People: Getting things out in the open

The Pub Partnership Programme survey aims to identify what really matters to lessees and tenants. Phil Mellows analyses the results.​

The survey results here are merely the first stage of the Pub Partnership Programme being developed by London firm Corporate Responsibility Consulting (CRC). In 2004 CRC will be contacting many more licensees and go on to more focused research which aims to identify key difficulties in the relationship between pubco and publican and search for solutions.

In this initial survey, respondents representing a cross-section of pub tenants and managers were asked to assess the relative importance of the various factors in their relationship and not to judge the performance of their company.

CRC was encouraged by the consistency of the results. "One surprise was that about 80 per cent of tenants said they would be renewing their contracts which also proves it wasn't taken as an opportunity for a moan," as the company's Michelle Baker put it.

This survey will be used in the new year to set benchmarks for the satisfaction of licensees against which different companies can measure their performance in dealing with tenants and managers and identify their strengths and weaknesses.

"This should reduce their costs by refocusing resources only where they are needed and also by improving services, systems or behaviours which may, unwittingly or not, have been causing tenants and managers to leave," explained Michelle.

"Licensees will be able to rate how their company performs against a list of issues which, as the data from our initial survey proves, are important to them.

"The aim so far, therefore, has been not to survey the entire pub industry but to ensure we ask the correct questions when the programme begins in January.

"We do not want to 'name and shame' but to help companies identify where and how to improve," said Michelle. "In this way the industry can improve its reputation and attract better licensees."

CRC will also be offering more in-depth investigations for companies which identify problems which they would like to probe further.

Called the "Licensee Loop" this will involve face-to-face interviews with licensees and pubco HQ representatives to find solutions to problems.

January's research will cover three areas:​

• Leavers and switchers: Free to all companies this will identify areas of similarity and difference between pub estates in the reasons given by licensees for leaving their landlord or company. No participating company will be identified but top-line data will be regularly released.​​
  Future licensees: This will identify where new licensees come from, why they decided to join the industry and what companies can do better to attract the best. Only companies involved in benchmarking present licensees will be given detailed analysis of this data.​​Present licensees: Tenants and managers will be surveyed on their companies' performance. Companies will pay to be benchmarked against other comparable companies as well as an industry average. Top-line data will be released but no company will be identified unless they wish to be. ​​​​​​

Safe and secure​

However well they might get on with pubco representatives as human beings, the binding legal relationship of the contract is the most important element for licensees.

This includes the nitty-gritty of the tenancy agreement - how much rent they will pay, the protocols of rent reviews and disputes procedures, plus the support that licensees can expect in return for their money.

Top of the list, however, comes security, formally expressed by whether they are protected under the Landlord & Tenant Act - it's a good idea to get your safety net in place first.

"Transparency" is an important quality. Contracts are often written in a difficult language known only to lawyers and it's only right that people are fully aware of what they signing up for.

The contract​

• Security: 100 per cent
• Level of rent: 100 per cent
• Transparency of agreement: 100 per cent
• Negotiability of terms: 100 per cent
• Support to maintain building: 100 per cent
• Transparency of rent reviews: 100 per cent
• Comprehensive agreement: 97 per cent
• Fair disputes procedure: 97 per cent
• Negotiability of rent reviews: 95 per cent
• Pubco honours contractual support: 95 per cent
• Frequency of rent reviews: 89 per cent
• Support in upgrading fixtures/fittings: 81 per cent
• Support in internal décor: 76 per cent

(percentage rating as "very important" or "important")​

Where help is welcome​

Once in the pub, the level of help offered to develop the business takes a lower priority than the conditions under which licensees start out.

However, overall business support still scores high under the "important" heading if not the "very important".

Broken down, tenants would like most help to develop the more peripheral aspects of the business, such as machines, income from which often makes all the difference.

Staff training comes next, and the future here seems to lie in "train-the-trainer" initiatives in which licensees are given the tools and the skills to coach their own people.

Other kinds of training are the lowest in importance, though, and this presents the pub industry with perhaps its toughest challenge.

Professional development​

• Help to develop overall business: 92 per cent
• Additional income (eg machines): 84 per cent
• Staff training: 76 per cent
• Joint finance of capital projects: 74 per cent
• Support to gain qualifications: 73 per cent
• Help to develop food: 60 per cent
• External training courses: 60 per cent
• Formal in-house training: 58 per cent
• Mentoring programme: 47 per cent

(percentage rating as "very important" or "important")​

The price is right?​

The tie, in which pub tenants have to buy certain goods, in particular beer, through their landlords, is always a contentious issue.

These days, as pubcos broaden the portfolio of products available to their licensees, it is not so much the ability to choose the brands they want that bothers licensees - it is the price they are expected to pay for them, usually way above the market price a freetrader can get.

Job satisfaction and trust are also included under this heading and their high rating shows that the softer issues are also important.

Freedom to choose​

• Cost of goods: 100 per cent
• Job satisfaction: 100 per cent
• Trust in pubco: 97 per cent
• Flexibility of ordering/products: 95 per cent

(percentage rating as "very important" or "important")​

First impressions count​

It is often said that the pub itself is the most important selling point for a new tenant. While that is probably true, the survey reveals that as prospective tenants gaze longingly at the beamed ceiling and inglenook fireplace they are also already thinking seriously about the qualities of their future landlord.

The company's all-round professionalism comes top - first impressions count apparently - and while it may be just another letting for the pubco it should be remembered that it's probably a lifetime decision for the publican.

People also expect to be able to negotiate the terms of the deal. That's not surprising, but how many are presented with a take-it-or-leave-it tenancy agreement and feel too intimidated to quibble?

Finance is another understandable concern. Applicants need as much information as possible about the business they are going into a