YOUR QUESTIONS ANSWERED
We know that taking on a pub is a major decision, and we want to ensure that you have as much information as possible before making any commitment.
Our recruitment team Shelley Castle and Linda Reece receive a number of questions fairly regularly, which they have answered below.
If you have any other queries, don't hesitate to contact them.
What is a Tenancy agreement?
A: An agreement between a person who rents a brewery-owned public house from the brewery, and runs the business as a self-employed licensee.
How long does a tenancy agreement last?
A: It is a rolling three-year agreement. It is not excluded from the Landlord & Tenant Act and at the end of the initial and any subsequent three-year term, the licensee has the right to a further three-year term. Rent is agreed before the tenancy starts or is renewed and is not increased annually in line with the RPI, but is discounted from the full market rent in Years One and Two of the term, to allow tenants to invest and grow their business. Should you wish to leave, you need to give the company six months’ written notice.
Do I need to have run or worked in a pub in order to apply for a tenancy?
A: No, although previous experience is useful. We are looking for enthusiastic, committed individuals with a flair for hospitality and good business sense.
How long does the tenancy process take?
A: It depends on a variety of factors, such as the notice period for the outgoing licensee, and the qualifications held by the applicant.
How much finance do I need to become a tenant?
A: You will need to take independent legal and financial advice and construct a financial and business plan. Generally, applicants should have a minimum of £10,000 to invest in the business.
What does my initial investment cover?
A: At the start of a tenancy you will buy the inventory for your pub at a valuation agreed between independent licensed brokers. You will need to employ a broker to do this on your behalf. When you leave the pub, you sell on the inventory to the next tenant or back to Shepherd Neame – and your deposit will be returned. You will also buy the pub’s existing stock, pay one week’s rent in advance and a deposit.
Is there any way of proceeding if I’m not fully financed?
A: Shepherd Neame will consider offering financial assistance, such as interest-free loans for the inventory.
What happens to the staff when I take over?
A: When you take over the tenancy, the Transfer of Undertakings (Protection of Employment) rules apply, meaning that employed staff transfer with the business. They are entitled to work for you under the same terms and conditions that they had with their previous employer. The outgoing tenant should provide you with all details, including rates of pay, hours worked and dates of commencement.
What are the rules on where I buy my pub’s supplies?
A: As a tenant, you will be required to buy all 'wet' goods – beer, cider, wine, spirits and minerals – from Shepherd Neame.
Who is responsible for the decoration?
A: Shepherd Neame is responsible for the external redecoration of the property. However, it is the tenant’s responsibility for the internal decoration for various parts of the premises.
Is any assistance provided if I wish to refurbish my pub?
A: A matched investment scheme can be considered and allows tenants to benefit from a contribution towards their pub's refurbishment and improvement. Any structural changes are carried out by the brewery.