Monthly Archives: April 2016

Why Banning Tips is good for Business

Harry Cragoe of The Gallivant on why banning tips is good for business

Harry Cragoe, owner of The Gallivant restaurant with rooms in Camber, pays all his staff a minimum of £9 per hour and has launched the #toohiptotip campaign to ban service charges in restaurants. He believes more hospitality businesses need to use a similar approach.

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Note:- We have always insisted to customers that the cost of the meal and drinks is what you pay, there is no Service Charge, the same as they do in the majority of restaurants in France.

Consequently, the staff were always amazed at the tips they actually got, I resent being told or I avoid eating anywhere, where there is a displayed Service Charge, sadly, it goes in too many cases into a taxable black hole and not the staff.

A nasty Scam with Credit Card Machines, Barrel-Dregs

BD Scams.eps

A nasty Scam with Credit Card Machines, Barrel-Dregs

One of our Members had been with a Credit Card Company for just over two years, at the time they claimed to have the best deal and certainly appeared so.

Barclays came in offering a better deal and he agreed to switch, his current company wanted £200 for breaking his contract.

The savings would be well in excess of the £200 exit fee and he went ahead.

An American based leasing company came on to him, saying that he was breaking his contract, they supply the Credit Card Machines on lease and want £300 or will take him to court.

He and his staff had never heard of them, it appears that the card company have some sort of leasing deal with this company, he is hunting through the copious agreement and so far has found nothing connecting with this company, even in the very small print.

He paid the £300, having no desire to be dragged through the courts for a relatively small sum.

I phoned the Card Company and asked about leasing credit card machines and using their services.

They told me that they had an eighteen month contract for machines and their services.

The big question, like the Energy Companies, if you don’t negotiate a new contract before your current one expires, do they automatically put you on a new contract with themselves and this dubious leasing company.

Having looked on the Internet, the name of the card machine leasing company appears to have changed several times, their head office is in San Diego and would appear to have a subsidiary business in the UK, but there are many tales of woe.

Sadly, we cannot use names at this moment of time, but check your agreements, especially anything on Card Machine leasing suppliers and then go to Card Leasing Machine complaints on the Internet.

We will keep you posted.

Potboy West

Please view our other web site for Information, Help and Advice www.buyingapub.com

The views expressed are not necessarily the editors and www.usenumberone.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made. They are written by concerned professionals in the industry who feel that these issues should be raised to ensure that all licensees, customers and older people are made fully aware of the many hidden pitfalls, set up by the unscrupulous individuals and companies.

Government agrees to meet BBPA over ‘unworkable’ Pubs Code

Government agrees to meet BBPA over ‘unworkable’ Pubs Code (Propel Info)

The government has stated it will meet over the soon-to-be-implemented Pubs Code with the British Beer and Pub Association (BBPA), which has attacked key sections of the code as “unworkable”. The Department for Business Innovation and Skills (BIS) said it would meet the BBPA after the industry body slammed the new statutory code last week for not providing sufficient transition period, as well as issues with dry-rent and claims the code could hold back entrepreneurs seeking to enter the pub industry. A BIS spokesperson told City AM: “The Pubs Code seeks to ensure that the 12,000 tied-tenants in England and Wales can operate in an environment that is fair and allows them to thrive. Tenants will be provided with the protections of the code as of the statutory deadline of 26 May. We will meet with the BBPA shortly to discuss their concerns.” The Pubs Code will regulate the relationship between tied pub tenants and the large pub-owning operators that rent the pubs to them and sell tied products. It will apply to all operators owning 500 or more tied pubs in England and Wales. It will be implemented through the newly created role of a Pubs Code Adjudicator. On Friday, BBPA chief executive Brigid Simmonds branded key aspects of the Pubs Code as “unworkable”, such as the proposal that the “waiver for investment can only be entered into where the investment is at least 200% of dry rent (eg £50,000 rent and £100,000 investment) and for a maximum of seven years”. She said: “This puts at huge risk much of the £200m capital invested each year by pub companies in their tied pubs and will ultimately lead to further closures.”

Comment

“Surprise, Surprise”, the BBPA have decided the Pubs Code is unworkable or are they opposing fairness and equality in the Industry for the majority, rather than the minority who have controlled the Industry for too long, because there has been no real legislation, which had for years self regulated perfectly satisfactorily until the Pub Co’s appeared.

MRO in simple terms, Interim News from Morgan & Clarke

Morgan Clarke Logos copy

MRO in simple terms, Interim News from Morgan & Clarke

The Code

We should cautiously welcome the Government amendments to the Code which seek to eliminate some (not all) of the potential loopholes. The details have yet to be absorbed, but if the Minister is to be believed, there are some positive steps.

