M&B's franchise estate poised to top 100-mark

by Tony Halstead

Managed pub operator Mitchells & Butlers is marketing 22 further pubs as franchise leases.

If all the pubs are successfully let, it will take the total number of franchises past the 100 mark.

The latest pubs selected for lease are located mainly in the north and West Midlands and are being marketed by licensed property specialists Brownill Vickers & Platts which has offices in Sheffield and Derby.

Franchise director Peter Thomas said the latest batch of houses were a mix of food-led and community pubs.

"They are a very mixed bag and it's possible some of them may remain within the managed estate," he said.

"In one way we are conducting a fishing operation to see whether people will bite so it will be an interesting exercise.

"The lease market is very competitive at the moment, with operators having substantial numbers of vacancies within their estates."

Potential lessees are being offered 10-year deals on agreements which carry a full beer tie with a franchise fee payable on top of normal rent.

The fee reflects the volume of support services available from the company as well as managed house quality fixtures and fittings and equipment already installed in most of the pubs.

M&B launched the franchise scheme two years ago in a bid to maintain earnings at lower-turnover pubs badly hit by rising costs.

An industry expert said: "It's a small leased pub estate in all but name. But I think M&B is absolutely right not to sellwhat are, in many cases, great freehold assets that their shareholders can continue to see good returns on."

Brownill Vickers & Plattspartner Rodger Vickers says the latest M&B pubs to go on the lease market represent a tranche of "selective and very attractive" outlets.

Vickers says these properties no longer fit the company's brand profile, but hold enormous attraction for entrepreneurial operators.

"M&B has identified these pubs as highly suitable venues where there are major advantages in working alongside self-employed lessees to take the outlets from strength to strength," he said.

"The franchise lease has distinct and very special advantages to assist operators in doing this.

"There are already lessees who can attest wholeheartedly to the success of the franchise and response to this latest batch of pubs advertised has been simply excellent."