Today I’m going to talk about a different types of pub model. You might be looking at taking your first pub on, maybe you’re unsure of all the different types of pub if you’ve looked in an agents brochure or on an agent’s website.

You’ve got three types;

You’ve got free hold

Free hold is where you buy the buildings and the land. It’s pretty much like buying a house, you’re free within planning regulations to do what you want with the building. You will own it outright or subject to some sort of finance, probably a mortgage. You’re free to choose your own suppliers, you have no tie in whatsoever.

Unless you do take out a loan from a brewery, if you do that to finance it then obviously they want some sort of payback so you’re gonna be tied to some sort of supply agreement with the brewery with a brewery loan.

Then you’ve got leasehold.

These are typically two types:

There’s the brewery lease

Which is longer term, you’re free to sell the lease (the expired part of it), you’re responsible for the upkeep of the building, you will be paying some sort of rent and you you will have a tie, so you’re you’re tied in very much with the pub company or the brewery.

There are out there a second type of lease you might find:

A free of tie lease.

These are often with smaller pub companies or just somebody who owns a few pubs. Free of tie are usually a bit more expensive because as I said it’s giving you two freedom to go and sort your suppliers out.

Then you’ve got tenancy (or tenancy at will)

These are typically for three to five years. You’ve got no value, you can’t re-assign the tenancy, you literally renegotiate it at the end of the three years, you pay rent, you’ll be responsible for the upkeep of the building and you will be tied in for some of your products, so you have to buy from your landlord or pub company.

So they are the three main ones, there is a fourth that is out there, in some instances you can you can’t get a franchise pub. But again much like any other franchise you’re going to be paying, you’re gonna have to operate the pub under somebody else’s banner, under their operating manual and you’re gonna be paying an upfront fee plus a percentage of your turnover.

So they’re the basic ones to help you go forward and enter what I think is a great industry.