The Good

Despite pub-owning companies seeking a transitional period after Code implementation, where, in theory, they still could avoid offering Market Rent Only [“MRO”] option to tied tenants for six months, Government held fast and it remains proposed that all reviews and renewals after the implementation date (expected to be 26th May 2016), will be eligible for MRO option. READ ON

MRO stands for Market Rent Only, not Make Rents Outrageously (expensive)! “Barrel-dregs”

  • BD less Savoury 2.eps

MRO stands for Market Rent Only, not Make Rents Outrageously (expensive)! “Barrel-dregs”

A classic tale of one of the major villains of the industry, sadly no names but a warning to the unsuspecting who may still believe their Landlord is a caring, sharing partner in business reputable organization.

Somewhere in the North East there is a boozer, that is still a boozer and not a tarted up modernistic sound box, trying to provide tasteless towers of decorative food that a good working man would never consider a meal sufficient to get him through another heavy day. READ ON

New Code of Practice for tied tenants will begin next month:

 

BIS

MROAS

New Code of Practice for tied tenants will begin next month:

Download the pubs code regulation and fees information below.

Pubs Code Regulation 2016

Pubs Code Fees 2016

Impact Assessment

If you need help interpreting the code please email or call the office here .

The government will introduce a new Code of Practice for tied tenants of pub companies with more than 500 pubs that takes effect next month.

The provisions of the Code of Practice have been unveiled after a consultation process.

In a briefing note sent to members last night, Association of Licensed Multiple Retailers chief executive Kate Nicholls said: “The new Code will be introduced on 26 May 2016 and will be effective immediately – any rent review which takes place from 27 May 2016 will be governed by the new provisions and will give tenants the right to have detailed tied rent assessments, request a Market Rent Only (MRO) alternative and take a case to the Adjudicator for any behaviour or rent event after that date.

The government has also confirmed that all the code provisions, aside from MRO will carry over should be a tied pub be sold to a landlord not covered by the statutory code until the lease ends of the first rent review, whichever is sooner.

Tied tenants will have a right to request an alternative MRO free-of-tie rent assessment at rent review, renewal (contracted in agreements only) or if there is a significant increase in price or substantial change in circumstances.

The original proposal that an MRO option would only be available at rent review where the rent increases has been abandoned, tenants will have a right to request an MRO assessment irrespective of whether the rent increases, decreases or stays the same.

An MRO request can also be triggered outside the rent review process where there is a significant increase in price. This is assessed by reference to the relevant ONS Price Index and for beer, it must be more than 3% above the index, for other alcoholic drinks it is 6% above (both are inclusive of duty) and for other tied products and services, a price increase of more than 20% above the relevant ONS Price Index.

The price comparison period is over 12 months on a like-for-like cost basis and referring to prices actually paid by the tenant. MRO may also be triggered if there is an event which has a significant impact on trade.

The requirement for this to be an event which only affects that particular pub has been removed, but the change has to be one of long term change to local economic, environmental or employment factors or as a direct consequence of changes in the tie imposed by a pub owning business (such as) removal or a particular tied product.

The tenant will have to provide a written analysis of the forecast impact on trade for the next 12 months.” Introducing the Code, Minister for Small Business Anna Soubry said: “I have had to take some tough decisions, and I am certain that parties on different sides of the debate will find they disagree with some of the conclusions.

However, it is my job to strike a balance which ensures that tied tenants of the largest pub-owning businesses are no worse off than free-of-tie tenants, that there is fair and lawful dealing between pub-owning businesses and their tied tenants and that all this takes place without placing undue burdens on businesses.”

Government to introduce a market rent only (MRO) review option for tied tenants

Propel

The government is to introduce a market rent only (MRO) review option for tied tenants that can be triggered by “a significant impact on trade” alongside other key events such as lease renewal.

Clarifying what it meant by a “significant impact on trade”, the government said: “This will arise where written analysis of the level of trading forecast for 12 months or more is sent to the pub owning business by the tenant which demonstrates that a trigger event has occurred.

We have clarified that the effect of the trigger event is to decrease the level of trade that can reasonably be expected to be achieved at the tie pub in each month over a continuous 12 month period.

We have agreed with the respondents who said that the requirement for tenants to mitigate potential trigger events is too strict and could frustrate their entitlement to an MRO offer.

Therefore we have replaced this with a duty to mitigate substantially. We also wish to clarify here that extrinsic price increases – whether national or local – cannot be trigger events.” The government intentions have been published after a consultation on the introduction of a pubs code and pubs code adjudicator.

