An assignment is when an existing lessee wishes to sell the remaining term of the lease they have on their pub to a third party. The premium or the amount in cash terms they sell the house on for will be either set by the lessee who is selling or by their agent. Fuller’s plays no part in determining the price at which it is placed on the market.
Once you have made the decision that you wish to purchase the pub from the outgoing lessee, just like any other pub application you will be required to complete a business plan and attend an interview with the Business Development Manager who is responsible for the pub. If that is successful, a further final interview will take place with the Operations Director at Fuller's.
- Full business plan for the short and long term development of the business
- Profit and loss account for first and second year
- Cash flow forecast for the first and second year
- Confirmation of financial position including proof of finance
- References (personal, banking or trade suppliers)
- The BII Certificate of Pre-Entry Awareness Training.
- A copy of your personal licence
You will be purchasing the entire business and the price you pay could include a premium or cash sum for the goodwill of the business. You will need to ascertain how much goodwill you believe there is and also take into account the rent for the premises and any outstanding repairs there may be before you make your final offer. Included in the purchase price will be all the fixtures and fittings. In addition, on the day of the change, you will need to buy the stock, glassware and sundry catering equipment. A deposit of £8,000 and two weeks' rent in advance will be required by Fuller’s and you will need sufficient monies to place a beer order and have some working capital available once in the pub.
To ensure that you are obtaining the best deal on the purchase of the assignment, you should consider appointing your own valuer. You will have access to at least three years' trading figures, which will be provided by Fuller's. The outgoing lessee is required to furnish you with at least two years' accounts, along with fixed/variable overheads and rates for the business. We would also advise you to request to see the last year's VAT returns.
It is imperative that you have a full structural survey completed on the building as you are purchasing a fully repairing and insuring lease. Any problems found will need to be put right by either you or the outgoing licensee, but this will all be part of the negotiations for the pub.
Any member of staff already employed at the establishment will be your responsibility after the purchase, so ensure that you have all their contracts, working hours and details. You should also check what contracts you have with suppliers and their lengths and terms. A full reminder of the many other points to take into account once you have successfully been appointed can be found in the countdown to takeover section.
Finally, obtain as much professional advice as possible with accountants, valuers, surveyors and the licensing department. Make sure you conduct sufficient research on the pub of your choice, if you do then this will ensure that this is the right venture for you.
You can find all current assignments here.