Barrel Dregs, whose at fault, Pub Co or Tenant?
One from the Archives, for the unwary.
Strangely it’s other Tenants that are acting as the goat that walks through the slaughterhouse in front of the lambs, and walks down the ramp the other end scot free.
Is it the Slaughter House, the Goat or the Lambs that are to blame.
Make your own mind up from the following true and salutary tale.
A Pub Co pub near Pot Boy in a major village within commuter distance of London.
Current Tenant been there for three years and despite all efforts, lost everything in pursuit of the dream.
Pub on the market for about nine months at £85K.
In the end she accepted just under £40K. Pub is fully tied with three other soundly trading pubs in opposition (two part tied, one free of tie).
Pot Boy reckons that sales are about £200K with known rent at £38K.The pub is now a financial basket case and there are an alarming number of things that need repairing just looking up at the front of the place.
Anyway, back to the point.
The people that moved in two weeks ago have virtually no operational trade experience.
He is a chef with six years behind the stove, she was an accounts manager in a Building Society.
They have both done a bit of bar work “to learn the trade” and they told PB that they both attended a three day residential training course.
The Pub Co was happy with their business plan, which was going to change the food and increase trade, and promised them extensive trade support, which looks like expensive accountancy monitoring to PB.
Nobody seems to have said anything about putting quite a big building back into good nick.
Within two weeks the trade has bombed.
She is a natural born fighter, unfortunately with the customers would you believe it.
He is scared stiff of front of house and produces pub grub food from the safety of his sanctuary, pardon, kitchen.
The part time bar staff, who were always paid cash money (dose not upset the benefits and all that ) have all gone because they were to be paid legit.
PB is looking at a pub proceeding swiftly to the scene of an immediate financial disaster.
So who is to blame, everybody or nobody.
Can’t fault the ex tenant for wanting to get out having lost everything.
BUT she was for certain economical with the truth about the trade losses and never produced a proper set of accounts either to the Agent she used for the sale or the new people (PB has seen the Agents details-should have been signed off by Enid Blyton).
The new people have realised a dream in running their own business BUT didn’t get a survey done and produced a crackers business plan that was to any sane mind a no brainer.
The Pub Co are not the selling party, they didn’t select the new Tenant and have washed their hands in sterile water over what was said to who over the deal that was struck.
BUT they accepted a bonkers business plan, forgot about the repairs of the building (front looks pretty shabby so the back can’t be too clever),and are clearly happy with the level of experience and suitability of the new people who had the money, and produced rent in advance and the security deposit.
On balance the Pub Co COULD have stopped the sale in its tracks BUT if they did the pub would have probably shut through insolvency (seemed to be on the knife edge) and who knows, the new people might have made a go of it. Behind the scenes you could blame other hidden culprits .
The rent was/is far too high and because of the tie, the retail sale price was always going to be just too much (the beer was always the highest priced in the village until the last lady brought the prices in line and presumably crippled her margins).
Would it have been fair to the last tenant to stop the sale and let her take the financial slap in the kisser ?
Would it have been morally wrong to stop the new people from living the dream ?
SHOULD the Pub Co make a judgement call on obvious lack of operational experience. On the last point, Pot boy says a big big YES !!
Yet again a big property company that happens to own pubs, is at the centre of a sticky web leading to the slow death of pubs that could so easily have been saved.
Back to the cellar this time with the tin hat on.
Please Note:- We are not trying to discourage buying and selling of leases, we just want to discourage the legal Rip-Offs that go on, we firmly believe that those taking up a fair Market Rent Option, as it stands at present, could have leases worth serious money, though a number of Pub Co’s will fight tooth and nail to stop this improvement.
The views expressed are not necessarily the editors and www.buyingapub.com accepts no responsibility for them, we do try to avoid offensive or litigious statements being made.
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