The government stated today it would introduce a Pubs Code to “ensure 12,000 tied tenants of the six largest pub-owning companies can secure a fair deal and a better livelihood”.

The code provides: the right to consider a tied rent in parallel to a MRO offer’; protections in the event of a sale of a pub to a non-code company; an exemption for pub franchise agreements from MRO and the regulations for setting and negotiating of rent; but also a deferral of the MRO option of up to seven years in return for significant investment by the pub-owning business.

Minister for small business Anna Soubry stated: “Pubs are an important part of life in this country. They are the hub of local communities in both rural and urban areas. Beer and pubs contribute £22bn to UK GDP.

It is crucial that pubs operate in a fair environment which allows them to thrive.

Over the last decade, tied pub tenants have raised concerns that the sector has become increasingly difficult to operate in.

The key issue for them has been the relationship with large pub-owning businesses.

Some positive changes resulted from the introduction of industry self-regulation, but the measures did not go far enough.

So the previous government consulted on proposals for a statutory Pubs Code and an independent adjudicator and enshrined these in the Small Business, Enterprise and Employment Act 2015.

Our most recent consultation process gathered views on how to implement the Pubs Code and Pubs Code adjudicator, and on the draft regulations. I have had to take some tough decisions, and I am certain that parties on different sides of the debate will find they disagree with some of the conclusions.

However, it is my job to strike a balance which ensures that tied tenants of the largest pub-owning businesses are no worse off than free-of-tie tenants, that there is fair and lawful dealing between pub-owning businesses and their tied tenants and that all this takes place without placing undue burdens on businesses.

I hope all parties will agree that, on balance, this package of measures works to the benefit of our pubs sector and represents a fair outcome for all.

I ask everyone in the pub business to get behind the Pubs Code, and work with the Pubs Code Adjudicator, so we can ensure that this country’s pubs continue to thrive.”

The reports states: “The government has decided to make a number of changes and improvements as a consequence of the consultation.

The principal ones are: to remove the proposed restriction that the MRO option should become available only when an increased rent was proposed but to allow it regardless of the level of rent proposed;

Deliver the effect of a Parallel Rent Assessment to enable tied tenants to consider a free-of-tie rent offer alongside a tied rent review proposal;

Refine and improve the basis on which a ‘significant price increase’ would be calculated for the purpose of triggering an MRO option;

To change the basis on which a ‘significant price increase’ would be calculated for the purpose of triggering an MRO option;

To cut back the weight of information requirements on pub-owning businesses in ways that would still offer similar protections to tied pub tenants;

To clarify that pub-owning businesses would be permitted to carry out routine checks – though not to negotiate terms – before providing stipulated information to prospective tenants;

Conditions for allowing an exception to the right to an MRO option in exchange for a significant investment in the tied pub through an agreement between the pub-owning business and tied tenant – including the minimum size of such an investment and the maximum period for the exception; the maximum length of short agreement which should be exempted from most Pubs Code provisions (12 months); and which provisions should still apply to these short agreements;

The definition of those tied pub franchises which would be exempt from some parts of the code; to make some code provisions non-arbitrable: relating to the role and duties of compliance officers and the training of business development managers;

Issues about the level of fees and charges and also the financial penalty following an investigation by the Pubs Code Adjudicator.”

The government is to introduce a market rent only (MRO) review option for tied tenants

Propel

The government is to introduce a market rent only (MRO) review option for tied tenants that can be triggered by “a significant impact on trade” alongside other key events such as lease renewal.

Clarifying what it meant by a “significant impact on trade”, the government said: “This will arise where written analysis of the level of trading forecast for 12 months or more is sent to the pub owning business by the tenant which demonstrates that a trigger event has occurred.

We have clarified that the effect of the trigger event is to decrease the level of trade that can reasonably be expected to be achieved at the tie pub in each month over a continuous 12 month period.

We have agreed with the respondents who said that the requirement for tenants to mitigate potential trigger events is too strict and could frustrate their entitlement to an MRO offer.

Therefore we have replaced this with a duty to mitigate substantially. We also wish to clarify here that extrinsic price increases – whether national or local – cannot be trigger events.” The government intentions have been published after a consultation on the introduction of a pubs code and pubs code adjudicator.

The government stated today it would introduce a Pubs Code to “ensure 12,000 tied tenants of the six largest pub-owning companies can secure a fair deal and a better livelihood”.

