Punch trials franchise-style agreements

Punch Taverns is trialling a franchise-style agreement where the licensee takes a proportion of the sales and has to meet certain running costs.

Chief executive Ian Dyson told M&C Report that it mirrors Marston's Retail Agreement, which see licensees typically earning 20% of turnover to pay themselves and staff, with the pub company buying everything centrally and paying all other bills.

"It's more of a franchise," said Dyson. "It's not a traditional tenancy. The partner in that pub will take a portion of the sales and have to meet certain expenses. It manages risk better for the partner and gives us better control [over the outlet]."

It's currently being trialled in a "handful of pubs", with roll-out expected "in the coming months". The trials have included existing licensees on tenancy-at-will agreements and newcomers who have been brought in to the pubs.

News of the agreement came to light as Punch revealed a fall in profits for the 28 weeks to 5 March 2011. Punch today also revealed that Dyson, who was previously finance director of Marks & Spencer, is to take the role of chief executive of Spirit, Punch's managed arm, after the demerger of the company this summer.

"I do have a background that's more retail-focused so I think it was felt that it's the best position for me," Dyson said.