The answers to some questions that we get asked a lot at the FLVA. If you don’t see the answer you’re looking for, or want more information, please contact us and we can help you further.
“What do i need to know to get started in the trade”.........You must be aware of the qualifications and licenses that you must hold to enable you to run a public house and what style of agreement is best suited to my experience and finance. See getting started in the trade
“How much will it cost me if i want my own pub”........This very much depends on the type of agreement you enter into, if you buy a free house then this will be probably be into 6 figures but lower cost entry ways are available through managed, tenanted and leased options. See getting started in the trade
“I am taking over a tenancy/lease what do i do about the staff at the pub”......... You will become their new employer and they will have rights under the “transfer of undertakings (protection of employment)” regulations. (TUPE). You need to be very aware of this legislation and further details can be found in our leaflet ”Some important points to consider when taking over or leaving a public house” THE FLVA GREEN PAPER. Within our members area.
“I’ve been offered a pub by a company but the tenancy is for 3 years and it is “contracted out” of the landlord and tenant act, what does this mean”............. In brief the landlord and tenant act gives rights of renewal to business tenancies (subject to certain conditions) when the agreement expires. This means that you have a greater level of security for your business and will allow you to plan ahead with more certainty. If your agreement is “contracted out” the term of your agreement is finite and will finish on the expiry date shown. You will have no legal rights of renewal but must negotiate with your landlord regarding remaining at the property.
“I want to take a pub which is offered to me but it is in poor repair and looks a bit tired , what should i do.”........... You need to check your agreement carefully and see who is responsible for these repairs/redecorations and agree and have it specifically documented in the lease/tenancy who is to put things in order and in what time scale before signing the agreement. Some leases are “put and keep” which unless otherwise documented it will be your responsibility to “put” these issues in order and thereafter to “keep” them as such.
If you are responsible for repairs we strongly recommend that you have a survey done by a competent professional surveyor who is qualified and used to commercial licensed leases. We will always give our advice and assist our members in these matters. See also ”Some important points to consider when taking over or leaving a public house” THE FLVA GREEN PAPER. Within our members area.
“How do i know if what i am being offered is a fair deal”...........There is much information that should be provided to you by the landlord company in the discussions surrounding your taking any agreement which should assist you in coming to this decision we can advise on these specifics and provide you with further assistance in the production of your business plan. You should also take on board the services of a qualified trade accountant such as a member of the “association of licensed trade accountants” (ALTA) details can be found on the web or in our members area.
“I have never been self employed and becoming an employer is a worry to me what can i do”............. We are there to assist you from start to finish. We can provide members with contracts of employment, for new staff, (established members of staff should already have one from the previous tenant, if not you need to resolve this issue quickly). We also provide advice on employment issues such as pensions, maternity and paternity legislation and disciplinary procedures should the need arise.
“I have heard people talk about GP’s , what are these”.......... GP stands for Gross Profit and is the difference between the price you sell an item for, and the price which you bought it at, (both excluding VAT). It is often expressed in percentage terms. An example would be you sell your lager at £3.25 per pint over the bar (£2.71 ex VAT) and buy it at £138 per 11 gall container from your supplier. (£1.57 per pint) This would give you a difference (profit) excluding VAT of £1.14 per pint. This £1.14 expressed as a % of the income (£2.71) gives a GP of 42%. You would use this to calculate how much profit you had made on a given level of sales. We provide members with a ready reckoner so they can easily calculate what GP a product is giving. Members area.
“What is a stocktaker”.......... This is a professional person who will assist you in the running of your business and the control of your stocks they can advise you on the GP’s you are making at the pub, whether or not it looks as if there are stock or cash deficiencies. They are a very effective management tool in running a business. They will also act on your behalf when you first enter into the business to ensure that the price you are being charged for the Stock and glassware is correct. We will be able to suggest a competent professional in your area or put you in touch with the Institute of Licensed Trade Stock Auditors (ILTSA).
“What is net profit”.........net profit is the gross profit you have made as described above from the sale of goods and services. Net profit is what is left after you have taken away all your running costs and expenses such as wages, gas and electric, rates, repairs entertainment etc. This is more fully explained in the business plan section of our members area.
“The agreement i have been given is all gobbledegook to me I don’t understand it”....... When entering into a long term business commitment we recommend that you take the advice of a solicitor who is used to dealing with commercial licensed agreements who will decifer the document and explain to you what you are entering into and the liabilities which that entails. Never rush into an agreement you must take advice on all aspects.
“I am part way through my agreement and am due a rent review how do i know if i am being offered a fair deal”.......... We can assist in this matter and can help in evaluating the offer that has been given to you.. Please speak to us to find more detail.