The code provides: the right to consider a tied rent in parallel to a MRO offer’; protections in the event of a sale of a pub to a non-code company; an exemption for pub franchise agreements from MRO and the regulations for setting and negotiating of rent; but also a deferral of the MRO option of up to seven years in return for significant investment by the pub-owning business.

Minister for small business Anna Soubry stated: “Pubs are an important part of life in this country. They are the hub of local communities in both rural and urban areas. Beer and pubs contribute £22bn to UK GDP.

It is crucial that pubs operate in a fair environment which allows them to thrive.

Over the last decade, tied pub tenants have raised concerns that the sector has become increasingly difficult to operate in.

The key issue for them has been the relationship with large pub-owning businesses.

Some positive changes resulted from the introduction of industry self-regulation, but the measures did not go far enough.

So the previous government consulted on proposals for a statutory Pubs Code and an independent adjudicator and enshrined these in the Small Business, Enterprise and Employment Act 2015.

Our most recent consultation process gathered views on how to implement the Pubs Code and Pubs Code adjudicator, and on the draft regulations. I have had to take some tough decisions, and I am certain that parties on different sides of the debate will find they disagree with some of the conclusions.

However, it is my job to strike a balance which ensures that tied tenants of the largest pub-owning businesses are no worse off than free-of-tie tenants, that there is fair and lawful dealing between pub-owning businesses and their tied tenants and that all this takes place without placing undue burdens on businesses.

I hope all parties will agree that, on balance, this package of measures works to the benefit of our pubs sector and represents a fair outcome for all.

I ask everyone in the pub business to get behind the Pubs Code, and work with the Pubs Code Adjudicator, so we can ensure that this country’s pubs continue to thrive.”

The reports states: “The government has decided to make a number of changes and improvements as a consequence of the consultation.

The principal ones are: to remove the proposed restriction that the MRO option should become available only when an increased rent was proposed but to allow it regardless of the level of rent proposed;

Deliver the effect of a Parallel Rent Assessment to enable tied tenants to consider a free-of-tie rent offer alongside a tied rent review proposal;

Refine and improve the basis on which a ‘significant price increase’ would be calculated for the purpose of triggering an MRO option;

To change the basis on which a ‘significant price increase’ would be calculated for the purpose of triggering an MRO option;

To cut back the weight of information requirements on pub-owning businesses in ways that would still offer similar protections to tied pub tenants;

To clarify that pub-owning businesses would be permitted to carry out routine checks – though not to negotiate terms – before providing stipulated information to prospective tenants;

Conditions for allowing an exception to the right to an MRO option in exchange for a significant investment in the tied pub through an agreement between the pub-owning business and tied tenant – including the minimum size of such an investment and the maximum period for the exception; the maximum length of short agreement which should be exempted from most Pubs Code provisions (12 months); and which provisions should still apply to these short agreements;

The definition of those tied pub franchises which would be exempt from some parts of the code; to make some code provisions non-arbitrable: relating to the role and duties of compliance officers and the training of business development managers;

Issues about the level of fees and charges and also the financial penalty following an investigation by the Pubs Code Adjudicator.”

Latest News from MROAS, the pubs code is around 2 weeks away now!

MROAS

Latest News from MROAS, the pubs code is around 2 weeks away now!

Everyone

Word reaches us that the publication of the pubs code is around 2 weeks away now! – we shall shortly be informing you all of the tenants meeting we have planned to coincide with that announcement. Looking at the calendar i imaging the most likely date to hold the meeting is going to be the 10th May in London as the previous weekend is the bank holiday and it will be too much for most members to make a meeting around that particular holiday.

Other news – urgent action required from members regarding the Westminster Hall debate on this coming Thursday 14 April 2016
So could PAS members please contact your MP’s office ASAP and ask them to attend Greg Mulholland’s backbench debate on Thursday in Westminster Hall 1.30pm. Feel free to use my text below as a template, get them supporting you and your pub, time is tight so CALL your MP office first tell them its urgent as its this Thursday coming and then send them the following details via email, if you don’t call first the email you send will be buried in a sea of emails, most MP’s have @ 300 emails per week !….Template below use and adapt.

