Charles Wells to offer franchise agreements

by John Harrington

Bedford pub operator Charles Wells is offering all new and existing licensees the chance to become franchisees after a successful year-long trial.

Franchisees are offered extra services not available to tenants or lessees.

The company said it would suit people who want to be their own boss but need extra support.

The franchise agreements mirror Charles Wells' current tenancy and lease agreements.

However, franchisees are offered extra services in return for a combination of rent and 'loyalty payment', which is a percentage of turnover around the 3% mark.

Franchisees are also offered discounts and a share of AWP income.

Some of the services available to franchisees, but optional for tenants, include: independent business accountancy, monthly stocktaking, and help with menus and wine lists.

And services for franchisees that are not available on a standard tenancy agreement include garden maintenance, installation of fire alarms and kitchen cleaning equipment.

'This is not a major change. It's just taking our current tenancy agreement and enlarging to meet the needs of our new customers,' said Charles Wells' retail director Anthony Wallis.

'It gives them a lot more flexibility because they can buy into as much or as little as is appropriate.'

He added: 'There's a shortage of good quality tenants coming into the trade and they are put off by the burden of complex legislation and financial risk.'

The move follows a 14-month trial at the Fox & Hounds in Riseley, Bedfordshire.

Host Jan Zielinski reduced the number of services in his franchise agreement because, as a licensee at the pub for 17 years, he felt he did not need such strong support.

For example, stock takes were reduced from monthly to every two months and the marketing budget was halved to £500.

'The package is suitable for less experienced licensees,' said Zielinski, who was the pub's manager prior to the start of the trial in October 2004.

The company runs similar franchise agreements at 20 pubs across five countries in Europe, where licensees take on English-themed pubs under the John Bull brand.

However, pubs taken on by franchisees in the UK will not be branded.