The “Area Manager”
In order to understand the relationship you might have with a landlord’s area manager you have to understand their role in both the application process and the ongoing management of the pub for the landlord.
The area manager is tasked by his or her employers (the landlord) to maximise the rent that can be taken for the pub, maximise the amount of tied products purchased by the pub operator and to maximise the overall profit and return on investment of the landlord company. Most area managers will have responsibility for 30 to 60 pubs and will visit each pub on their patch every four to eight weeks.
Their role includes recruiting tenants, setting rents, preparing business plans for the pub (including forecasting and budgeting), dealing with repair issues and the licensees’ issues, capital development (such as major refurbishments or building works), marketing and promotional activity and providing business advice and training to their tenants.
To commission a bespoke Rent Estimate Report from How To Rub A Pub for any pub you are considering click here.
What you will find, in practice however, is that their principle role is to enforce the tie (i.e. ensure that a tenant only sells products bought from the landlord and not elsewhere), selling new products to the tenant that the landlord wishes to “push” and credit control (making sure the rent and trading accounts with the landlord are up to date). See separate article on How To Manage Your Relationship With Your Landlord
The area manager will have been sent a copy of your application so make sure that when you fill out the application form you do so neatly, giving as much information as you can and include a photo of you (and your partner if applicable). The application form is the first impression a pubco or brewery will have of you so getting this stage of the process right is essential.
If you have successfully completed the application form and fulfil the basic criteria required by a landlord to rent one of their pubs you may be offered the chance of an interview (either for a particular pub or generally for the company). This step in the application process is as important as the application form as you will be “filling in the blanks” for the area manager/company and the decision whether to progress your application for a pub or suitability for other pubs will be made as a result of this meeting.
Top Tip – the area manager is looking for someone to rent the pub you are considering and as such you can prepare yourself to be just the person they are looking for. Turn up early, well presented and well briefed on the pub and its locale. Prepare a business plan (either in the format the landlord often provides or one you have devised yourself). Know how you are going to finance your business start up, know how you will introduce further funds if required and bring proof of that funding (or at the very least an “in principle” offer from any lending source.)
Things you will need to fund are: rent and landlord’s building insurance in advance, rent or security deposit, purchase of inventory, stock, glassware, your first order for beer etc from the landlord or their nominated supplier(s), advance payments on hired items (such as tills, bins, glasswashers etc), sometimes cash deposits to utility companies if the previous tenant or lessee has left outstanding balances on their bills and Sky TV (if the pub has it) who usually expect payment in advance for their subscriptions..
The Business Plan
Not only is this the landlord’s opportunity to find out whether you have the necessary skills, funding and acceptable business plan it is also your chance to ask questions about the pub you are applying for. For instance updated information about the rent paid (including any concession to the current or last operator) and current information about overheads, pubco costs (insurance for instance) and up to date barrelage figures (including everything that you will may be tied for).
You will also want to know about any outstanding issues relating to the pub such as repairs and maintenance works by either the tenant/lessee or the landlord or notices from officials such as the local Environmental Health Officer or Fire Officer. You should also find out if there are any outstanding insurance claims for the property and what, if any, insurance claims have been made relating to the pub in the last three years.
This interview may also be your opportunity to discuss the assistance your landlord may extend to the business, such as rent concessions (introductory or permanent reductions), help with repairs or refurbishments, help with marketing and promotions and any discount deals available on the purchase of tied products.
Top Tip – get written confirmation of any promises regarding the help your landlord offers and be sure that you are happy with the deal before you sign any tenancy or lease – you probably won’t be able to renegotiate the terms after you’ve signed up and, sadly, you cannot rely on verbal promises from anyone.