Much has been written elsewhere on the virtues of freehold over tenancy or leasehold pubs, but like it or not what most brewers and ‘pubcos’ provide is a ‘low-cost entry’ to the pub trade for budding entrepreneurs. Unfortunately, when things go wrong, many tenants simply don’t know how to manage the situation due to their perceptions of what their landlord is really all about. The following article offers guidance on how to manage your relationship with your landlord to minimise the chance of experiencing a ‘high-cost exit’.
What is a pubco or brewer? The former is a property owning company, the latter brews beer and may, or may not own pubs that it either manages directly or lets out to tenants. Pubcos and brewers are corporations just like any other. In his book “The Corporation” Law professor, Joel Balkan, makes the argument that all corporations are, by their very nature, psychopathic. This may sound sensational until you understand that psychopathic means that they will pursue their own objective without regard to the damage they cause to any third party, in any way that does not infringe laws or regulations. More often than not that third party will be you.
Pubcos and brewers have only one objective: to maximise the level of dividends (earnings) their shareholders receive. If they are a public limited company (plc) then they are legally bound to do so.
The executives and managers of pubcos and brewers have only two interests, protecting their own jobs and achieving the company objective.
They are not your friends. They are not your partners. All they want from you is the maximum amount of money they can extract from you and your business, irrespective of whether you make a profit or a loss.
Ultimately pubcos and brewers, their executives, their managers and their shareholders do not care about you, your family, your staff, your customers, or the community your business is situated in.
Once you accept and understand this fundamental fact of business you can then put strategies in place to protect you, your family and your business.
Pubcos and brewers rely on your desire to make money, your willingness to sacrifice your wealth & health and your determination to make a success of your business to achieve their objective.
Pubcos and brewers rely upon the law. They are experts at it and have huge legal resources at their disposal to ensure that the law works for them, not you.
Whilst many publicans make a good living and experience little difficulty in their dealings with pubcos and brewers, many do fall foul of them. This guide will help you avoid those difficulties and survive what can often be a toxic business relationship. It does not refer to any company and nor does it tar all companies or all their employees with the same brush (after all there are good and rotten apples in any barrel).