The combined Greene King and Spirit estate offers greater opportunities to expand both its Local Hero and Turnover agreements, Pub Partners managing director Clive Chesser has told M&C.
Both models – the former launched by Greene King and the latter brought over from the Spirt Leased estate – have recently reached the milestone of 50 sites.
Chesser said the move towards turnover rents within the tied model “better shares risk and reward and aligns our interests more closely, making the partnerships stronger”.
Both formats are turnover-based rent deals. The Turnover Agreement is available as both a ten-year lease and five-year tenancy and is based on fixed rent plus a percentage share of turnover, with heavily discounted beer pricing and no rent reviews.
Local Hero, which Greene King launched in 2011, comes with a royalty charge based on net turnover and offers tenants the chance to buy 50% of their ale free of tie, provided it is from a local microbrewer. Chesser said the model had proved a particularly successful solution for smaller, urban pubs.
Chesser said: “Local Hero is an agreement which allows us to offer something extra to those slightly more quirky pubs, who want to stand out from the crowd. We have even opened microbreweries, and more recently; a gin distillery, within the pubs.”
On the future for both models, he said: “We’ve recently signed our 50th Local Hero agreement and our 50th Turnover agreement. Both will continue to expand and with our recently expanded estate, there are now greater opportunities for our tenants to benefit from innovative and flexible agreement options.”
