Meet the spon­sor

Ni­cholas Davies of HRJ Fore­man Laws So­lic­i­tors, spon­sors of the Hert­ford­shire Life Food and Drink Awards out­stand­ing cus­tomer ser­vice cat­e­gory, gives ad­vice for those con­sid­er­ing tak­ing on premises in the sec­tor

Hertfordshire Life - - FOOD & DRINK - info@hrj­fore­man­laws.co.uk hrj­fore­man­laws.co.uk

There are many things to con­sider when run­ning a restau­rant, bar or café. A nat­u­ral fo­cus is on menus, the qual­ity of food and pro­vid­ing ex­cel­lent cus­tomer ser­vice. Then you must also fo­cus on fi­nan­cial mat­ters and prop­erty will be one of the big­gest sin­gle ex­penses for the busi­ness.

If you have am­bi­tions to open mul­ti­ple lo­ca­tions or are seek­ing to lease premises for the first time, the re­al­i­sa­tion of the ‘le­gal’ im­pli­ca­tions on top of the fi­nances can feel over­whelm­ing.

Lease­hold agree­ment

If you are buy­ing a pub, it’s quite pos­si­ble you will be tak­ing a tied lease from a brew­ery. This means you are bound by its terms which may in­clude how you buy al­co­hol and what you sell. It may also con­tain clauses that en­able the brew­ery to cease your ten­ancy if profit tar­gets or agreed terms are not met. Tied leases are usu­ally non-ne­go­tiable, so en­sure you are fully aware of all your obli­ga­tions and li­a­bil­i­ties be­fore you sign the dot­ted line.

If you are tak­ing a free of tie lease, you’ll still need to be sure that its terms are suited to your es­tab­lish­ment. A so­lic­i­tor will help you to ne­go­ti­ate any new terms at an early stage and avoid com­pli­ca­tions later down the line.

If you are buy­ing a free­hold prop­erty, en­sure there are no re­stric­tive covenants in the ti­tle to stop you from op­er­at­ing as a food or bev­er­age busi­ness. Ask your so­lic­i­tor to read the ti­tle from the land registry be­fore you make an of­fer.

Re­pair & main­te­nance

‘From ex­pand­ing busi­ness to first-timers, the le­gal obli­ga­tions on top of the fi­nances can feel over­whelm­ing’

The an­swer to who is re­spon­si­ble for up­keep will be found in the lease­hold agree­ment. In­vest in a sur­vey to know what con­di­tion the build­ing is in. Be clear about what falls un­der your re­spon­si­bil­ity for re­pair, main­te­nance and di­lap­i­da­tion. If prop­erty im­prove­ments are planned dur­ing the ten­ure, these must be per­mit­ted within the terms of the lease.

Trans­fer­ring lease­hold

If you’ve got a lease and want to trans­fer it to an­other owner you’ll need con­sent from the land­lord, and you must demon­strate that the new ten­ant is suit­able to meet the obli­ga­tions of the lease. You may have to pro­vide se­cu­rity and guar­an­tee the suit­abil­ity of the buyer. A so­lic­i­tor will help you to ne­go­ti­ate in these sit­u­a­tions.

Share­hold­ers & in­vestors

Plan­ning on hav­ing share­hold­ers or in­vestors in your restu­rant, pub, bar or café? Then en­sure you have a share­hold­ers’ agree­ment which clearly states who and how busi­ness de­ci­sions are made. This should also in­clude who has con­trol over any fu­ture sale process. If you have mi­nor­ity share­hold­ers this will need care­ful man­age­ment.

Tak­ing on em­ploy­ees

You may take on ex­ist­ing em­ploy­ees if your pur­chase is part of an on­go­ing con­cern. This means their con­tracts will be re­tained. En­sure you care­fully re­view all the em­ploy­ment con­tracts and are sat­is­fied that they match your vi­sion be­fore you make the pur­chase.

Make sure a so­lic­i­tor has checked all the con­di­tions of a premises be­fore tak­ing the leap

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