Information for Applicants
There is a lot to think about before you take on a pub, so here is some useful information to help you get started. Contact our tenancy team today to register your interest in one of our houses or to find out more about the available pubs listed on our website.The Heavitree Brewery estate is entirely tenanted and leased.
Tenancies are a low cost entry into running a pub as your own business. You pay the pub owner a rent and will generally be tied for the purchase of drinks etc.
Leases are also a low cost entry into running your own pub. You will have greater obligations as to repairing responsibilities etc., but will usually have the ability to sell the lease on, or ‘assign’ as it is known, thus realising any value you have created. Again, you will pay the pub owner a rent and verbally be tied for the purchase of drinks etc.
Summary of agreements:
- Fixed Term
Available for either a one-year or two-year period. If you are new to the trade or do not want to make a longer term commitment at this stage. By arrangement, it may also allow licensees with limited funds a degree of flexibility in purchasing the trade inventory. This agreement is for a fixed period of time and is contracted out of sections 24 to 28 of the Landlord and Tenant Act 1954. At the end of the term there is no automatic right rot renewal however, a new agreement may be granted a
- Standard Tenancy
The Standard Tenancy is available for an initial period of either three or five years and offers security of tenure under the Landlord and Tenant Act 1954. This mean that, subject to some exceptions and relevant legislation, you have legal right to renew your tenancy at the end of the term and thereafter on either a three-year or five-year cycle. this agreement is typically suited to licensees with some trade experience and who have access to appropriate levels of funding.
- Assignable Lease
Available for periods of between 15 – 21 years, subject to negotiation, the Assignable Lease also provides security of tenure under the Landlord and Tenant Act 1954, is renewable subject to the relevant legislation, and is suited to experienced operators who want a business they can develop and then sell on (assign) at a future date.
No pub can operate without a ‘Premises Licence’, a ‘Designated Premises Supervisor’ and a ‘Personal Licence’ in place.
The Premises Licence itself is held by, and will remain the responsibility of, Heavitree Brewery, although you, as the tenant/lessee, will usually be named as the Designated Premises Supervisor – the person responsible for the day-to-day operation of the business.
You cannot be a Designated Premises Supervisor unless you hold a Personal Licence.
All applicants must hold, or be in the process of obtaining a Personal Licence.
Unless you are an existing tenant or lessee or an experienced operator and able to provide us with suitable evidence of your knowledge and skill of running a successful pub business, before entering into any substantive agreement with Heavitree you will be required to have successfully completed the British Institute of Innkeeping (BII) Pre-Entry Awareness Training, at lease five workings days prior.
It is preferable that you also have the necessary practical experience in cellar management, however we do provide personal mentoring services if required.
To apply for a ‘Tenancy’ or ‘Lease’ we require a detailed business plan, to include a projected profit and loss account with estimations of income and related costs and cash flow forecast. We can provide you with example, blank templates for completion.
If you are interested in an ‘Assignable Lease’ your business plan must contain a sensitivity analysis, which examines the business performance on both an increase and decrease in the business income. Our business development managers will be available to offer assistance if needed but you should, in any event, seek appropriate independent professional advice in the preparation of your plan.
Industry benchmarking reports are also available including:
- BBPA Report “Running a Pub: A Cost Guide for Lessees/Tenants”
- Association of Licensed Multiple Retailers “Benchmarking Report”
Further advice and information on planning and benchmarking is available from the following website:
With a fixed term lease or standard tenancy you will usually be required to purchase the trade inventory and stock from the outgoing licensee. The value is determined by an independent licensed property valuer acting for each party and agreed. Heavitree is not involved in this process and is not responsible for the condition or replacement of any items purchased.
You will be responsible for servicing and the annual safety certification of all fire appliance, electrical and gas equipment. We will require a copy of each of these certificates.
Alternatively, especially in circumstances where funding is limited, it may be possible to rent the trade inventory from Heavitree under a lease purchase arrangement.
At the end of your tenancy you will normally be required to sell the trade inventory to your successor with the value being determined as above. In the circumstances that a new tenant has not been found by the end date of your tenancy, Heavitree will purchase your trade inventory, subject to valuation, certification, compliance with statute and free of any encumbrances.
With an assignable lease the trade inventory will usually be included in any premium paid for the lease, and as such may not be subject to separate valuation. You will be responsible for servicing and the annual safety certification of all fire appliance, electrical and gas equipment. We will require a copy of each of these certificates.
