Spirit Leased trials new agreement based on turnover and not rent

It’s part of a number of innovations being introduced by the company.

Others include a so-called “Super 6” deal for licensees, where they can get discounted rates on up to six drinks products to help them compete in local markets.

Co-investment agreement​

Spirit Leased managing director Chris Welham said that the “co-investment” agreement has been introduced at four sites since the summer.

Under the agreement, Spirit takes control of different aspects of the operation such as the menus, till systems and accountancy systems and assists with training.

Percentage of takings​

The licensee’s percentage of the takings would vary from 10% to 20% according to factors such as the size of the property and the cost base of the business.

Welham said it’s a way to “future proof” the business against the continued trend of declining beer sales and rising food income.

A similar model is adopted at Spirit’s 11 franchise sites. Seven of these are branded under Spirit’s John Barras concept and a further four are unbranded but use the basic Barras template.

Welham said this year Spirit Leased hopes to have the franchise or co-investment models in between 30 and 35 sites. “Thereafter it’s about what’s worked and what hasn’t.”

Super 6​

Meanwhile, Super 6, which can be over-layed onto standard Spirit agreements, has been introduced to c45 pubs to date. The lower price points are possible because greater discounts are offered on the key products.“We’ve taken a bit of a haircut on margin but the licensees are able to sell more,” said Welham.

The items would typically include two draught products, two packaged and two soft drinks, but could feature fewer than six products.