any others, against the hypothetical costs of the pub . The rent is supposedly set at 50/50 or in the Brooker case somewhat different set of figures.

There is absolutely no inclusion of the landlords discount as a supplier or whatever, in fact it could be argued that the Pub Co’s are out of the generosity of their boardrooms taking no discount whatsoever, certainly there are no figures confirming as to whether they get any discount at all, only speculation.

I would like to give them the benefit of the doubt, that they only take a nominal handling charge.

It would therefore seem obvious that if the tie was removed with the exception of small brewers with limited estates, the discounts would go up to all and the retail prices would fall because of local competition and pricing.

The additional profitabilty would be unlikely to reach 10%,  it probably would be around 5% across the country at the outside.

The rental calculations would continue in the same way with a very slight increase in profitability where the landlord would get his share in the disible split.

But since the landlords assumed discount has always been so low that they considered it not necessary to factor it into the divisible profit, I would argue that rents should logically stay the samer or marginally higher to allow for the discount, say 2.5%.

It sounds like the stories that have been given to me on buying a business on many occasions, you have the turnover and the vendor says that he puts £50K in his back pocket that makes the business worth far more, my answer has always been that I’m not buying his back pocket, I was aiming to buy the business on audited figures not fiction.

If the Pub Co’s are not prepared to factor in their profit from discounts into the divisible split, they cannot expect to have rent increases to accommodate a hypothetical discount which has never been disclosed.

I am a totally supportive of the regional and family brewers with pubs and small well run Pub Co’s.

But these thoughts do raise a spectre that may have evolved over the years with these smaller tied estates.

The valuation system stems from the old Brewer Tenant Agreements when discounts were negligable and the difference between a tenant and a freehouse’s purchasing prices were little cause for concern.

However with the pressures by certain companies for excessive discounts and the small brewers being obliged to comply with the discounts demanded, yet leaving their own estates on minimal or nil discount and to a certain degree, uncompetitive price wise, it would seem logical that a more pragmatic approach to discounts for their estates. They do after all want the best operators and like all good operators they need incentivizing, we are losing too many good operators out of the industry through total disillusionment or enforced financial hardship by companies with short term views.

Those are my thoughts as always and are not cast in stone.

Barfly

Specialist Licensed Property Insurance

Submitted by Terry Osborne of Osborne Insurance Services Ltd

Insurance is one thing that most people forget, but it can be the one
thing that keeps you in business following a claim

* No one loves insurance until a claim arises

* Sums Insured – These should represent the full replacement costs –
Buildings Insurance should include a sum for demolition, architects fees and
full re-build costs, under insurance will cause
concern as policies are subject to the “Average Clause”, ie if you insure
for £250,000 and in fact you should have insured for £500,000 and you have a
small or large claim, only 50% of the
total amount of the claim will be paid as you were only insuring 50% of the
sum insured

* Ensure that you read your documents, including any clauses, exclusions and
warranties, as if some are not adhered to your policy could be invalid

* Package Policies are the best way to ensure that you have all the cover
your require, however a Taylor Made package is always best and ensures that
you are not over or under insuring as the
policy is made for you.
* Ensure that all facts are disclosed, ie previous claims, financial
problems, ie CCJ’s or bankruptcy. Quotations can still be given, however
non-disclosure could invalidate the policy

* Picking your insurer can be a tough decision, do you pick the cheapest or
go in the middle? Provided you have checked the sums insured, cover
provided, warranties, endorsements and
exclusions the price should not have a bearing on the cover

* Picking a Broker rather than a Direct Insurer should give you added piece
of mind as the Offices are generally smaller, ensuring that you are dealt
with as an individual rather than just a number

* Your Employers Liability Insurance Certificate should be displayed at all
times is a prominent position

Just a few key points for consideration. Should you require anything further
from us or wish to discuss any points please do not hesitate to contact us.

terry_osborne

Rent Appeals Question Marks on the 50/50 split of profits? (Barrel Dregs)

Barrel-dregs 2

Rent Appeals Question Marks on the 50/50 split of profits?

An interesting point was bounced off me this morning on this so called 50/50 division of profits on rent assessment.

For some extraordinary reason a lessee and his wife or partner are not allowed to include their basic drawings in the running costs of the business and are therefore not considered an integral part of the divisible profit..

The immediate answer to that is that the amount they draw could wipe out the whole of the perceived divisble profit.

Now supposing that the up to date running costs are brought into the equation, rather than wild speculation and over guesstimation so that the figures are accurate, all the wages etc are all correct and acceptable and an accurate figure is then used to work out the divisible profit.

What if that particular pub is run wholly under management and the lessee draws nothing until the divisible profit is declared, are the valuers going to remove the manager and his wife’s salary from the costs, to raise the level of divisible profit, I think not.

