Marston's retail agreement awarded accreditation from British Franchise Association
The British Franchise Association has awarded franchise accreditation to pub company Marston's retail agreement.
Marston's introduced the retail agreement to Marston's Pub Company, its tenanted and leased estate, in 2009 to address the challenging market conditions in the tenanted pub industry.
The arrangement sees Marston's Pub Company take responsibility for the retail offer, including drinks brands sold, food menus and retail standards. The franchisee earns a percentage of revenue and is responsible for staff costs. Marston's Pub Company is responsible for other costs.
Marston's said the benefits to customers of the deal included improved standards, and consistent value for money offers.
The company plans to convert approximately 600 tenanted pubs to the retail agreement by the end of 2013. About 230 pubs have been converted so far, with a further 100 conversions planned by the end of this financial year.
The average expenditure per conversion is about £50,000 per pub, with a minimum target return on incremental capital expenditure of 20%.
Ralph Findlay, chief executive of Marston's, said: "The retail agreement is proving to be an appropriate and successful response to the challenges faced by many operators in the tenanted pub industry. It encourages entrepreneurialism amongst licensees, enabling them to manage successful businesses with the benefit of our support, economies of scale and retailing expertise.
"Our recent research has found the number of applicants for the retail agreement to be three times higher than those for a traditional tenancy, with 30% of applicants coming from outside of the industry. Franchise accreditation represents a further step in the development of the retail agreement, and will help us to attract more high quality people to operate our pubs."
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By Neil Gerrard
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