Punch to forecast profits for lessees

12-Nov-2009 - Last updated on 27-Aug-2011 at 06:42 GMT

Red Lion: estimated licensee profit of £52,665

Punch Taverns has begun to advertise the estimated profit a licensee could expect to obtain from leasing one of its pubs, along with a flexible plan of discounts and rents. It is part of its drive to become "more transparent".

Punch Taverns has begun to advertise the estimated profit a licensee could expect to obtain from leasing one of its pubs, along with a flexible plan of discounts and rents.

The pub company said that the move is part of its drive to become "more transparent" and provide "greater clarity" for those looking to take a leased pub.

Punch has revamped its website to give more of an "estate-agency feel" and provide a "more positive customer experience" for those looking to take on a pub.

The profit forecast excludes the financial benefit of the living accommodation. A detailed breakdown of expected in-going costs is also provided.

Punch is offering a choice of large discounts per barrel, up to £95, in return for

more rent — or smaller discounts, starting from zero, in return for lower rents.

Regional operations director David Wigham an-nounced the changes at the Morning Advertiser 150 meeting for leading independent multiple retailers.

He said: "We want to be the John Lewis of the pub sector — never knowingly undersold.

"We want to be the most trusted and we are absolutely not there at the moment, but we are committed to getting there.

"We need quality operators to run quality pubs with quality support."

He added: "We hope this will help to provide clarity on key financial data."

Wigham said Punch was also looking to up its game in regard to multiple retailers.

He said the pubco had been put off multiples in the past due to bad experiences, mainly with rogue operators Greyfriars and Inn Direct, but now realised the true value of multiples.

It is considering having one point of contact for each multiple — a national account manager.

"You could have the situation at the moment where you have six of our pubs and six different BRMs," he said. "That needs to change."

Wigham is taking feedback from MA150 members on what they would like to see change in the pubco's approach towards multiples. "We need your help to get our strategy right on multiples," he said.

Punch has also launched a reward scheme called "Perfect for Punch", offering a financial incentive for referrals of potential lessees to the company.

Punch has committed to:

• Advertise a range of rents and price lists on available properties

• Share its expectation of fair maintainable trade barrelage, turnover and profit

• Supply the rental assessment as part of the recruitment process

• Confirm the price list with the proposed agreement

• Make sure business plans, rental assessments and agreements marry up and are achievable for new lessees

Profit and rent options case study — Red Lion, Godalming, Surrey

Estimated licensee profit: £52,665 per year

Estimated in-going cost: £49,345

Estimated drink sales: £294,499

Estimated food sales: £84,635