Evan Evans, the Welsh brewer and pub operator, is launching a tenancy agreement whereby the tenants keep the profits from their pub after an annual profit target has been met. The company claims the agreement, which does not require the tenant to pay a standard property rent, would let licensees earn “north of £45,000”. Evan Evans is looking to use it as part of an expansion strategy - it’s in the process of buying four pubs earmarked for the scheme as it eyes 20 managed and tenanted sites within the next 18 months. Under the agreement, the tenant is paid a “minimal” basic salary of £10,000 per year. When set targets for profitability have been achieved, all profits from the pub are kept by the tenant. A business plan, which factors in runnings costs such as staff wages and bills, is agreed upfront. In-going tenants pay a c£5,000 bond and there are no rent payments or repairing obligations. Tenants are tied for beer but chief executive Simon Buckley told M&C Report that major discounts are offered so the pubs can compete with their local competition. “The sky’s the limit for what they can earn out of the business if they work hard,” he said. “Although it’s a tenancy, it’s based on a managed model. It brings all the expertise of the managed side but without the interference.” Incoming tenants must meet certain criteria relating to catering experience and proficiency with profit and loss and cashflow, Buckley said. “This is about finding the right people for the right job,” he added. “There’s a lot of people out there who want to get into pubs but are frightened about the national pub companies.” Evan Evans is looking for pubs to serve real ale, home cooked, locally-sourced food, and provide good accommodation for the agreement. The company said: “This is not a traditional one-sided, old fashioned brewery tenancy; this is an exciting opportunity for us all to build a great business together.” The launch of the agreement marks a first move into tenanted pubs for several years for Evan Evans, which is based in Llandeilo, Dyfed. The firm currently runs five managed pubs and is also looking to expand that estate.