Pubs and Restaurants
If you are buying a pub, then there is nearly always a lease. If the Landlord is one of the large chains, then you are likely to have a “tied lease”. This means that as well as the usual Landlord and Tenant provisions, there will be an additional obligation on you to buy alcohol from the Landlord. Whether this is just beer, or wine and other alcoholic drinks as well, will depend on the terms of the tie. There are also variations as to the prices that are charged and the minimum amounts that must be ordered.
Before you agree to buy the lease, you need the following information:
- Accounts for the last three years. This will allow you to judge a good price for the business as well as see where you may be able to improve turnover.
- A copy of the Premises Licence and any other Licences (eg for playing of live music)
- Copies of all contracts. Do they own everything in the pub or is it leased?
- A full list of fixtures and fittings.
- A full list of employees, details of their hours and length of employment and a copy of their contracts.
- A copy of the lease and of any documents relating to the lease. You also need to see the Landlord’s title. Both of these are likely to be registered at the Land Registry and have their own title numbers so you need to see a copy of those titles too.
- Copies of the rent receipts for the last six months. You need to know not only that the rent is paid and up to date, but that they have not had problems in the past paying the rent.
- Replies to commercial property standard enquiries. We will raise these and any additional ones but they should be supplied with the Seller’s information.
- Copies of any reports, complaints, litigation etc.
Before this stage you should have obtained your Personal Licence to sell alcohol and if you intend to sell hot food, then your basic hygiene certificates.
If the Landlord is one of the large pub owning chains, you are unlikely to be able to negotiate the lease terms. They like to have all their leases on their own standard terms. As such you need us to tell you exactly what liabilities these leases contain – some are worse than others. Most will impose a charge on reviewing a proposed purchaser and dealing with a Licence to Assign so you need to factor in these costs on your purchase (and also when you come to sell on).