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Glossary
Although presented to assist owners, operators and potential buyers of licensed businesses, the information contained in this section is in many cases very simplified. In using this section, you agree to understand the inherent limitations, you agree not to rely upon any glossary content without seeking appropriate professional advice, and declare that you will not hold Inn Control responsible for any loss occasioned in relying upon any information obtained from this website
Annual Percentage Rate of Loan Interest (APR)
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
Assignee
The purchaser of a lease, who accepts the assignment from the seller
Assignment/Assigning
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
Assignor
The seller of a lease, who assigns the lease to a purchaser
AWOPM - Amusement without Prizes Machine
i.e. a coin in slot game/entertainment machine without prizes
AWPM - Amusement with Prizes Machine
i.e. ‘one arm bandit’
Barrelage
The volume of beer sold by a particular outlet, usually stated in 36 gallon units – a “brewers barrel"
Break clause
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
Brim Glasses
Glasses that hold a half pint or multiples and do not allow for a head
Broker (Licensed Trade)
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
Building Insurance
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
Business Plan
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
Cash Flow Analysis
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
Cask
Wooden or metal container used for maturing real ale
Chill Haze
Cloudy layers that appear in the drink when it has been dispensed
Completion Date
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
Composite Barrelage
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
Contents Insurance
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
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
Covenant
A legally binding obligation in a sale or lease
Dilapidations Deposit
A deposit held by the landlord as protection against the lessee failing to repair the property
Draymen
Men who deliver beer, wines and spirits to outlets – often external contracted firms
Dry Sales
Income from food
Easement
A right that the owner of one property has over an adjoining property, e.g. a right of way or a right of light
EHO - Environmental Health Officer
Liquor and catering businesses are subject to inspection and approval by the environmental health officer to ensure compliance with hygiene and safety regulations
Fixed costs
Running costs that do not vary, e.g. rent, rates, insurance, accountancy
Flash Cooler
Chilled unit found at the point of dispense – the cellar temperature drink is then chilled quickly through a choke point at low temperature
Fobbing
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
Good Average Tenants Trade (GATT)/Reasonably Competent Operator (RCO)/Fair Maintainable Trade (FMT)
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
Gross Profit Percentage/Mark Up Percentage
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%
Ground rent
A rent of the land on which a building stands, but excluding the building
Guest Beer
Beer offered for sale other than those supplied regularly. Occasionally outside of the tie
Head
The amount of froth dispensed on the top of the beer or other draught product
Hotel or Residential Licence
A Part IV licence, the conditions of which are varied by the provision of accommodation. No permitted hours apply to a resident or their bona fide guest
Ingoings
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
Internal Repairing
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
LAB & NAB
Low alcohol beer and non-alcoholic beer
Landlord and Tenant Act 1954
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
MAT - Moving Annual Total
A brewers projection of trade (usually expressed as barrels etc.) for a full year based on the trade for a part year
MRO
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
Overspill Glasses
Glasses that allow a head to be dispensed – lined and Crown stamped
PPL - Phonographic Performance Limited
A body that collects licence fees for music publishers from publicans who play music for their customers
Privity of Contract
In the context of leases, makes the original tenancy responsible if a subsequent tenant (assignee) fails to meet the obligations of the lease
PRS - Performing Rights Society
A body which collects royalties for artists and performers from publicans who play recorded music
Put and keep in good repair
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
Repairing and Insuring
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
Tapping
A tap is inserted into a cask as part of the preparation for serving
Temporary Events Notice
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
Thimble measures, or ‘Jiggers’
A measure used when serving spirits and vermouths
Thrawl
Wooden, trestle type bench for storing barrels
Topped up
Beer added if the measure falls below the half pint/pint line after degradation of the head
Transfer of a Business as a Going Concern (TOGC)
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
TUPE - Transfer of undertakings (Protection of Employment) Regulation
The regulations giving employees protection against dismissal when a business changes ownership
Ullage
Shortfall on a cask due to evaporation/leakage (Beer)
Vacuity/Ullage
The air space in the neck of bottled drinks
Wet sales
Income from drinks
