New breed emerging in race for pub tenancies
Pubcos are finding entrepreneurs who previously put their money into burger chains, print shops and other franchise operations are emerging as a new breed of would-be tenants.
They have found they can run several tenanted pubs for the price it takes to buy into one Domino's Pizza outlet.
Francis Patton, customer services director at Punch Taverns, said the main reason people give for applying for a tenancy or lease has changed dramatically in the past few years.
They now tend to say: "I want to be an independent businessperson" rather than: "I've always wanted to run a pub".
He said Punch is now finding people come forward with business plans that involve running two, three or four tenanted or leased pubs at once.
The comparatively low level of entry cost into a tenancy - as little as £18,000 or £20,000 - can be only a quarter or a fifth that of a franchise operation in other sectors.
"People who, before, would have looked at Domino's Pizza, KFC or Prontaprint are now looking at pubs as well," Mr Patton said.
"A tenanted pub is a very
low cost of entry compared with McDonald's, for someone who wants to run their business."
The boost for pub operators, Mr Patton said, is that the quality of entrant into the industry is higher, with a more realistic view of the business.
Punch is also finding chefs, including ethnic food operators who would previously look at starting a restaurant of their own in high-street premises, are now happy to consider running a food operation at a tenanted pub, with its lower costs and reduced risks.
Regional brewers are also
witnessing a change in the nature of applicants for pub tenancies.
George Barnes, tenanted trade and property director at family brewer and operator Shepherd Neame, said the company has no ex-policeman and just a couple of ex-firemen on its books as tenants right now.
"The standard of applicant for our tenancies is higher than 10 years ago," he said.
Barnes added: "However, you still get people who haven't done their homework."
