Pubcos should celebrate the leased and tenanted model, with a change in narrative needed in “unfair” characterisation, Greene King’s Wayne Shurvinton tenanted told MCA’s Pub Conference.
The managing director of Green’s King’s Pub Partners said while the beer tie was not suitable for all operators, there were many successful careers and business forged from the financial muscle of a pubco, such as Tom Kerridge’s The Hand and Flowers.
Addressing industry delates, Shurvinton compared and contrasted the franchised model with leased and tenanted (L&T), arguing the latter allowed partners a low cost of entry and freedom for operators to run their own business.
He highlighted that with eight different agreements available in Pub Partners, the L&T model was more flexible than franchising, with a “soft” connection to the Greene King brand.
He told the Pub Conference: “I do think we should stand tall in L&T and celebrate what makes our offer unique and special. The tie is not for everyone, and we recognise that - hence why have different agreements - but the tie is there for some.
“There are many people that have built successful careers and businesses, that wouldn’t be where they are today without the financial support and muscle of a pubco.”
Going into more benefits on the model, he added: “We give a lot to our licensees and partners - business consulting, training, marketing, access to our supply chain. What do we get in return? Effectively the beer tie. It’s fair to say we wouldn’t be able to give all that if the relationship wasn’t balanced.
“In L&T, unfairly I think, we get a tough time in terms of the ‘get’ part of the relationship. We need to change that narrative, because it is a partnership.”
Shurvinton said the profit margin Greene King makes from an averagely performing pub was broadly the same is a franchisor would make from a franchisee.
“The way I describe in Pub Partners, there’s almost a soft connection to our brands. Out of 1,000 pubs, 700 of them have a Greene King logo in. The actual operator who’s running them is not operating the brand on behalf of Greene King. They’re effectively running their own business, and happy to have our brand logo.”
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