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Code of Practice for the Tenanted Estate

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Code of Practice for the Tenanted Estate CODE OF PRACTICE FOR THE TENANTED ESTATE THIS CODE We have developed this code to help you understand the way in which our Tenancies Work and the way we do business. In return for our support we expect high standards from you in the way you operate your business. We always want to develop a relationship of trust with you so it is important that you fully understand your commitments. CAMERONS BREWERY LTD Based in Hartlepool, Camerons Brewery is now back in family hands since the Soley Family purchased the Brewery in 2002. The Camerons Brewery philosophy is to offer our customers high quality beers and lagers brewed at the Lion Brewery. The Company owns 72 pubs located in the North of England of which the majority are Tenanted. These pubs provide business opportunities for Tenants seeking a relatively low cost entry into the pub business. The pubs range from community locals to destination food pubs. Camerons Brewery Ltd. is a member of the British Beer & Pub Association (BBPA) and, as such, we offer high standards of fairness and transparency to our Tenants. This Code of Practice follows the pub industry Framework Code of Practice and is accredited by the British Institute of Innkeeping Benchmarking and Accreditation Services (BIIBAS). As members of the BBPA, Camerons Brewery Ltd. also subscribes to the Pub Independent Rent Review Scheme (PIRRS). This Code of Practice is issued for the information of existing and prospective Tenants and confirms the Company’s best practice in the letting and joint operation of our pubs. 1 TYPES OF PUB BUSINESS There are several ways that potential licensees can enter the pub trade. This may be via pub management where essentially you are a paid employee, by purchasing a freehold outlet and running it as your own business or by taking a tenancy or lease with or without a drinks tie. There are different opportunities within the pub business as highlighted below. Managed House: owned and operated by Camerons. Profits are retained by the Camerons. Tenanted House: the freehold interest in the property is owned by Camerons, the Landlord,, but let to an operator who will be obliged to buy specified products (theTie) through Camerons (unless it is free of tie) and pays a rent. Profits are retained by the operator. The Tenant will also be required to invest in certain fixtures and fittings. The Tenancy will not be assignable, i.e. you cannot transfer the Tenancy. Camerons operate both Managed Houses and Tenancies. We are always looking for entrepreneurs to join us. If you want any further details please look at our website on www.cameronsbrewery.co.uk or alternatively contact our Marketing Department 01429 852000. OUR TENANCY AGREEMENT Camerons offer a 3-Year traditional Tenancy Agreement which falls within the Landlord & Tenant Act 1954. When this tenancy comes to an end, the Tenant is able to ask for their tenancy to be renewed. A 1-year Tenancy Agreement is also available which is primarily put in place to allow for a Tenant to run a pub business under a trial period. This Tenancy Agreement does not fall within the Landlord & Tenant Act 1954. Camerons also offer a Rolling 3 Year Business Development Agreement which runs for an initial period of three years and, after that, the Agreement can be renewed for a further three years. This cycle can continue as long as the Tenant wishes provided the Tenant has complied with the terms of their Agreement. However, should the Tenant not wish to renew 2 their Agreement, the Agreement can be terminated at the end of each three year period (upon giving 6 months prior written notice before the expiry of each 3 year term). The Agreement falls within the Landlord and Tenant Act 1954 and all Tenants have the protection afforded by that Act. Please refer to the leaflet which gives a brief explanation of the Act which is available from our BDM as part of the letting procedure. Under these Agreements you will be tied to us for the purchase of all draught cask and keg beers, ciders and packaged products, unless specified, which are sold to theTenant at the producer’s list price less discount. However, you are free of tie for Wines and Spirits. The tie is fundamental to the business and if you break the obligation to purchase draught beers from ourselves you will be in breach of the Tenancy Agreement and as such may be given notice to quit the Tenancy. If you are in breach we may also charge you a surcharge for every barrel/part barrel bought outside the tie. (Please see Flow Monitoring Policy on page 8) We will set out the principles of our agreement at the conclusion of our negotiations in the form of ‘Heads of Terms’ and will provide you with a full copy of the Tenancy Agreement before you are asked to sign any commitment. Cooling Off Period Camerons know that Tenants and their pub have to be a great match. Camerons do their best to ensure that this is achieved. However, despite all of our endeavours you may decide that the site isn’t for you. On the other hand it might be evident to us that you are not happy in the site. Therefore, provided you have completed between 3 and 6 months at the pub either party can end the Tenancy with one month’s notice in writing if on a 1 year Agreement or 3 months notice if on a 3 Year Agreement. If we sell a pub, whether or not to the current Tenant, we do not apply any restrictive covenants which would prevent the continuing and future use of the premises as a pub. Tenancy at Will In some cases where a Tenant is new to the licensed trade it is important for both the Tenant and Camerons to be satisfied that the Tenant is suited to the trade as well as the particular public house in question. In such instances, we can grant probationary agreements and/or tenancies at will which are terminable by either side with immediate effect giving notice and which protects you as well as Camerons. 3 PRE-ENTRY REQUIREMENTS If you are new to the licensed trade we require you to undertake a short training course to ensure you are fully aware of the nature of the contract you will be entering into and that you know exactly what is involved in running a pub business. Pre Entry Awareness Training (PEAT) – Available electronically from the BII www.bii.org (This requirement may only be waived if you are able to demonstrate to our satisfaction that you have the necessary skills and experience of running a successful pub business). We do encourage you to take on training opportunities and can advise further on this matter. You will also need to hold a personal licence 1 Prior to signing a form of Tenancy Agreement we will require you to prepare a business plan and demonstrate that you have taken independent professional financial and legal advice. Your financial adviser should make you aware of the effect that any fluctuations in trade may have on your business plan. We strongly recommend any prospective Tenant conducts their own enquiries, visits the pub at different trading times and assesses the competition. We will provide you with as much information as possible to help you build your business plan including: • The pubs trading history in terms of barrelage and machine income and a ‘shadow’ profit and loss account which will demonstrate the potential fair maintainable trade. Please bear in mind that these figures are a guide to the trading potential.We cannot guarantee such levels can be maintained in the future. • Relevant information we have about other Camerons outlets in the area which may compete with you and any plans for those properties. • Potential investment opportunities in the pub you are interested in and the effect of any investment by ourselves in terms of rent. • Provide the premises licence and explain any restrictions • Provide cellar training prior to entry • Introduce you to an existing Tenant who will be able to provide support 4 1 Full details of how to obtain a personal licence are available from the licensing officer of your local authority or see www.bii.org TERMS OF BUSINESS • Price List: A copy of our current trade price list and barrelage discount scheme will be supplied with this Code together with all products available. • Payment Terms: Payment to Camerons is one week in arrears by Direct Debit for rent and goods, provided adequate security is provided • Deliveries: Deliveries of tied products are made weekly. There are occasions during exceptionally busy periods when you may under order. If an additional delivery is required (slip order) you must place the order as soon as possible. This is in order to ensure Camerons have sufficient time to meet your requirements. Camerons reserve the right to charge for additional deliveries where we believe the system of slip orders is being abused. If you run out of a product at short notice during non delivery periods such as weekends/out of office hours, please contact your Business Development Manager in the first instance. • Ingoing’s: - Deposit. A deposit is required; the amount is dependent upon the turnover of the business. All deposits attract interest and are repayable when the Tenancy completes less any amounts deducted should monies be outstanding. An annual statement will be provided. - Fixtures & Fittings: Tenants fixtures and fittings can be purchased or rented on entering the Tenancy. These items include most of the moveable items such as carpets, curtains, furniture, light fittings, catering equipment, etc.
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