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Punch Taverns - Finding a pub with us Login here Contact us Login Register here Entering the trade: Ways of entering There are five main ways of entering the licensed trade as detailed below: 1. Leased This is the model operated by Punch Taverns. The freehold of the property is owned by a pub company, brewer or property investment company and then let on a commercial lease to an individual or business that operates the premises. The property owner (in this case Punch Taverns) receives a return on their property asset in the form of rent, a share of the margin on the sale of certain goods and services sold by the operation and, in some cases, a share of the machine profit. Taking a lease is pretty similar to running your own business. The difference is that rather than owning the pub you are leasing it. In the main you can operate the property as you wish; indeed the lease agreement refers to the ‘right to quiet enjoyment’. If the pub is owned by a brewer or pub company the pub is likely to be leased on a tie for beer and some other alcoholic beverages. In the case of a brewer the pub will still tend to be branded in the name of the brewer and restricted to selling that brewers’ beer. Pub companies enter into supply contracts with a large number of brewers and offer an unrestricted choice of these products to the licensees. 2. Managed The property is owned and operated by a company who employ all of the staff, you included. You will be the employee of a pub company and will benefit from having a salary. Remember that the business will not be yours, nor will you be empowered to make the major decisions influencing the success of the business. Many managed pubs are branded and each site will tend to cater for a very specific sector of the market. The main focus of managed chains is on high street and roadside food establishments. Major pub chains include Spirit, Mitchells and Butlers (M&B) and J.D.Wetherspoon. 3. Free Trade As a free trader, the property will be yours as you will make the outright purchase of the business and property (including accommodation). You will be responsible for all decisions concerning the business and be free to negotiate with whoever you like in terms of products and services. This is often the most expensive way of entering the trade. The typical cost of entering the business in this way could range from £200,000 to literally millions and you will need to arrange funding for this yourself. 4. Franchised A small number of companies offer this model as a halfway house between the structured and salaried model for a managed pub, and the operational freedom of a licensee running a leased/tenanted pub. An individual operator will lease the property on the understanding they will uphold the brand. The brand will be owned by the landlord and will include strict controls on the maintenance of the brand values. In addition to rent, the franchise will pay a fee for the use of the brand, possibly linked to the turnover of the property. Most other goods and services will have to be purchased from the landlord. Currently Mitchells and Butlers are the only major franchise pub operator in the U.K. 5. Free of Tie Lease This model has a commercial lease where the rent is set according to the prevailing property market. You would be free to source your goods and services from whoever you want. Your landlord will usually be a commercial property company and will provide little in the way of support services. The majority of free of tie leases have developed in high street locations, as managed pub chains have expanded and councils have been willing to allow planning changes of use on former retail premises such as banks, large stores and cinemas. Taking an agreement with Punch The different ways of entering into an agreement   Text Size - Normal Change contrast