I felt I had to write in. Reading your pages was like reading my life history. Many of the dreadful actions of Pub Cos you relate. I too have experienced. I have owned a freehouse so the trade was not new to me but I was a babe in arms when dealing with the leasehold negotiators for the Pub Co.
I had a meeting with the new Pub Co and treated the meeting as a two way interview and I found them quite legalistic and defensive in their responses, unlike any BDM I have met but just as unforthcoming about the realities off the business
So anything you say to help, in either scenario, would be much appreciated.
I have a 15 year lease, 8 years left on an 8 roomed inn with a beer and cider only tie.
I have known the place for over twenty years and for half of this it was was apparently successful as a restaurant and freehouse. A Pub Co then purchased it, spent nothing and ran it into the ground, at which point the present Pub Co bought it and 30 other properties. They ran it as a managed house for a year or so without success and put the lease up for sale with the promise of a major refurb.
I took on the new lease in 2002. The refurb was done and used to justify the higher rent. We upped the standard to get 4 AA stars and an AA food Rosette. We have struggled from time to time but the good balanced out the bad until Sept 2008 when there was a major dip in business following a really poor summer and I alerted the BDM to the problem; this time there was no good to see us through the bad. We arranged a meeting and went through the figures and forward bookings. His response was that for the Pub Co to help us we must accept their “value” business model; reduce our room prices to £50 to compete with Premier Inns and reduce our food prices substantially to get more people in. I was very doubtful but for the sake of their unspecified help I agreed. One week later I found out what “help” meant. I was informed that I was on stop for beer orders. This subsequently changed to cash before delivery plus rent weekly plus arrears (one months rent at that time). Terms that were impossible to meet. October was again poor, November worse and December the lowest room bookings we have had in 7 years. And throughout this and meetings with my accountant and solicitor the brewery has not moved one scintilla other than to issue a statutory demand and to fine me for buying out. The choice is pretty stark; pay up or get out and become bankrupt. Fortunately I can raise the funds required but I really want some movement from the Pub Co on the rent to justify more capital being put in.
At this point you may well think me mad. I am considering another leasehold property with a smaller Pub Company, free of tie. It is a closed property due to insolvency and I would hope to secure sensible terms. The business is similar to my present one, rooms being the core component, in a market that is better than the present area.
The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsiblity for them, we do try to avoid offensive or litigious statements being made.