PUBCO - CASE STUDY

PUBCO

Mike Hughes was contacted by Simon Hatton and Jess Tarver when they were looking to take on a lease assignment with a national PubCo.

With a number of years experience in the licensed trade, Simon and Jess had identified what looked like the perfect business. The village location in North Yorkshire was known to them both, and there was potential for the pub to increase its trade.

Mike discussed the pub with Simon and Jess advising them of the information that they must obtain before making a decision to proceed and buy the lease. Following this discussion it was clear that the information available from the selling agent and the existing lessee could not provide answers to important questions. On scrutiny, the PubCo lease would be restrictive in achieving a profit from the business. This resulted in Simon and Jess realising that the asking price for the lease was far too high, and if they took on the lease with their plans for the operation they would lose money. Although the couple had their heart set on this pub they decided to find another business that would be profitable rather than loss making and with a restrictive lease.

Other PubCo pubs were identified, but in each case the lease associated with the pub presented too much of a liability against the potential profitability of the business.

Just before Christmas 2018, with the help of Mike Hughes, Simon and Jess completed on a private free of tie lease on a pub. The rent is much lower than the original pub they looked at, the lease is less restrictive, the location in the Yorkshire Wolds is exactly what they wanted, and the potential to build the business will mean that they will see the profitable returns of their future hard work.