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Is Fair Maintainable Trade Realistic for Your Pubco Deal?

Last updated: 24 April 2026

The moment your Business Development Manager slides the rent proposal across the table, it’s built on something called Fair Maintainable Trade—and you’ve probably never heard of it. That’s not an accident. FMT is the invisible scaffold holding up every rent figure a pubco will quote you, yet most incoming licensees sign without understanding what it actually means, how it’s calculated, or whether it bears any relationship to what you’ll actually earn.

I spent three years studying this from the inside. When I took on Teal Farm Pub in Washington NE38 on my birthday three years ago under a Marston’s CRP agreement, FMT wasn’t just a number on a spreadsheet—it was the difference between a sustainable business and one set up to fail. In 2025, my best revenue year, I generated turnover that would have been impossible under the FMT assumptions my BDM presented at the outset. That gap tells you everything you need to know about how realistic these figures are.

This article strips away the jargon and shows you exactly what FMT is, how pubcos manipulate it, and whether the numbers they’re showing you will actually work in a real pub with real customers and real overheads.

What Fair Maintainable Trade Actually Is

Fair Maintainable Trade is the annual turnover that a reasonably competent operator should achieve from a pub site under normal trading conditions. It’s not the average. It’s not the best-case scenario. It’s what a competent landlord or landlady should be able to earn in a full financial year, assuming they run the business properly.

The pub industry uses FMT as the baseline for calculating rent because it’s meant to create a sustainable relationship: if you can achieve FMT, your rent should be affordable. The maths looks simple: FMT is used to estimate your profit margin, and your rent is usually set at 50–60% of that estimated profit. In theory, that leaves you with enough to cover overheads and live.

In practice, FMT is the most disputed figure in UK pub tenancy law because “reasonably competent” is vague, and the data used to calculate it is often out of date, irrelevant, or deliberately inflated.

I’ve personally navigated the NSF audit process with Marston’s, and one thing became clear: the FMT they used at ingoing was higher than the turnover benchmarks they referenced in their own publicly available data. The gap wasn’t small. It was material—the kind of gap that would have made the rent unsustainable if I hadn’t outperformed their assumptions significantly.

Where FMT Comes From

Pubcos typically justify FMT using one or more of these sources:

• Historical trading data — what the previous tenant actually earned at the site
• Market comparables — turnover from similar pubs in the same area
• Accounts of the pub company’s other sites — anonymised figures from their own estate
• Broker assessments — external surveyors’ reports (which vary wildly in quality)
• The pubco’s own assumptions — sometimes with no external validation at all

The legal requirement, under UK pub code regulations and guidance, is that pubcos must have a reasonable basis for the FMT they propose. “Reasonable” has been tested in disputes, and the courts have found that vague, unsubstantiated figures don’t meet the threshold. But by the time you’ve discovered the FMT is indefensible, you’ve usually already signed.

How Pubcos Calculate FMT (And Where They Go Wrong)

Understanding the mechanics of how pubcos arrive at their FMT figure is crucial because that’s where the distortion happens.

The Process: Theory vs. Reality

In theory, a pubco should:

1. Gather evidence of what the site has actually traded at in recent years
2. Adjust for inflation, known changes in the site or area, and the incoming operator’s specific strengths
3. Cross-reference against comparable sites to sense-check the figure
4. Present the evidence transparently so you can challenge it if needed

In reality, many pubcos:

1. Use the previous tenant’s best year, not an average year
2. Don’t adjust downward even when the market conditions have changed
3. Don’t provide clear evidence of their methodology or sources
4. Present FMT as a fixed figure, not a range, leaving no room for discussion

When I reviewed the Marston’s proposal for my site, I compared the FMT they quoted against the NSF audit data that was publicly available for similar CRP pubs in the North East. The figure they presented was roughly 8–10% higher than the median for comparable pubs in my area. That gap, translated into rent, was approximately £3,500–£4,500 per year. Over the course of a 10-year lease, that’s a meaningful underestimation of risk.

Common Distortions in FMT Calculation

Using peak years instead of sustainable years. A pub might have achieved £180,000 turnover in 2023 because of a wedding function business or a temporary sports-related uplift. Pubcos often use this as the baseline, ignoring that it wasn’t sustainable.

Ignoring structural changes in the market. COVID disrupted pubs significantly. Some sites never recovered their previous trading levels. Yet I’ve seen pubcos present pre-2020 figures as the FMT for 2025 ingoings without acknowledging the change in customer behaviour or local circumstances.

Not accounting for the incoming operator’s experience level. FMT is meant to be achievable by a “reasonably competent” operator. But if you’re an experienced hospitality professional taking on your first pub, or if you’re completely new to the industry, a generic FMT doesn’t reflect your specific capability. Most pubcos don’t adjust for this.

Using outdated comparable data. The comparables pubcos reference are sometimes years old. Market dynamics change rapidly—especially in rural or changing communities. A 2023 comparable is not a reliable guide for a 2026 ingoing.

Why Realistic FMT Matters to Your Rent

This isn’t academic. Your entire financial model depends on FMT accuracy.

Under a typical tied tenancy, your rent is calculated as a percentage of estimated profit derived from FMT. Most pubcos work like this:

• FMT (estimated annual turnover) = £200,000
• Assumed gross profit margin = 65% (this varies by pubco and type of pub)
• Estimated gross profit = £130,000
• Estimated operating profit (before rent) = £60,000 (after staff, utilities, rates, stock, insurance, etc.)
• Rent = 55% of operating profit = £33,000 per year (approximately £635 per week)

If the actual FMT is 10% lower—£180,000 instead of £200,000—the operating profit drops to approximately £48,000, and your rent suddenly consumes 69% of profit instead of 55%. That’s not sustainable.

