Written evidence submitted by Huw Jones
SUBMISSION RELATING
TO RENT
REVIEW PROCESS
DATED AS
1 MAY 2010
— Enterprise
did not start the rent review process in a timely manner. The
first quote we received was dated less than a week prior to date
the new rent was due to be in place.
— The
Enterprise representative promised information verbally and then
refused to provide it when requests were made in writing.
— Enterprise
did not explain their calculations or assumptions relating to
the figures they provided us with.
— Prior
to a meeting the Enterprise rep agreed via email that minutes
could be taken and distributed for sign off as accurate. Information
was promised in the meeting but when the minutes were distributed
for sign off the rep stated that they were simply our notes of
the meeting and would not sign them off.
— In
the same meeting the rep was obstructive and rude as well as either
feigning ignorance or being unaware of basic finance and business
practice.
— The
Enterprise representative ignored most questions posed in writing.
— During
our final meeting Enterprise came with two representatives and
showed us settlements from prior arbitrations. They were a number
of years old and related to premises nothing like our premises.
It was a fairly clear intimidation tactic as they showed settlements
where rent was a much higher percentage of turnover compared to
what they were offering on our premises.
— Subsequent
to the issuing of a Calderbank offer from Enterprise we were still
trying to debate the validity of their figures and engage in dialogue
about them to avoid arbitration. The final pieces of feedback
we received were from the two reps we had been dealing with. Both
were notional P&Ls demonstrating their position in terms of
the rent but had significantly different figures within them.
— Overall
there was no identifiable process.
1. We sent our P&L to Enterprise in early
March as the new rent was due in place on 1 May. We requested
that the process be started but did not receive a quote until
the end of April. This did not contain the analysis promised and
was described as an offer to reduce our rent from £48k to
£44k despite the fact that our current rent was £41.5k.
This was pointed out and concede after we produced recent rent
invoices. We received no further information until a new quote
for £41k arrived a week later.
2. We requested analysis of turnover, margin
and overheads but they were not initially provided. We had to
pursue these and did get them in the end but they were clearly
not representative. When queried on this the response was that
it did not matter what we thought of the figures as changing them
would not result in a change of rental offer.
3. Numerous times we were promised information
verbally but it was never provided (margin analysis).
4. We were very concerned by the fact that the
rep was willing to agree to minutes being taken prior to a meeting
but would not sign them off afterwards. We had arranged this as
we thought he was misrepresenting his position. We also arranged
for a second rep from the estates department not involved in the
rent review process to be present.
5. Enterprise state they consider fair maintainable
trade and average competent operators when calculating the possible
trade of the pub. We had been assured verbally by the Enterprise
rep repeatedly that we were excellent pub operators and were exceeding
fair maintainable trade. Despite this the Enterprise quote contained
a profit figure of 14% higher than out latest accounts. We thought
this was inconsistent and had queried these figures strongly.
In the meeting we asked what if we were better than average competent
operators and whether we exceeded fair maintainable trade. This
was met with laughter and we were told it was a ridiculous thing
to ask. These are Enterprises measurements and they seem able
to quantify them to produce their estimates so we looked on these
as rude and unprofessional.
6. We had been querying the margin % figure as
Enterprise stated it used the costs and sales prices associated
with our pub. Enterprise calculated it as 4% higher than we did.
We produced a weighted sale average to back up our figure but
the Enterprise rep claimed that something like that was not something
they would do. Eventually it was conceded that it was and that
he would provide it. This information was never provided and the
rep subsequently stated via email that they were not required
to provide anything more.
7. After this meeting we distributed the minutes
for sign off but the Enterprise rep refused and reneged on the
promise to provide information he had made in the meeting. We
countered that the 4% difference was £12k in profit that
we as a pub were not making and that he should demonstrate his
calculation as either they were using incorrect information in
the rent review process or he (as our business development manager)
should show us how we should be making this extra profit. He refused
so we asked for his line managers details as we thought that either
he is carrying out the rent review incorrectly or deliberately
not fulfilling his role as our BDM. He refused this request for
his managers details twice.
8. Our final meeting involved the Enterprise
rep we had dealt mostly with (our BDM) and a more senior rep who
oversaw rent reviews over a large area. Enterprise had often stated
that rent was viewed as a percentage of turnover and talked about
the possible range. In this meeting we were shown a number of
arbitration settlements from other pubs. These were old or not
pertinent and the progress of the meeting appeared rehearsed.
9. The last information we received came on the
same day from the two reps we had the meeting above with. One
showed high turnover and high costs and the other low turnover
and low costs. Both came to roughly the same rental figure by
calculation but from different angles.
10. We wanted to go through a defined process
but that did not happen. We were never engaged in meaningful debate
about the trading levels and cost profile associated with the
pub. The rep behaved in a misleading manner which hindered the
process.
11. We have numerous emails and other information
to back up all of the above but it would lengthen this submission
significantly. We are happy to provide this separately.
6 June 2011
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