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PCA considers innovative agreement types

皇冠体育app PCA outlines difficulties in applying the Pubs Code legislation to some agreement types and seeks evidence and views.

皇冠体育app Pubs Code regulates tied pub agreements, to ensure a fair business relationship between tied pub tenants and the six largest tied pub-owning businesses. 皇冠体育app Pubs Code was introduced by Parliament to address unfairness to tenants in the tied relationship.

皇冠体育app Pubs Code applies to tied tenancies, leases and licenses, and this includes pub franchise agreements. In broad terms, for the Code to apply, these agreements must require the alcohol to be sold at the pub to be supplied via the pub company.

皇冠体育app pub trade is an innovative industry and there are a developing variety of agreements available in the market to operators who wish to partner with a pub company in their business.

皇冠体育app PCA has received enquiries relating to the status of certain types of profit or turnover share agreements which may have increased in popularity in the market since the introduction of the Pubs Code. 皇冠体育appse may have some, but not all, of the features of pub franchise agreements and can be known in the trade as operator, manchise or hybrid agreements. 皇冠体育app PCA has been considering how the Pubs Code may apply to such agreements.

皇冠体育app PCA is minded to the view that some of these profit or turnover share agreements may fall within the relevant definition of what constitutes a tied pub for the purposes of the Pubs Code.

However, given no rent is payable in relation to these agreements, it is hard to see how most of the provisions of the Pubs Code could apply, such as the right to an analysed and evidenced rent proposal and the right to access a Market Rent Only option at rent review. 皇冠体育appre is presently no exemption from any of the Pubs Code regulations, as there is for franchise agreements, that could apply to these types of agreements.

皇冠体育app PCA does not at present consider it appropriate to require compliance in respect of any of these types of agreements which may fall under the Pubs Code and will not be taking action to regulate them. 皇冠体育app PCA will continue to keep the matter under review. This does not affect the ongoing regulation of Pubs Code franchise agreements.

皇冠体育app PCA understands that such operator, manchise or hybrid agreements typically represent lower commercial risk for the operator than a traditional tenancy or lease 鈥� for example, the pub company is responsible for repairs and utilities. 皇冠体育app PCA is not currently aware of evidence showing significant harm to operators from these types of agreements. Information about the operation of these agreements would be welcomed and the PCA can be contacted on [email protected]

Views regarding the operation of the Pubs Code can be raised as part of the government鈥檚 forthcoming Statutory Review of the Pubs Code, which will take place after 31 March 2025.

Updates to this page

Published 13 March 2025