Tenancy Pubs for Sale

UK Pub Sales are a Suffolk based business broker offering a wide range of tenancy pubs for sale, as well as freehold and leasehold pubs in town and village locations.

We have tenancy pubs for sale in many locations across the UK including: Suffolk, Essex, East Anglia, Norfolk, Cambridgeshire, South East, London, Bedfordshire, Hertfordshire, Northamptonshire, Home Counties, Leicestershire, Birmingham, Midlands, West Midlands, Cornwall, Devon, South West, Hampshire, Wiltshire, Surrey, Sussex.

To view the current Tenancy Pubs for Sale please click here.

About Tenancy Pubs

A tenancy pub is essentially a pub which is rented to a tenant for an agreed period of time – typically 5 years. The tenant runs the pub and takes any profits made.

Compared to buying a freehold or even a leasehold pub, a tenancy pub offers several advantages to the new publican.

The most appealing benefit of a tenancy for people starting out in the pub business, is the low initial investment, combined with minimal financial risk. The tenant pays an initial ingoing fee, which ranges between £5,000-£25,000, and a monthly rent. However, some tenancies have zero ingoing costs and require only a monthly or annual rent. The tenant is responsible for running costs such as staff and maintenance, but keeps whatever profits are made. There are a few additional startup costs to consider, such as buying stock, fixtures and fittings (if necessary), and finding a rent deposit (usually 3 months).

The opportunity for a tenant lies in their ability to obtain a tenancy for a modest rent and then improve the turnover significantly above current levels – but tenants need to watch out for clauses whereby rents are reviewed periodically and linked to turnover. It is critical for a prospective tenant to review the pub’s past accounts thoroughly and work out the profit potential, before taking on a tenancy.

A tenancy pub allows a newcomer to build up valuable industry experience but without taking a huge risk. For those intending to make a career of it, successfully managing a tenancy is often a necessary step to proving their ability before going on to a leasehold or freehold pub where the financial risks are much higher and raising finance requires proof of previous experience. It also allows someone thinking about the pub trade to find out if they are suited to it and if they like the lifestyle, without having to make a big commitment.

A tenancy pub is virtually always for an established business where the turnover and performance is known – this makes it much easier for a prospective tenant to do the sums and easily work out whether a particular tenancy is viable and whether the ingoing premium and/or rent looks fair. Taking on an established business also means that staff are already in place and, in general, will remain when the tenant takes over. Having an experienced staff who know the pub and the customers is a great help when it comes to taking over a new business.

If the tenancy is associated with a large pub company, there can be additional benefits in the form of support or training – but these tenancies tend to be “tied” to a limited range of products, specified by the owning company. It is possible to find tenancy pubs which are not tied, however. These will tend to be owned by private freeholders rather than a company with a product line to promote.

The major disadvantage of a tenancy is the lack of stability. The tenancy can be cancelled by owner within a short period, usually 1 month. So if you are looking to put down roots a tenancy may not be the best solution.

A tenancy can also be limiting in terms of the long term value that can be added to the business. A tenant may carry out refurbishments, with the owner’s permission, with a view to improving trade, but these all revert to the owner at the end of the tenancy. Tenants are generally limited to making improvements which will give them a return in the short term.

Prices of tenancy pubs vary widely depending on the location and size of the pub, as well as on whether they are tied. But the main factor in determining ingoing fee and/or rent levels is the existing trading performance of the pub. An established business with a high turnover will attract a higher ingoing fee and rent than one which has lower turnover.

Tenancy Pubs – click here to view our latest Pubs for Sale