Pubs can generally be split into three groups.  The first are the chains such as Pitcher and Piano, Wetherspoons and Revolution.  The second covers the vast majority of premises who are owned and tied to the same pubco for beer supplies, but trade under their own identities.  This sector is dominated by a handful of companies such as Punch and Enterprise.  The last includes the increasing number of freehold properties that are emerging from PubCo ownership or opening as new businesses. 

In an ideal world all pubs would be freehold, but the path from being tied to freehold is not an easy one, with the existing owners often being reluctant to lose the dual income from both rent and beer supply from a business.  When they do sell, the pub is priced not to only its market value as a building and business, but also to cover future loss of income from the tied beer contract.  This future loss of income adds a significant premium to the value of a property.

When a new owner is looking at buying a pub then it typically will involve a large percentage of the persons capital and / or assets, or a large amount of finance.  Either way the pub needs to be a success to pay back into owners bank account or the finance companies pockets.  But if a pub is a success why would the existing owner want to sell in the first place without covering several years profits as well.  So typically you are left with two paths to freehold if you do not wish to pay this premium, one is to take over a “failing or failed pub” and the second is to establish new licensed premises.

The first approach will generally involve taking on a loss making pub or one which has already closed, which the owner is keen to get rid of.  This means the price is significantly reduced, but has the downside of having to build a customer base from scratch (or having to get rid of the undesired customer base) and having to fund this period of attraction from their own funds.  The other problem with this approach is that the business will need significant investment to get it off the ground regarding renovation of the building, as these pubs are often not the best looked after.

A good example of this is the Hole in the Wall at Hebden Bridge, once a down to heel premises over run with the less desirable members of society, which was shut down after several police raids in quick succession in 2007.  The people who brought the freehold have done an excellent job over the last 4 years of creating and maintaining an excellent pub with great atmosphere and a varied beer and cider selection as good as anywhere within the town in my opinion.

If you are lucky then the locals are more than keen to support a re-opened pub immediately, a an example of this being the Cock and Bottle in Bank Top, which became the true local pub again as soon as it opened.  It did help that it was the only pub in the village, and where there is competition locally, the process of getting people back from the competitors can be a slower one.

The second approach of starting a new pub has resulted in a couple of excellent places in Sowerby Bridge.  The Works, which renovated an old workshop to an airy open plan bar specialising in real ales, including some of their own brews in the last couple of years, is now arguably the best pub in the town.  This pub has gone from strength to strength and now does comedy clubs and corporate functions as a sideline while focusing on its core business.

The second pub of this type in Sowerby Bridge is the Jubilee Refreshment Rooms, a small single room bar, converted from the old waiting room which had been shut for many years.  Serving a handful of good real ales next the railway station, this is a totally different beast to The Works, but is equally successful at what it aims to do, doubling up as a cafe for the adjacent station. This place had a difficult start with vandalism issues, but has settled down to a good regular trade.

These places know what they want to be at their core and continue to thrive by concentrating on that core offering.  At the end of the day this is why we visit the pubs we like, not for the bells and whistles but for what they do best.  Happy Supping until next week.