Thursday, February 19, 2009

The Publican 19 February, 2009

By Adam Withrington

Can the pub trade be franchised?

Franchising? I do realise that you are being serious here BUT only an industry outsider applying themselves to an academic analysis of a paper version of reality or a pubco CEO clinging desperately to the idea that there MUST be some way of keeping the gravy train on the tracks could even think of suggesting that pubcos might change their ways and start doign meaningful franchise agreements with lessees.

"But it barely struggles to break even. Why? Because the rent it is charged by the very well-known super-regional pubco it leases from is punitively high."

THIS is KEY to the whole problem of pubs going down the pan, closely followed by the price of beer the freeholders charge through the tie... At least DOUBLE what beer costs in the free marke. Not complicated it is? If your rent is too high and your drink products cost even more proportionately compared to free trade outlets - the writing is on the wall - YOU ARE NOT GOIGN TO SURVIVE.

As it is, it's only tied pubs who do a lot of trade in non tied produce who manage to get by - as you indicate at the head of the articlt.

Franchising is NOT an option for the pubcos - that would mean investment on a huge scale into something they don't understand - OPERATIONS. Pub companies have squeezed the real operators - their lessees - too hard for too long. There's no juice left and the pubcos are in debt last their knecks already. They don't have any collateral left.

IF franchises ever become areality in the pub market look out for dreary, lifeless, totally unisnpiring decor, trading concepts and unbelievably mediocre food served out of thick plastic bags via microwaves... The Best Of British.

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