Enterprise set to unveil new agreements
Enterprise Inns is set to unveil a range of new lease agreements and support packages in the coming weeks as it seeks to attract new tenants and help existing ones.
Speaking exclusively to the Morning Advertiser, Nick Light, who steps up as managing director of operations for the Eastern division at the end of March, said the pubco had been working hard to ensure it remained ahead of the game.
It is set to provide a greater depth of financial information at the outset of agreements and clarify what the expected earning potential of a pub is. It is also set to introduce a consistent rental calculation formula for lessees.
The new agreements will be tested in retailer forums, which have now been re-established after a period of absence.
Light denied the new agreements had been forced on the pubco by the political pressure caused by the damning Business, Skills and Innovation select committee report.
"I think they would have happened anyway because we are always keen to evolve our model to attract and retain the best retailers," he said.
"We introduced some flexible new agreements some 18 months ago, which have proved very popular and our imminent changes are a natural progression of that.
"In addition, we are advancing the levels of disclosure and transparency so that anyone who applies for a pub understands entirely how we have assessed its potential profitability.
"Clearly, it is still up to applicants to make their own business decisions and to take professional advice. We are so keen to ensure that they do that we actually pay £250 towards the fees of their chosen professional advisor for every successful applicant."
Rents
Light also revealed that Enterprise Inns does not set rents purely on a 50/50 split of profits. "No — it's not formulaic," he said. "That myth has grown within the industry and it shouldn't have.
"Every pub is different and rental bids should be a reflection of profitability, desirability of business, the sustainability of future business and prevailing market conditions.
"It should be based on what the open market would pay for the profit opportunity of that business — and the market doesn't routinely pay 50:50."
• Nick Light gives his full views on the beer tie, new pubco codes of practice, rental assessments, pubco support and what makes a good tenant in tomorrow's Morning Advertiser.
