Star Pubs & Bars cuts ingoing costs for new lessees by 60%-70%

Star Pubs & Bars has overhauled its fixtures and fittings policy in a move which it reckons could help new lessees and existing lessees taking on a new tied Star pubs slash their ingoing costs by 60%-70%.

The new policy will see the company own big ticket items, such as ovens, fridges and grills, to help save lessees' capital, improve cash flow and create a more sustainable business.

Star Pubs & Bars said it hoped the new initiative would be particularly beneficial to those lessees wanting to run food-focused pubs, where equipment start-up costs can be very high.

It said it also hoped that it would make it easier for multiple operators to grow their pub portfolios more quickly as less capital is tied up per site.

For Star lessees, there will be savings of around 60% for pubs earmarked for capital expenditure, rising to around 70% for those not receiving investment.

The fixtures and fittings that Star lessees do buy on entry to the pub will typically be 30%-40% of the total value, made up of fittings like furniture, curtains, tables and chairs.

Despite the fact that Star will own the big ticket items, lessees will still be responsible for their repair, servicing and maintenance of Star's equipment, as well as their own.

An equipment inspection will be undertaken prior to any new lessee taking on a pub to ensure equipment is in a good state at the outset.

Star Pubs & Bars will arrange for all necessary statutory inspections of gas and electrical equipment with the costs re-charged to the lessee in a similar way to the current maintenance and statutory inspection programme.

Chris Jowsey, trading director, said of the initiative: "Our research reveals that the high cost of catering equipment is deterring people from investing to increase their food sales. Our new F&F policy is designed to help bridge the funding gap for applicants by boosting their cash flow and reducing the capital they need to raise to lease a tied pub. The programme also furthers our ambition to help enable all our pubs to serve food by 2020 and that 50% of sales should come from food.

"We spend time listening to applicants' views and looking at ways we can best address their concerns. Keeping new lessees' ingoing costs down, together with providing intensive one-on-one support in the first few months focused around individual business plans and maintaining high standards, are key to launching new ventures successfully and ensuring pubs thrive in the long term."

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