Glossary

This simply means the amount of alcohol in the beer.  Most beers are between 2.5% to 10% alcohol.

Lenders have to quote the Annual Percentage Rate (APR) of a loan so that you can compare difference schemes. The calculation of APR takes into account other costs such as the arrangement fee and indemnity premium. It gives a more accurate indication of which lending is likely to be most expensive.

The purchaser of a lease, who accepts the assignment from the seller.

One way in which a tenant may pass on the lease obligations to a third party, generally by selling the lease and business to a successor (assignee) who has first been approved by the landlord as assignee.

The seller of a lease, who assigns the lease to a purchaser.

i.e. a coin in slot game/entertainment machine without prizes.

i.e. ‘one arm bandit’.

The volume of beer sold by a particular outlet, usually stated in 36 gallon units – a “brewers barrel”.

A provision in a lease allowing either the landlord or the tenant to terminate the lease at a specified date without waiting for the term to expire.

Glasses that hold a half pint or multiples and do not allow for a head.

In the licensed business transfer context Agents are sometimes instructed to find tenants for Brewers or Pub Cos where the Brewer/Pub Co does not pay us a fee. In such circumstances, the Agent acts as a Broker and the applicant / prospective purchaser becomes a client, paying us a fee for introducing them to the pub which they obtain. This scenario is most common where a short term (e.g. 3-5 years) tenancy is offered.

An insurance policy to protect against loss or damage to a property. It is usually necessary to arrange building insurance upon exchange of contracts, prior to completing a purchase.

An appraisal of a business providing an analysis of what it is achieving at present and what the prospective purchaser might plan to do with it, including profit and loss and cash flow calculations. Business Plans are invariably required by Pubcos of potential lessees and Banks of potential borrowers. Inn Control can help you with this.

One of the exercises in the preparation of a business plan. Even though a Projected Profit and Loss Account may show a profit on the first year, heavy start up payments on refurbishment etc. may cause the business to go into the red in the early months. A month by month cash flow analysis demonstrates when the business is likely to be in deficit so that adequate provision can be made in advance for a Bank overdraft.
 

Wooden or metal container used for maturing real ale.

Cloudy layers that appear in the drink when it has been dispensed.

The day when the property actually changes hands, with the purchaser taking possession following payment of the full price to the seller - usually arranged by solicitors.
 

Used by Brewers and Pubcos as a method of expressing total wet trade including beers, ciders, wines and spirits. Beers and ciders remain as 36 gallon barrels, and wines and spirits are converted to barrelage equivalent. Many Pubcos also include mineral supplies in the composite barrelage.
 

While insurance cover for the contents of a business is not a legal requirement for a freeholder, many leases require the tenant to have this cover.
 

Contracted out of protection of the Landlord and Tenant Act 1954. The effect is that, at the end of a lease, the tenant does not have any right to claim an extension to the lease and must give possession unless the landlord chooses to offer another lease.
 

A legally binding obligation in a sale or lease.

A deposit held by the landlord as protection against the lessee failing to repair the property.
 

Men who deliver beer, wines and spirits to outlets – often external contracted firms.
 

Income from food.

A right that the owner of one property has over an adjoining property, e.g. a right of way or a right of light.

Liquor and catering businesses are subject to inspection and approval by the environmental health officer to ensure compliance with hygiene and safety regulations.
 

When you take on a pub tenancy or lease you will need to buy the Fixtures & Fittings. These refer to the trade inventory items such as furniture that come with the pub.

Running costs that do not vary, e.g. rent, rates, insurance, accountancy.

Chilled unit found at the point of dispense – the cellar temperature drink is then chilled quickly through a choke point at low temperature.

Excessive froth on a draught product – can be caused by a number of different issues, from incorrect cellar temperature or dirty glassware, to drink contamination or dispense gas issues.

A Brewers or Pubco’s assessment of the trade which a good average tenant should be capable of achieving in a particular house. Also called a RCO (Reasonably Competent Operator) or FMT (Fair Maintainable Trade) assessment.

The percentage of gross profit is measured relative to the selling price of goods in comparison with mark-up which is measured relative to the cost price of the goods e.g. (and assuming that VAT is excluded from both cost and selling prices) an item which retails for £1 but costs 50p produces a 50% gross profit and the mark up on cost is 100%.

A rent of the land on which a building stands, but excluding the building.

Beer offered for sale other than those supplied regularly. Occasionally outside of the tie.

The amount of froth dispensed on the top of the beer or other draught product.

