Business Plan for Brewery Owned Pub

[Exclusive]

Hello,

We have someone in the process of applying for the lease on a Brewery owned pub.

They have sent a blank business plan for my friends to fill out.

The current tenants of the pub will not release any figures, such as electric costs, gas costs etc.

How would one go about approximating all the figures?

Regards

 

[David Griffiths]

Ask the Brewery if they can provide typical values?

If you use an accountant to help, they might be able to give a range of values based on other businesses that they deal with.

Having said that, it would be risky to start a business without a firm grasp of what might be a fairly significant cost.

 

[Chris Ashdown]

Nobody should ever consider taking over a business without seeing at least three years accounts,

If the present landlord is leaving as he/she has made a loss, then its in his best interest to let you see what has happened if he wants to get someone to pay for fixtures and fittings and buy quickly, if he / she is not talking there in deep **** andhow long would it take to turn the pub around if anyone ever could, some pubs are never going to make money ever again which is why so many are sold freehold without any ties to what they can be used for

 

[talkinpeace]

RUN AWAY.
WHY are they selling?
RUN AS FAR AWAY AS YOU CAN
tied pubs are dead in the water
DO NOT SIGN ANYTHING
till you have seen three years worth of HMRC agreed accounts

 

[patientlady]

Listen to talkinpeace, then do what he says, Run like the wind....

 

[Exclusive]

As stated above, this is a friend that will be applying for the tenancy, I only know the current tenant is struggling with the pub due personal issues rather than the pub itself.

Currently no open mic nights, quizzes etc are done and they are solely relying on passing trade.

Where the pub is, there are great links for joint ventures/nights etc with surrounding campsites etc.

The current tenant says that they don't want people to know what they are earning.

Would we be able to buy at least documents from Companies house? to give an overall impression of what is happening?

 

[Deleted member 138423]

Your friend has received pertinent advice already. So to reiterate, tell your friend that if the current encumbants will not give out any figures, then they are hiding something. FACT! Tell you friend that if they cannot get these same people to give a minimum of 3 years figures that they should walk away. I can catagorically state that there are other pubs to choose from where the current landlords WILL give three years' figures!

I hope your friends consider their next move with this situation very very carefully and with a great deal of intelligence. Only fools rush in.....

 

[jacksgentlemen]

I can only reiterate what the above people have mentioned. I can help your friends with preparing any plans for a brewery (at a much cheaper price than an accountant).

However if they are not coming forward with figures then something is up, if they are trading as limited company then you may be able to get some, probably abbreviated accounts, but these wouldn't be of much use as they wouldn't tell the whole story.

The outgoing landlord should not have any problem with handing over figures as they are outgoing. I think if you friend is really serious they can either:
- offer to sign a non disclosure form meaning that legally they cannot discuss these figures away from this business venture, any (un)willingness on the behalf of the landlord will speak volumes as there would be no excuse not to give these figures
- advise the brewery of what is going on and see if they can maybe provide figures or put pressure on the landlord to hand these over

 

[David Griffiths]

I'd guess that the current landord is simply giving up the business and the OP's friend is taking a new lease directly from the brewery (or worse, pub company) If that is true, then the outgoing landlord is not part of the deal at all, has no obligation to provide any figures and doesn't gain or lose whether he does or whether he doesn't. Basically, it's safe to assume that he's not going to give anything. It's also safe to assume that he's losing money, or why else would he walk away.

It's easy to look at a pub and think that you know why it isn't doing well, and that there are lots of things that will bring in trade. Much harder to do it. Personally I don't think that it's possible to make any sort of decent profit from a pub rented from one of the pub companies - not only is the rent high, they screw you on beer prices as well. As an example, one of my pubs would have been able to buy a product for £60 on the open market but got charged £110 by their pubco. There's a tendency these days to put meters on all of the beer lines to make sure that you are buying from the landlords.

For me it has to be a free house, or with minimal tie, and probably with a strong food trade as well.

Plenty of people go in with all th figures and lose money. Going in with nothing is a huge risk. Personally I wouldn't touch it with a bargepole

 

[Big Pete]

RUN AWAY.
WHY are they selling?
RUN AS FAR AWAY AS YOU CAN
tied pubs are dead in the water
DO NOT SIGN ANYTHING
till you have seen three years worth of HMRC agreed accounts

Listen to talkinpeace, then do what he says, Run like the wind....

I am with this opinion and add do not just run but don`t look back either , unless you want to end up with no money , wife left you and shuffling down the back streets with holes in your shoes begging for the price of a cuppa ..

 

[talkinpeace]

I'm a she by the way.

I got involved with a licenced premises for sale - as an advisor only.
NONE of the numbers stacked up when I started to ask even basic due diligence questions.
Rent and rates and licences and utility bills were not as initially stated.
Profit margins on drinks were only achieved by pouring Asda basics into labelled bottles
it was all a sham
and the brewery / pubco people ONLY care about their rent.
Private Eye have been on about the problems with the Brulines system for years.

ONLY A FOOL buys a tied pub in the current climate.
The clever thing to do is to wait till the brewery shut the pub, then get a "community action" campaign to buy the freehold - THEN there is money to be made
I've seen the accounts of a couple of failed pubs that really work well now that they are free of all PubCo ties and customer focussed.