“Hello my name’s Jenny” said a blonde woman smiling brightly. She looked briefly at her notes. “It’s Mr. Sayles, isn’t it?
Have a seat. I just need to get a few additional details from you. Now then, do you know anything about running a pub?”
”Errr....not really no.... is that a problem?”
“No problem Mr. Sayles. Quite a large number of our partners enter the trade from other careers; a background in the licensing trade is not essential. You’ll be glad to know we’ve just launched an exciting agreement for new applicants; it’s called ‘Earn while you learn’.”
“Sounds fantastic.”
“Do you have any funds?”
Errr...not really no.... is that a problem?”
“No Mr. Sayles. You see, we’re committed to helping our partners. Lack of capital is not an issue. We’ll get you up and running don’t you worry. Just one question, are you a homeowner?”
“Yes, I have a house in Birmingham.”
“Mortgage?”
“Err..no.”
“Excellent Mr. Sayles, excellent.”
“As I said, funding is not really an issue; we can rentalise all your costs.”
“Sounds great. When do we start?”
“We can start right now. We have some fantastic opportunities available. Have a look at this. I’m sure that somewhere out there we’ve got a pub with your name on it.”
“I’m sure you do.”
“And I’ve got some additional good news for you Mr. Sayles. We’re committed to supporting our partners. With this in mind we’ve come out with a new partnership concept; it’s called ‘Total Support’. We’ll provide you with everything you need.”
“Everything?”
“Absolutely Mr. Sayles. Drinks, food, AWPs, EPOS, you name it, we’ll deliver it. You won’t need to leave the confines of your pub. We’ll come to you.”
There then followed a party political broadcast on behalf of the pubcos.
“We offer fantastic support Mr. Sayles........blah blah blah.......green shoots of recovery Mr. Sayles.....blah blah blah........beer sales showing signs of recovering.........blah blah blah ........we work closely with our partners..blah blah blah......our BDMs are always there for you.....blah blah blah........passionate about pubs...blah blah blah......”
She then turned on the monitor on her computer and played the recruitment video. Another smiling woman appeared on the screen, continuing where Jenny had left off.
“My name is Michelle and I’d like to tell you about my experience of running a pub. My BDM has been fantastic; a real pillar of support. I really don’t know what we’d have done without him. He’s never afraid to take off the suit and put his overalls on; he’s that sort of guy.
Our pubco has been with us every step of the way....blah blah blah..........they’re only a phone call away.........blah blah blah..........life changing experience ...blah blah blah......committed to partnership ......blah blah blah...”
“Sounds marvellous” I responded. “I place great store in the concept of true partnership.”
“We appear to be singing from the same hymn sheet Mr. Sayles, we really do. Do I take it that you wish to proceed with your application?”
“Absolutely. That said, I do have a couple of queries.”
“Fire away Mr. Sayles, fire away.”
“My name isn’t Houdini. Is that a problem?”
“Err....I’m sorry, I don’t follow?”
“Well it’s just that I’m looking at the numbers you’ve quoted on this ‘fantastic opportunity’ and it seems to me that need a magician not a tenant.”
“Err......I’m sorry, I’m not still not with you.”
“Allow me to elaborate. This particular outlet is currently turning over 110 barrels a year yet you’ve assessed FMT at 240. How do you account for that?”
“Well you see Mr. Sayles our previous partner wasn’t REO.”
“Oh, I see. But would you not accept that the first twelve months are the most critical for any business?”
“Err... yes I suppose so....”
“Well if I take on this particular pub then isn’t it the case that I’ll be losing money from day one? Don’t you think it would be more sensible to set FMT at a level which actually allows me to make some profit?”
“Err..yes well err......”
“And while we’re on the subjects of agreements; tied for food? Are you taking the piss?”
“I’m sorry?”
“The reason I ask is because even during the ‘golden years’ a publican was only tied for beer. However as the public’s appetite for beer has waned pubcos have continually sought to take more from the partnership by tying publicans for both spirits and soft drinks.
Not content with what you’ve taken thus far, you’ve now come out with an agreement which obliges me to buy food from you as well?
You see, food is the only area left that allows me to make decent margin. If this is removed from the equation how exactly do you think I’m going to generate sufficient margin to pay the inflated costs of your products as well as an inflated rent, and dare I say it, provide myself and my family with an income we can live on?
I see also that my rent will increase annually in line with RPI. Would it not be fair to say that this is nothing more than an upward only rent review; albeit in alternative guise?
Forgive me, but I’m having difficulty in seeing where my share of the profits is going to come from. After all, this is supposedly a partnership, is it not?”
“Err..yes well err......”
“You see we hear much about pubcos wanting to attract entrepreneurs to the trade. From where I’m sitting there is little evidence to suggest this is the case. Entrepreneurs seek flexibility and choice, yet rather than loosening the shackles, pubcos such as yours appear to be tightening them, obliging publicans to take outlets on even more onerous terms.”
“Err..yes well err......”
“I do hope we’re still singing from the same hymn sheet?”
“Err..yes well err......”
“And of course if I were to take on this agreement, chances are that 12 months down the line I’d be bankrupt. At this point you’ll no doubt take out an injunction on my house to recover costs. Presumably as I enter court to fight the compulsory sale of my house you’ll still be with me, ‘every step of the way’?”
“Err..yes well Mr. Sayles. Err....do I take it you have some reservations about signing one of our agreements?”
“You’re very perceptive. Allow me to give you a couple of suggestions.
Let’s keep things cordial and leave the issue of the tie to one side for a moment, shall we? Now then, how about giving me guest ale provision? While you’re at it, how about setting FMT at levels which reflect the market of 2012 not a bygone era which will never return?
And getting back to the subject of food, why would I wish to purchase it from you? Is it not the case that in such difficult trading conditions pubs most likely to survive are those that have a USP?
I don’t think marketing frozen crap quite fits into that category, do you? Doesn’t this suggest that you’re rather more concerned with short-term profit than the long-term sustainability of your estate?”
“Err...yes well err......”
“Do you actually believe there is any merit in a strategy that encourages pubs to market identical menus? The collective sound of microwaves pinging up and down the country; is this likely to encourage customers to return?
We keep hearing people within the industry saying that that they’re passionate about pubs. They’re certainly passionate about profit, but passionate about pubs? I think not.”
“Err..yes.. well err......am I right in presuming that you won’t be proceeding with your application?”