There are three main ways into running a pub. Buying the freehold means owning the building outright, giving freedom over what you sell but requiring significant capital and responsibility for repairs. A free-of-tie lease lets you rent the building and buy drink from whomever you like, usually for a higher rent.
A tied lease or tenancy with a pub company or brewery often has lower rent and entry costs, but you must buy beer and sometimes other drinks from the landlord, usually at higher prices. In England and Wales, tenants of large pub-owning businesses are protected by the Pubs Code, overseen by the Pubs Code Adjudicator, which includes the right in certain circumstances to request a market rent only option and go free of tie. Read the repairing obligations carefully, get a specialist valuation of the trade, and check the planning, licensing and asset of community value status before committing.
What we ask on the show
- Is a tied pub ever a good deal?
- Has the Pubs Code changed anything?
- What should you check before buying a pub?
- Why do so many first-time publicans struggle?