Pubs Code Adjudicator factsheet on premises insurance

A new factsheet from the regulator published today outlines what regulated pub companies must do each time they buy or renew premises insurance that it plans to recharge it’s tenants for, as well as what information and policy details tenants should be receiving from the pub company.

For example, should a pub tenant finds a cheaper comparable quote, then the pub company must either buy the alternative policy; or buy its own policy but they are not to then charge any difference in cost to the tenant.

Download your copy of the official PCA factsheet here What_Tied_Pub_Tenants_Need_to_Know_about_Insurance

If you think your Pub Company has failed to deal with your insurance properly either raise it with your Code Compliance Officer (CCO) or speak to Pubs Advisory to see if we can help with raising a dispute or representing your business – for more contact us here

The National Restrictions for all Tiers are published here below

The regulations cover how a business is allowed to operate as a bar, pub, hotel in those tiers.

In the PDF format, you can easily search the document by keywords i.e. Hotel – Meal – Pub etc

Download your copy of the new rules HERE

If you are a tied pub you can use the new rules to trigger MRO and go free of tie – see our blog TRIGGER NEW RENT

Substantial meal case law

Publicans are rightly confused as to the government’s announcement that pubs and bars would be closed ‘except where serving a substantial meal”. So is there anything of comfort in the legal archives (?) fortunately there is a legal case of Timmis v Millman in 1965 which gives the best definitions of what this is. This is not to say local enforcement might not have their own way of defining such matters. Therefore it would seem prudent to have a copy of the case law definition to hand should your pub receive a visit.

The case shows that a Millman and Yarnold had been observed in a bar at 11.30pm consuming light ale and stout outside of permitted hours but within the supper hour extension of the time. The presiding judge found the sandwiches ‘were so substantial, and assisted by the pickles and beetroot so as to justify that it was a table meal and not a mere snack from the bar’. This case was an early test of the 1964 Licensing Act which defined “table service” as:

”a meal eaten by a person seated at a table, or at a counter or other structure that serves the purpose of a table and is not used for the service of refreshments for consumption by persons not seated at a table or structure serving the purpose of a table.”

An even earlier 1955 case of Solomon v Green stated sandwiches and sausages on sticks were found to constitute a meal too.

The government guidelines do not cite the cases above and simply state that a substantial meal is:

‘is such as might be expected to be served as the main midday or main evening meal, or as a main course at either such meal’.

The conditions and what you can do in the three tiers can be found here

National Restrictions and Tiers for Pubs

Note: for any tied pubs renting from the regulated pub companies in England & Wales, the tiers are an MRO trigger – you can go free of tie!

If you want help going free of tie, contact us here and request your MRO > Contact

Link below for a list of Tiers (note the demand is crashing the official site) if you do find out your tier you can post underneath.

https://www.gov.uk/find-coronavirus-local-restrictions

BUSINESS PLANNING FOR PUBS

A guest blog post

COMMON MISTAKES AND HOW TO AVOID THEM

We can all sit down and come up with some ideas for the ‘Dog and Duck’, no problem! A glass of red wine and the creative juices just flow. That Pubco ‘tied’ pub has been waiting for you to appear on the scene. That may be so, and you may be the ‘square peg to fit the square hole’. You probably have some great ideas. But why does the ‘Dog and Duck’ suffer the ‘revolving’ doors syndrome.  Every 12 – 18 months it has entered your inbox as another ‘outstanding’ and ‘fantastic’ opportunity. I am the chosen one!

The starting point is the business plan for an application. Often seen by some Pub Companies & Brewers (PubCo’s) as a document on a tick list that has to be part of a regulatory file, that then accumulates dust!. A mandatory process that rarely gets the attention it deserves. Yet if completed diligently it can really identify if you should be applying for the ‘Dog and Duck’. What are the potential risks? What are the potential rewards?

The nitty-gritty revolves around the numbers.  Half a dozen people could sit around a table and put some numbers into an accounting model. The result would be different with each analysis. The saying is that you can get numbers to say anything. PubCo’s will issue what they think the numbers are. The numbers of course state an applicant will make a handsome profit. You cannot argue with facts like that!!

Over the last 30 years, I have interviewed and appointed many tenants as a former PubCo BDM and subsequently assisted many business plans for would-be PubCo tenants. I have seen, advised and created a plethora of business plans to support aspiring tenants. There are some fundamental things that you must do to create a cohesive business plan that can act as a blueprint for realistic projections. Here are some common faults that I have encountered during my career in the licensed trade, this list is not exhaustive:

12 considerations for your pub business plan

• Applicants do not thoroughly check the pub and the competition. Visiting on different days and different times. They do not note the drinks sold, food sold, staffing efficiency, necessary repairs. Are there any fiddles, staff giving away drinks etc etc.
• Applicants are overly influenced by what PubCo’s tell them. The figures that PubCo’s give them. These figures may include inflated margins, an inaccurate product mix indicating levels of higher margin sales like wines, spirits and minerals that inflate the overall gross margin.
• The BDM seems so nice and supportive. The PubCo always meets it’s promises!!
• Incorrect allowances for beer wastage and sediment.
• A Staffing cost that does not include NI, Pensions and future minimum wage and other known statutory requirements.
• Unrealistic repair and maintenance costs.
• A lack of adequate contingency.
• Cost of capital and loans.
• The first year that does not adequately cater of exceptional ingoing expenses and mistakes.
• Fair Maintainable Trade (FMT) falsely stated.
• Failure to request information from the PubCo that can be made available.
• A pet hate of mine – Accepting recommendations from PubCo BDM’s to appoint chosen ‘panel’ accountants to assist with business planning and ongoing accounting services.

Let me examine the last of these points. In my experience, pub panel accountants do receive ‘leads’ from PubCo’s. Therefore, that could cause an independent observer to conclude that there may be a conflict of interest. That conflict could potentially lead to the creation of a business plan that vindicates the analysis provided by the PubCo. The theory is that the ‘panel’ accountant wants to continue to receive PubCo referrals. Such a relationship could also lead to the ‘panel’ accountant providing conflicted advice when trading. Will a ‘panel’ accountant with such potential vested interests argue a case for a rent reduction?  Improved discounting? Can you guarantee that the ‘panel’ accountant will not share your information with a PubCo without your knowledge? I have encountered situations where this has happened.  I am not saying all ‘panel’ accountants act in such ways. But, can you take that risk? There are many accountants and trade consultants who can advise impartially. Professionals who have a practical operational and accounting backgrounds. No conflicts of interest.

It is inevitable that during the coming months that many tenants will encounter financial difficulties and will need to be well advised in the financial management of the business. Many pubs are likely to become available. Covid19 has changed the pub landscape. Politicians talk of ‘new normal’. Therefore, the business plan that accompanies a ‘new normal’ is even more important.

We specialize in assisting with focused impartial business planning services for ‘tied’ tenants. Our experience extends to middle management roles with large Pubco’s, working with panel accountants, PICAS arbitration, and operating pubs with managers. We, therefore, feel uniquely placed to offer the impartial advice that you need. Often this advice will lead you to ‘walk away’ from the opportunity. That can save a lot of expense and grief. Sometimes to negotiate and have a go.

What you already know is that we are not conflicted, and we do not accept any PubCo referrals or instructions. We only work in the tenants/potential tenant’s interests.

Please contact us HERE for a free no-obligation chat or learn more about our services for business plans and pubs HERE

Peter Mozelewski FBII