Running a pub is a dream held by many. It is easy to understand why; pubs are often at the heart of the community that they serve. Whilst the reality of running a pub is often very different to the idealistic dream; it is still an alluring prospect for many. To help you decide whether running a pub is right for you and to help you on your way if you have decided it is, we have put this guide together to help.
When dreaming of running a pub, you will likely have considered what type of pub you would want to run. Whether it be a bustling sports bar, a cosy neighbourhood local, trendy nightspot or anything in between, the decisions you make at this stage will have a significant impact later down the line.
At this stage, it is important to understand the difference in pub operations, particularly the difference between a tenancy, freehold and leasehold pub. Whilst we have an in-depth guide available to read here, to summarise:
A pub tenancy will involve you, as the tenant, signing a short term agreement with a brewery or pub company to run the pub on their behalf.
A leasehold will give you as the operator greater control, and you retain the right to sell the lease at any stage. However, you do not have complete control over the premises or the pub, and it is likely you will still be tied into a strict beer tie.
A freehold pub offers the greatest degree of control. You will own the property, freeing yourself from any beer ties or franchising requirements. However, you will also be responsible for all of the costs associated with running a pub, such as maintenance and supply.
Choosing whether to pursue a tenancy, leasehold or freehold pub is a decision that you will have to make early on. Whilst it is a personal decision for you and your business venture, there are resources and industry experts out there to help you make an informed decision. Typically, tenancy pubs are the most popular choice for newcomers to the industry. Not only do they require lower capital and initial investments, but many of the difficult behind-the-scenes decisions such as the supply chain have already been sorted.
As covered in our extensive guide, whilst the term ‘pub licence’ might be relatively common, there is not a pub licence. However, there are certain licences that you will need to run a pub. Your pub will require a premises licence, and every pub will require a Designated Premises Supervisor who will be required to hold a valid personal licence to sell alcohol. These licences are a legal requirement, and are designed to show that you will comply and enforce all relevant legalities to ensure the safe and orderly sale of alcohol. Pub operators do have certain responsibilities to uphold, such as ensuring the protection of children and the prevention of public disorder, crime and nuisance.
Every pub landlord has the legal obligation to ensure that their pub holds adequate pub business insurance. The extent and nature of the pub insurance that the landlord is responsible for will vary depending on whether they operate a tenancy, leasehold or freehold. The primary difference between tenancy, leasehold and freehold pubs with regards to pub insurance is that freehold owners will be required to take out building insurance; whereas for tenancy or leasehold pub landlords, these might be covered by the property owner. Insurance policies that nearly all pub landlords will require typically include public and product liability, employer liability, contents and business interruption insurance. Pub insurance is a very specialist industry, so it is advised that you seek out the expertise and guidance from a pub insurance broker specialist. The cost of pub insurance will depend on the type of pub operation that the landlord is running, as well as other pertinent factors such as the level of cover taken out.
Running a pub is not an easy endeavour, however it can prove to be a highly successful and lucrative venture should you get it right. Choosing the right premises for your pub is absolutely vital to maximising the chances of success when running a pub. As the UK’s leading leisure property specialist, we at Restaurant Property are enviously positioned to help pair you with your perfect pub. Register your search requirements to start your journey today.
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