Nobody gets a free ride in this business

"Picture yourself in the pub of your dreams…" the headline read. I tried ever so hard but the only image that came to mind was a pub where the licensee was paid to keep his doors closed - rather like the wonderful set-aside arrangement some farmers have.

Even so, the headline captured my attention, so I read on. What I discovered was that Scottish & Newcastle had decided to run what was described as a "unique competition to spearhead its newest lessee recruitment drive ready for the millennium".

Breathless with excitement,I turned to page nine as instructed, where the headline had changed to "Win the pub of your dreams". I discovered that the contest, "the first of its kind in the industry", was aimed at aspiring lessees who were "bubbling with entrepreneurial flair".

The lucky winner would be rewarded with "what could be a cash-free entry into the pub of their choice" - the chance to enjoy £10,000 worth of financial help.

The £10,000, it transpired, amounted to £5,000 off the fixtures and fittings, £3,000 worth of promotional support, £1,000 worth of accountancy advice and £1,000 worth of party kits.

Alarm bells began to ring and there, in the penultimate paragraph, I found what I was looking for. The winner would apparently get a "completely cash-free entry into a pub of his or her choice" from a selection that would be offered within six months of the winner being selected.

"This will be achieved," the paragraph continued, "by a loan for the remainder of the fixtures and fittings, and cash with order terms. The winner should ideally be willing and able to lodge a reasonable deposit."

Call me a pedant, if you will, but that does not appear to be a completely cash-free entry to me.

Clearly, this is not so much a competition as a marketing ploy designed to attract maximum publicity, while at the same time avoiding advertising costs by being presented as news.

Meanwhile, closer to homeÉ

As it happens, there is a Scottish & Newcastle pub in my locality, about a quarter of a mile away. It has a superb trading location, situated as it is on the main road that runs through a village on the outskirts of Preston. It has an enviably large car park, a good-sized catering kitchen, two function rooms, a spacious lounge bar and a bowling green.

On the face of it, the Stag's Head has everything going for it: location, amenities, the lot. Well, almost the lot. You see, one vital ingredient is missing - a licensee. The Stag's Head has been closed and empty for 12 months.

In recent years, it has been heartbreaking to witness the sad procession of licensees - some of them very able, all of them hard-working - who have tried to make a living there and failed.

I have got to know them all and have been privy to their fear and insecurity when things have become desperate. All of them claimed that excessive rent was the root cause of their demise. I had no reason to disbelieve them.

But when the To Let boards appeared, morbid curiosity drove me to the telephone. Business manager Glen Johnson disclosed that there was a plan to convert the premises into a 110-cover eaterie in the fullness of time, but first they would need to see for themselves that any new lessee was up to the task.

Fair enough. But when Johnson went on to reveal the details of the deal, I was staggered. The purchase of the five-year lease/franchise would amount to £60,000 - this was subsequently raised to £79,500 - and the annual rent, to be reviewed after three years, would start at £47,000 per annum, together with an additional franchise fee of 2% of turnover.

"But that includes all stocktaking and accountancy," he added.

When I spoke to his colleague, Graham Simpkin, he confirmed that "a major refurbishment is planned but we want ducks in a row first". An unfortunate turn of phrase, but a revealing one.

Working on an annual rent of £47,000 with a 2%-of-turnover franchise fee (assuming the turnover is sufficient to cope with such a rental and all the other overheads) would leave the lessee facing a weekly rental of around £1,100 - and that's a conservative estimate.

I assume that the Stag's Head does not come within the remit of the "Win the pub of your dreams" competition but, even so, competitors would be well advised to note that the pub does come under the remit of S&N Pub Enterprises, as does the competition itself.

Caution should be competitors' watchword or they may find themselves the winners of the pub of their nightmares. n

David Best is publican of the Bushell's Arms in Preston, Lancashire