Pub franchising is a well known scam which catches a lot of people who see the phrase “business opportunity” “run this pub” – then one or more of the following happen..
1. The new franchisee or tenant pays over a big chunk of savings as a “franchise fee”.
2. The brewery fleeces them on alcohol and rent. They pay up to 50% or more than independents pay for beer and spirits – 50% more than the supermarkets even…making them uncompetitive – and of course – the effort the brewery should put into upkeep, they actually put into random checks to make sure their systematic THEFT from – sorry I mean exclusive purchase contract with is not being abused by the tenant landlords.
3. If they succeed – the brewery sucks out even more rent tuning exorbitant into eye watering. – a massive increase at the first rent review. Eventually they give up, all savings gone – Just as the brewery expects. Rinse and repeat – find some other mugs – the standard formula used by pub chains.
The breweries have worked out that they can get far more money this way than running sub economic pubs. You don’t have to give the landlord even minimum wage, and he has no rights at all.
Unlike an employee, he has no rights and he can’t even leave. He is locked into an agreement that forces him to buy alcohol over the odds until he runs out of money – and chances are he cannot quit either – in many cases forced to do a runner because of punitive contingent liabilities.