MROAS Team

Dear MP
I would like you to attend the backbench debate on Thursday 1.30 pm – 4.30 pm in the Westminster Hall, it’s a debate on Pubs code and the adjudicator – proposed by Greg Mulholland MP
It concerns the appointment of a pubs code adjudicator that all sides of the pubs trade can accept and as was outlined previously by the will of the house. Currently the BIS dept have said Mr Paul Newby (director and RICS surveyor at Fleurets) will be the adjudicator and I want you to know that this is appointment not acceptable to all sides, myself included.
I appreciate Thursday is an awkward day for some MP’s and you maybe unable to attend in person, therefore would you be so kind as to write a letter of support to Greg Mulholland office if you can’t make it?
I would urge you to consider the problem I and a great number of publicans have with Government appointment of a RICS surveyor to the role of adjudicator, and consider fully the standard recruitment practices of the major Pub Companies, they are designed to focus on the “opportunity” and to gloss over the “due diligence” that is required in taking on such a commitment. The reason the Pubs Advisory Service was set up in the first place was to help with due diligence, not that the Pub Companies send any prospective tenants to them for help at this stage of the process – you’ll have to wonder why.

So the reality is when a tenant eventually gets round to engaging with a Royal Institute Chartered Surveyor (like the governments appointment RICS surveyor Mr Paul Newby) it will often be in circumstances where there is a problematical rent review or other “event” and the engagement will be expensive, humiliating and generally unsatisfactory. The “trade talk” advice that is often mentioned coming from this situation (note which I’ve also heard from some MP’s) is “you signed, now suffer” the subtext being that the tenant should have sought advice before becoming committed to a patently unfair and unbalanced contract. As pointed out above Pub Companies are not sending tenants to the Pubs Advisory Service for independent advice so it isn’t happening.
The corollary to the “You signed, now suffer” mantra is that presumably there is a large number of potential tenants who did not sign, as the advice from the professionals who they happened to contact was not to do so. So any “professional” who has been practicing and making a living in this sector such as Mr Newby has to be regarded with a certain level of suspicion of having in some way contributed to the problem and have some motivation to mitigate criticism of past practices. From the prospective tenant’s perspective it is often not seen this way, as running a Pub has a number of attractive aspects and to many it is the opportunity of a job and a home in return for hard work that is their motivation. Renting a pub is seen, by the unwary and untrained, as a small step beyond renting a flat and there is an underlying, unspoken, assumption that the regulatory environment is similar, but it is not, and it is in the yawning gap between the protections afforded to private tenants and those afforded to commercial tenancies which are a constant trap for the unwary.
In our specific industry the rules around Tied rent setting are governed by a guideline issues by RICS against which great store is set by “industry figures” and politicians alike. The application of this guideline is deeply distrusted by Tenants not least because it is non-mandatory as is pointed out in RICS’ own submission to the SBEE Committee:
“It is important to note that members are not required to follow the advice and recommendations in the guidance note i.e. it is not considered mandatory from an RICS perspective”
So we have a situation where we have a professional who is a member of an “Institute” which is “Royal” and “Chartered” and where much of the membership are highly respected. However, in the “Licensed Trade” specialism there is a corner of the industry where the power and influence of a very small number of companies with senior management who are themselves members of the RICS and who sit on the powerful committees that issue “non-mandatory” guidance but whose activities are not regulated by RICS.

If you have any difficulty with issue of pubs or feel unable to support the reform of pubs trade and with it a strong code and adjudicator because of something you have been told by others please get in touch so we can discuss or debate them.

I look forward to hearing your position on this issue by return and the confirmation on your attendance at the debate this Thursday

Regards

(Constituent)

JG&Partners, April 2016 Licensing News

JG & Partners

Welcome to JG&Partners,  April 2016 Licensing News

Today effectively sees the end of our 20th anniversary year, a year which we have celebrated in part with a variety of charitable endeavours across the whole of the office and in fund raising for our chosen charities in ways small and not so small. As one of the final activities, partner Kate Redford completed the 14 mile Royal Marsden March. In total we have raised a substantial amount over the year for our chosen local charities (The Children’s Hospital Charity, Roundabout Homeless Charity and Amy’s Retreat).

On to the news as recently posted to our website.

Scotland – West Lothian Board Festive Policy for 2016/17 – Consultation

Posted: 19 Apr 2016 10:00 AM PDT

The West Lothian Board has launched a consultation regarding its festive policy for 2016/17, in which the Board proposes to make a general extension of licensed hours for on sales premises in West Lothian on specific festive dates.  The wording of the Board’s proposed policy for the festive period 2016/17 and an online questionnaire regarding it can be accessed through the following…

Gaming – Local Risk Assessments

Posted: 19 Apr 2016 08:00 AM PDT

Following on from our article of 9th February, regarding the introduction of Local Risk Assessments for Gambling Operators. Updates to the social responsibility code which came into force on 6th April require Licensees to assess the local risks to the licensing objectives posed by the provision of gambling facilities at each of their premises, and have policies, procedures and control measures…

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