An acceptable figure should be allowed for the lessee and standardized across the industry as a proportion of the turnover and put in the costs, There is absolutely no way that any wife or partners realistic earnings should be discounted to raise the divisible profit to suit the landlord.

My wife has never been a partner in my business and her earnings have always been totally separate,  and if I had a lease would not be included in the divisible profit.

Why should the assumption be that a lessee and his wife effectively work for nothing, when a sole operator can justify the employment of staff and also a pub run under management can justify the whole wage bill.

I know the figures used in rental calculations are pure speculation and based on flawed Comparables, but the move is towards using authentic accounts to assess a businesses potential.

Let’s have some common sense and logical thinking about a fair figure to be allowed for a lessees basic earnings, and a wife or partners earnings should not come into the equation, assuming that they are realistic and will stand up to scrutiny depending on her position in the business.

If you have no wife or partner then additional staff have to be employed and are a legitimate cost.

Food for thought and discussion.

Brulines a serious comment by a customer. (Barrel Dregs)

 

Bad Beer For Export

Brulines a serious comment by a customer. (Barrel Dregs)

This was sent to me as a comment but I thought it needed some prime space and I would like to thank Mr Pye for his considerable effort, they are in the main my thoughts and observations from previous research, Brulines please take note, these are observations which I hope you might like to consider responding to and where possible rectify where appropriate.

My local pub is having the same problem with the Brulines monitors, after having a look I noticed a lot of faults in the way the system is run, I am amazed that Brulines are getting away with actually installing this system into pubs.

Here are a few things I noticed

1. My pub sometimes runs a line clean straight from the water container with line cleaner mixed , the problem here is that there is no way of telling the system this is not beer its line cleaner /water

2. Different pubs have different line distances thus meaning that every pub will have a different amount of wastage in the line, there is no system to measure this wastage

3. If the monitoring system is placed on a vertical line and you have an active line (lots of bubbles) did you know this actually is enough to turn the monitor wheel

4. As said above there isno way of telling what has been pulled through its like having an electricity meter with no reading

5. On the website it is on average 3 weeks behind so for 3 weeks after you have pumped the beer through, you have no idea how much has been recorded.

6. On the website it relies on staff entering the correct delivery figures any mistakes and the pub could get fined unless you have proof of what you bought ( in other words check what you ordered and check what they said you ordered)

7.The volume of each keg varies an 11g keg is never 11g spot on it may be over or under not including what may be left at the bottom that has not been picked up, over time this can mount up and cause issues. There can be a considerable shortfall in the quantities in each keg due to spillage etc when filling.

8. This is not slandering Brulines it is a theory, if say a certain company wants a tenant out there is no third party to stop Brulines figures from being manipulated  to make it look like they are buying out as far as I know, please correct me if I am wrong and I will apologise.

9. Brulines are not calibrated enough and no concrete proof is given on the fact that is it calibrated correctly

I could sit here all night and reel off things but I am not going to.

In my opinion the measuring device should be located as close to the tap as possible horizontal on a non return line there should also be some sort of sensor to determine the type of liquid in the line located as close to the barrel as possible (maybe in the float chamber) these 2 devices working together will be able to wipe out the need to assess how much liquid is in the length of beer line as soon as the line cleaner is pushed through, the liquid that is left in the line will be classed as line cleaner due to the sensor in the float chamber sensing that it is not beer but line cleaner .

Brulines or the companies using the system should be monitored by an independent approved company*the only problem there will be cost.

The website should be a live update to enable the user to determine an accurate reading and also control stock more efficiently if not, there should be a meter in the cellar showing the amount that has flowed through each line, although this will require many meters.

Calibrations should be done at a set period and the user shown the before and after any inaccuracies.

This is just my opinion I hope this may help and I also hope someone from brulines might take some advice from this.

A Pye

Atholl Brose Ice Cream

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Atholl Brose Ice Cream

 

Fron the Stag’s  Head, Swalcliffe, Nr Banbury, Oxon, 01295 780232

 

1 pint of single cream,

4 egg yolks,

4 oz of caster sugar,

1 vanilla pod,

4 measures of whisky,

1 oz of oatmeal,

2 fluid ozs of runny honey.

 

Gently heat cream until hot, whisk in the egg yolks, caster sugar add vanilla pod, stir constantly over a moderate heat until it becomes like a custard, but do not allow to boil, when chilled remove vanilla pod and whisk in the whiskey.

Place in an ice cream maker and when starting to thicken add the oatmeal and honey, continue to churn until frozen. Turn into a suitable container and place in freezer.

Serve with stem ginger or wafers.

 

Kitchen Tip:- The Stag’s Head grow their own herbs and often have a glut in the growing season, so they freeze any extras and use them out of season for casseroles, soups and home made bread.