HELP major business problem with pub

[James Madden]

Situation, franchise Agreement on Pub with Mitchell and Butler
RENT 52K pa.
breakeven figure approx 6K per week inc weekly rent around £1000PW and all bills and staff costs

Current turnover has in last 7 months never reached the break even point, peak turnover was £4,900 3 weeks ago and now falling off again after a steady growth of about 5% a week for 3 months.

Rent arrears currently 15K. Rising at £1000 per week.
Company now want repayment of rent arrears at additional 800 per week meaning breakeven figure now around £6800.

HELP!!!!
The accountants have been useless we are tied to Milestone and despite numerous attenmpts they have never delivered any accounts at all since the initial start up figures from November last year.

There is no money tio pay the rent arrears or the rent until it breaks even and this seems unlikely to happen at the present time. I NEED HELP!!!!! Its a 10 yr franchise with no option for me to break it.....

 

[MrBaker]

dont know much about the pub industry, but can you not strip your fluid costs down??

maybe approach the franchiser and tell them you cant turn it round with them breathing down your neck and appeal for some time or a temp rent reduction. They may well consider it as they stand to gain zilch a week if you've gone down the pan.

If you can approach them do it with a plan, diversify more into food, or entertainment but go to them with some way of digging yourself out of this hole.

Good Luck

 

[GRDCredit]

What about the suggestions given previously?

http://www.ukbusinessforums.co.uk/forums/showthread.php?t=113420

 

[ethical PR]

I would suggest three areas

1. Meet with your landlords and provide them with a plan based on keeping current rent levels and starting to repay rent arrears after say six months#Give them a cashflow forecast showing how you will manage this.

2. Look at how you reduce your variable costs ie staff, food, drink, entertainment.

3. Develop a PR and marketing plan to bring more trade through the door and increase regular trade. Look at the sort of people that use you and how you can get them to come more often and spend more. Offer food and drink promotions off peak. Think about entertainment to encourage visits on quieter days. Have activities for regulars ie traditional pub games, football, quizzes. Link up with the local indian/pizza and have Indian and beer nights and pizza and wine nights midweek . Provide discount card for regulars