Often called Estimated Publican Ingoings. Specifying the total cash capital requirement for a short (1-3) year tenancy, to cover the cost of buying the trade inventory, stock, security deposit and expenses.

Describes the responsibility of the tenant or lessee being limited only to repair, decorate and maintain the interior of the property, plus windows and doors. The lessor/landlord undertakes to maintain the main structure of the building.

Low alcohol beer and non-alcoholic beer.

The main Act setting out the law relating to business tenancies in England and Wales. Unless ‘contracted out’ the lessee has the right to apply for a new lease at the end of the initial lease term, and the grounds for the landlord to refuse are limited to three basic reasons: (a) tenant’s non-compliance with the terms of the lease (b) the landlord wishes to redevelop the property (c) the landlord wishes to occupy the property himself.

These pubs are owned by a landlord (pub company or brewery) and run by that business. Unlike the pub tenancy model where the pub is owned by the landlord but the business is owned by a self employed operator or independent company; a Managed House is managed by an employee – a General Manager.

A brewers projection of trade (usually expressed as barrels etc.) for a full year based on the trade for a part year.

Market Rent Only (MRO) is the right of a tied-pub tenant to go free of tie. To request the option to go free of tie, a tied-pub tenant must give notice to their landlord. Notice can be given if any of four specific MRO events occur:
• At tenancy renewal;
• Following receipt of a rent assessment proposal as part of a rent review process;
• Where there has been a significant increase in price in a tied product or service;
• Where an event has occurred that significantly impacts on trade
 

Glasses that allow a head to be dispensed – lined and Crown stamped.

The Pubs Code Adjudicator ( PCA ) is the independent regulator responsible for enforcing the statutory Pubs Code (the Code). The Code regulates the relationship between all pub companies (referred to as pub-owning businesses in the Code) owning 500 or more tied pubs in England and Wales and their tied tenants.

A body that collects licence fees for music publishers from publicans who play music for their customers.

In the context of leases, makes the original tenancy responsible if a subsequent tenant (assignee) fails to meet the obligations of the lease.

A body which collects royalties for artists and performers from publicans who play recorded music.

The Small Business, Enterprise and Employment Act 2015 introduced The Pubs Code etc. Regulations 2016 (“the Pubs Code”). The Pubs Code came into force on 21 July 2016 with the aim of regulating the relationship between tied pub tenants (“TPTs”) and their landlords, the pub-owning businesses (“POBs”) who rent the pubs to them and sell them tied products.
 
The Pubs Code applies to all POBs owning 500 or more tied pubs in England and Wales. The current POBs caught by the Pubs Code are: Greene King; Marston’s; Star Pubs and Bars; Punch Taverns; EI Group; and, Admiral. The key principles of the Pubs Code are:

- Fair and lawful dealing by POBs in relation to their TPTs;
- That TPTs should be no worse off than if they were not subject to any tie.

The Pubs Code tries to ensure that TPTs:

- Receive the information they need to make informed decisions about taking on a pub or new terms and conditions;
- Have their rent reassessed if they have not had a review for 5 years;
- Can request a market rent only option to go free of tie (by service of a market rent only notice (“MRO notice”) and pay only a market rent in specific circumstances, including at a rent review or renewal of tenancy.

A condition in a lease which makes the new lessee responsible for not only keeping the property in good repair as per its existing condition, but also putting into good condition any current defects.

A clause referring to the responsibility/obligation of a lessee. The lessee is fully responsible for all repairs and insurance of the building to be leased.

A tap is inserted into a cask as part of the preparation for serving.

A licence granted to a licensee providing authority to sell intoxicating liquor away from the premises or outside of usual hours but only at an approved location at a specified date and time. This licence is granted effectively as an additional facility to an existing licence.

A measure used when serving spirits and vermouths.

Wooden, trestle type bench for storing barrels.

Tied pubs are those owned by the landlord (brewery or pub company) that sells products to the pub operator using a tie agreement. Most standard tenancy agreements stipulate that some products, such as beer, have to be purchased from the landlord. A partial tie may allow for certain products to be bought elsewhere, for example wine.

Beer added if the measure falls below the half pint/pint line after degradation of the head.

When a business is sold or transferred as a going concern, whether freehold, leasehold or tenancy, by a VAT registered seller to a VAT registered buyer, provided some basic conditions are fulfilled, VAT is not chargeable on the sale of the assets.

The regulations giving employees protection against dismissal when a business changes ownership.

Unavoidable hortfall on a cask due to evaporation/leakage/pulling through the lines (Beer).

The air space in the neck of bottled drinks.

Income from drinks.