Why run a pub?

If you have ever wanted to run your own pub business, then there are three main ways of doing it:

 

1. Buying your own pub (sometimes called Independent Free Trade). You purchase the pub property and run it how you wish. Fully independent, with no central support from a pub company.
    

2. Leased & Tenanted Licensee. You will take on a lease (typically 5 years) and pay rent to the pub company that owns the property. You also be tied to purchase certain products from the company (typically Beers, Ciders, Wines & Spirits). The price you pay for tied products will generally be higher than if you were a Free Trader. The pub company supports you with business advice, marketing support and training. The upfront costs are less than buying a pub and your building maintenance costs typically split between you and the pub company. You’ll need a minimum of around £10k free cash to invest in this type of pub business.
    

3. Management Agreement. You enter into a self-employed management agreement with the pub company and operate the pub to their model. The pub company pays for all costs associated with the pub including, stock, utilities and repairs. You get paid a percentage of the weekly take (typically 18-30%) from which you pay your staff and yourself. Again the pub company supports you with business advice, marketing support and training. The upfront costs are less than that of a Leased & Tenanted lease and almost all maintenance costs are covered by the pub company. You’ll need around £4k free cash to invest in this type of pub business.

 

Each of these models has it’s own level of start up costs, risks and rewards.  But each allow the opportunity to build a pub business that will be at the heart of its community or high street and the satisfaction that brings.