Using a pub profit margin calculator helps you stress-test these assumptions, but the calculator is only as good as the FMT you feed into it. If that number is wrong at the start, your entire financial projection is compromised.

Red Flags That Your FMT Is Artificially High

When you’re reviewing your pubco’s FMT proposal, watch for these warning signs:

They Won’t Provide the Methodology

A legitimate FMT should come with clear documentation: which sources were used, what time period the data covers, and how adjustments were made. If your BDM can’t or won’t explain how they arrived at the figure, that’s a red flag. Push back and ask for it in writing.

The Figure Is Higher Than the Previous Tenant’s Actual Trading

This is the single clearest signal that the FMT is unrealistic. If the pub actually traded at £170,000 in the previous operator’s final year, but the pubco is proposing an FMT of £195,000, they’re betting on you being more successful than your predecessor—without evidence that you have the specific skills or advantages to achieve this.

It Doesn’t Match Available Comparable Data

If there are other similar pubs in the same town or district, and their published accounts show lower turnover, the FMT being proposed to you is likely inflated. Pubcos have access to this data. If they’re not referencing it, there’s a reason.

No Adjustment for Your Specific Circumstances

Are you completely new to hospitality? Taking over a site that’s been poorly run? Taking on a pub during a challenging economic period? A realistic FMT should reflect these factors. A generic number suggests the pubco hasn’t actually assessed your specific situation.

The “Reasonably Competent Operator” Standard Is Never Defined

What does that mean for this specific site? What experience should you have? What’s the minimum standard of effort required to hit FMT? If these questions aren’t answered, the FMT is too vague to defend.

How to Challenge Your Pubco’s FMT Figure

You have the right to challenge FMT before you sign. This is not confrontational—it’s due diligence. Here’s how to do it professionally:

Request All Supporting Documentation

Ask your BDM for:

• The previous tenant’s accounts or trading summaries for the past 3–5 years
• Details of comparable pubs used in the assessment, including their location, size, and recent turnover
• Any external valuation or broker assessment, with the valuer’s methodology explained
• A written breakdown of how the FMT figure was calculated and what assumptions underpin it

Most pubcos will provide some of this. If they refuse or give vague answers, that’s a problem. Don’t proceed without clarity.

Get Independent Advice

Consider commissioning a brief independent assessment from a pub surveyor or hospitality accountant. This costs £500–£1,500 but can save you tens of thousands if it identifies an inflated FMT. I’d recommend this especially if:

• You’re new to the industry and don’t have benchmarking experience
• The FMT seems significantly higher than comparable pubs
• The pubco’s reasoning is unclear or inconsistent

Build Your Own Business Plan

This is critical. Using your own assumptions about trading patterns, customer mix, food vs. drinks split, and operational costs, calculate what turnover you actually believe you can achieve. This isn’t a challenge to the pubco—it’s a sanity check for yourself. If your realistic turnover is 15–20% lower than the FMT, the rent will be unaffordable.

Negotiate Based on Evidence

If you have evidence that the FMT is too high, use it. Say: “The previous tenant’s accounts show £165,000 in year three of operation. The FMT proposed is £195,000. What evidence supports that uplift?” Pubcos expect this conversation. A reasonable one will adjust or explain. An unreasonable one will dig in—which tells you something important about the relationship you’re entering.

The Financial Reality: FMT vs Actual Trading

I want to be direct about what I’ve observed across three years of operating a community pub with 180 covers under a Marston’s CRP agreement.

The FMT model assumes a linear relationship between turnover and profit: higher turnover equals higher profit at a predictable rate. In reality, pub profitability is far messier. Some of my most profitable weeks came at lower turnover because the customer mix was better, waste was lower, and labour costs were optimised. Conversely, some high-turnover weeks were less profitable because I was running special events with thin margins.

My best revenue year in 2025 was significantly above the FMT I was presented with at ingoing, yet my profit margin didn’t scale at the same rate because of inflation in labour costs, energy, and stock. The point is this: even if you outperform FMT on turnover, you may not outperform it on profit, especially as economic conditions change.

What actually matters is whether the rent calculation allows you to:

• Cover all operating costs (staff, rates, utilities, stock, insurance, repairs)
• Service any loan or investment repayment
• Make a living
• Build a cash buffer for emergencies

If the FMT is set incorrectly, none of these are possible. You’ll be trading profitably on paper but insolvent in reality.

The NSF audit I passed in March 2026 examined these exact dynamics. It wasn’t just about whether I hit certain turnover targets—it was about whether the business model was structurally sound. One of the findings was that the original FMT assumptions hadn’t fully accounted for the shift in my customer profile (more food, less high-margin spirits). That doesn’t invalidate the FMT; it shows that even with detailed benchmarking, real-world trading throws up surprises.

How to Use This Knowledge Before You Sign

Before you commit to any pubco, use a Pub Command Centre to map out your expected financial performance month by month. This isn’t a one-time exercise. This is your dashboard for understanding whether the FMT-driven rent assumption actually works alongside your real operating costs and customer projections.

The Pub Command Centre gives you real-time labour %, VAT liability, and cash position from day one—£97 once, no monthly fees. It’s the difference between knowing what you sold (your EPOS tells you that) and knowing whether you made money (your Command Centre shows you that).

When you’re evaluating whether a pubco’s FMT is realistic, you need to see past the headline rent figure and stress-test it against what actually happens in a real pub over a full trading year. That’s where this data platform earns its value.

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