Taking on a tied pub tenancy: what to check before you sign

MDE Pub Consultants · 8 min read

A tied pub tenancy can offer an established trading site, a supply arrangement and business support. Before committing, you need to understand the agreement, the condition of the property and whether the business can support the costs you will take on.

The useful question is not simply whether the advertised rent looks affordable. It is whether the documents and evidence support a workable plan for this pub, with your experience and resources.

1. Confirm which agreement and rules apply

The statutory Pubs Code in England and Wales regulates qualifying pub-owning businesses with 500 or more tied pubs and their tied tenants, including prospective tenants. A tie alone does not establish that a tenancy falls within this regime. [1]

This guide focuses on a new tied agreement. Assignments, renewals and short agreements need their own checks. Short agreements have limited Code rights, and successive agreements can affect the position. Ask your adviser to establish the category before using a standard checklist. [3]

Scotland has a separate Code, discussed below. For premises in Northern Ireland, obtain advice for that jurisdiction rather than applying either framework.

2. Get the information before finalising your business plan

For a covered new agreement, the pub company must ensure that you receive the required information before you consider independent professional advice for your sustainable business plan. That information covers the tenancy, premises, tied purchasing obligations, repairs, deposits, insurance, assignment and other matters. [2]

The rent proposal also belongs at this stage. It should explain the proposed rent and new tenancy terms, with supporting information. Some Schedule 2 information need not be supplied if it is not reasonably available or has already been provided and has not materially changed. Receiving a rent proposal is not itself an event that gives you the right to request Market Rent Only. [4]

Create a document list with three columns: received, unclear and missing. For each unclear point, write a specific question. For example: does the quoted purchasing discount apply from opening, and is it conditional on volumes your forecast can support?

Keep the latest proposal and earlier versions. A change in rent, purchasing terms or repair responsibility may mean the plan needs revisiting.

The pub company must advise inexperienced prospective tenants to complete pubs entry training. Check whether an exception applies rather than assuming previous hospitality work is sufficient. Training does not replace advice on the actual agreement. [8]

3. Test the trading assumptions

The sustainable business plan must follow consideration of independent professional advice. It needs income and expenditure forecasts, sensitivity analysis and the effect of rent or other cost indexation, with realistic income and net profit. The pub company must also identify relevant publicly available reports on tied-pub trading and tenancy costs and advise you to consult them. [2]

Treat the rent proposal's forecast as something to understand and test. It may reflect fair maintainable trade rather than the pub's current turnover, and it is not a promise that you will achieve those sales. [5]

Build a monthly forecast around how you intend to trade. Explain the customer offer, opening pattern, staffing and time needed to establish any new food, events or accommodation income. Where you expect an improvement, identify the evidence and the cost of delivering it.

Test weaker sales and higher costs, rather than relying on one favourable case. Include realistic cover for your own working hours. Ask what happens to cash if trade builds more slowly but rent, wages and other bills still fall due.

Independent advice may involve business, accountancy, legal and property specialists. Agree who is checking each area: an accountant's forecast review does not replace advice on lease obligations or the building. [6]

4. Inspect the premises and agree the initial works

The premises review should include any accommodation you intend to occupy. The pub company must advise a thorough inspection and advice from a qualified surveyor with tied-pub experience. [6]

Obtain the Schedule of Condition and compare it with what is actually there. The Code requires information about known initial works, including responsibility and timing. The condition record must be taken into account when repair responsibilities are agreed. [7]

Walk through the pub with the documents, photographs and a list of questions. Check that the trading areas, cellar, kitchen, outside space and accommodation are properly addressed. Ask who owns key equipment and who will repair or replace it.

For each agreed work item, record who will do it, who will pay, when it will be finished and what happens if it is late. Explain the effect on opening and cash flow. A kitchen you cannot use for several weeks should not appear in the forecast as fully trading from day one.

Have your solicitor and surveyor check how the condition record and works arrangements fit the lease. Do not assume that photographs alone limit your contractual repair liability.

5. Calculate the cash needed to open

Prepare a separate start-up cash schedule alongside the profit forecast. Include the deposit, rent in advance, fixtures and fittings, opening stock, professional fees, initial works and working capital. Identify which amounts are estimates, when each payment falls due and what evidence supports it.

The PCA explains that prospective tenants should receive details of deposits, including repayment and interest arrangements, and whether fixtures and fittings must be purchased and how payment works. [8]

Keep recurring expenses separate from money tied up in a refundable deposit or stock. Check whether the cash remaining after entry costs is enough to operate through the quieter months. Have tax, employment-transfer and licensing questions checked by the relevant specialists before committing.

6. Use the separate Scottish requirements

For a Scottish tied pub, use the Scottish pre-lease information requirements. Government guidance identifies a draft lease, rent assessment statement, Schedule of Condition, repair information and details of costs and charges. The rent statement includes a 12-month profit and loss forecast and information about alcohol purchases over the previous three years. [9]

The guidance also covers the current tied-product and service price list and expected changes, including discounts, during the first three months of the lease. Pre-entry training information has its own exceptions, including where a person is already a tied tenant or has been one within the preceding three years. [9]

Ask for advice under the Scottish framework. Do not import the England and Wales eligibility threshold, terminology or training exceptions into a Scottish transaction.

7. Resolve the outstanding points before signing

Make one final review pack containing:

• The current draft agreement and rent proposal, with earlier versions retained.
• Purchasing terms, deposit details and the fixtures-and-fittings inventory.
• The condition record, inspection advice and agreed initial works.
• The business plan, monthly cash forecast and downside case.
• A list of unresolved questions, with a named person responsible for each answer.

If something important is missing, request it in writing and ask your adviser what must be resolved before you proceed. For concerns about a regulated pub company's Code duties, its Code Compliance Officer is a relevant contact. [2]

Contact MDE Pub Consultants to discuss the commercial assessment of a proposed pub tenancy and the information needed for an initial conversation. Any instruction is subject to agreeing scope and checking conflicts. Legal drafting, building surveys and other specialist work require the appropriate professional advisers.

General information checked on 9 November 2026, not advice on an individual agreement. The rules and obligations depend on the location, agreement and circumstances. Obtain advice before signing or making commitments.

General information, not advice for a particular agreement. Rights and deadlines depend on the circumstances. If a date is approaching, obtain appropriate advice promptly.