Location, Location, Location

Catchment Area And Trading Style

Location is crucial for a pub’s success. A pub’s location, together with its style of operation, will determine which customers use it. For example, a traditional local pub mainly attracts customers from its immediate vicinity. Most of these customers will walk to the pub. Its catchment area may only be a radius of a quarter of a mile. A destination food pub, on the other hand, attracts customers travelling by car and from a much wider area. A catchment area of 15 miles radius is not uncommon.

Once you find a pub that may be suitable, ask yourself some questions:

• What kind of clientele does the pub attract currently?
• What types of people live within its catchment area?
• Are there enough potential customers to build trade further?
• Could the style of operation be changed to attract more customers?
• Which other pubs would you be competing with?
• Is anything in the area going to change that might affect trade?

Prominence And Visibility

An attractive, prominently positioned pub, acts as its own advertisement. Pubs that are visible to the public have a higher profile than those that are hidden. High-street locations, main roads and roundabouts are prominent, sought-after locations. Less prominent pubs need to work harder at communicating with their customers and potential customers. These can be a success and there are many examples of hidden gems.

Footfall And Traffic

These are two pieces of jargon used to describe how many potential customers there are in the immediate vicinity of the pub. In other words, how busy the area is. A pub located on the high street may have thousands of potential customers walking by each day. Another pub, located only a hundred metres away, in a side street, may only have several hundred potential customers walking by. Obviously, the pub on the high street will have a greater potential to attract customers than the one situated in a side street. It is worth checking how busy a location is at different times of day and on different days of the week.

Personal Considerations

The location of your pub should be within easy reach of other facilities that are important to you. If you have children, the quality and proximity of the local schools will be of concern, as may leisure facilities and hospitals. Local issues like levels of crime may be significant and should be investigated. Transport links may be a factor for family and other support network contacts. Put simply, would the area be somewhere you would enjoy living and is it practical for your lifestyle?

Deciding To Buy Or Rent

Deciding whether to buy or rent your pub is often determined by the capital you have available, plus any amount you can borrow. An average tenancy or new lease will require capital in the region of £ 15,000–£ 40,000. Buying an existing lease, on assignment, can cost on average between £ 75,000–£ 150,000 and buying a mid-range freehold pub will cost between £ 300,000 and £ 500,000.

Other factors that will influence your decision will be your attitude to risk and the level of support you will need. Tenancy and leased pubs often have the backing of a brewery or pub company who will provide training and ongoing support. With a freehold pub there is no such support.

Tenancy

What Is A Tenancy?

Tenanted pubs are operated under a tenancy agreement. This agreement is offered by the owner of the property, (normally a brewery or pub company) to individuals wishing to become a pub tenant. The pub tenant runs the pub as their own business and is responsible for paying all the bills. They take on the pub by paying for fixtures and fittings, stock and a deposit. A rent is paid to the owners, and tenants have some obligations to decorate and repair their pub. Tenants may be ‘tied’ to buying certain drinks products direct from the brewery or a brewery nominated by the pub company. Agreements typically run for 3 or 5 years, with some having a guaranteed option to renew the agreement, subject to a rent review. Rents are reviewed on a specified basis; some rents are increased annually in line with inflation.