Assess a Pub Tenancy Opportunity: The Complete Checklist

For a complete overview of the process, read our complete guide to taking on a UK pub in 2026.

Last updated: 24 April 2026

Most prospective pub licensees spend more time choosing a car than they do evaluating a pub tenancy opportunity. Yet a pub lease is a 10-year commitment with penalties that can cost tens of thousands of pounds. You’re not just assessing a building—you’re assessing whether this specific opportunity, under this specific pubco, in this specific location, can actually make you money over the long term. This article walks you through every area you need to examine before you sign anything, because the pubcos are already selling the dream. You need to know the reality. By the end, you’ll have a structured process for evaluating any pub opportunity that’s presented to you, covering financials, operations, the property itself, the pubco relationship, and the legal contract. Most importantly, you’ll know what red flags mean “walk away” and which concerns are just normal pub business.

The Financial Due Diligence: Numbers First

The most critical assessment of a pub tenancy opportunity depends on independent verification of historical financial performance, not pubco projections. Every pubco will hand you a business plan showing growth, stability, and profit. Most business plans are optimistic fiction. When I took on Teal Farm Pub in Washington NE38 three years ago under a Marston’s CRP agreement, the business plan showed one set of numbers. The actual accounts showed something quite different. That’s where due diligence matters.

Request the last three full years of accounts—profit and loss statements, not just top-line turnover. If the pubco won’t release them without a confidentiality agreement, they’re hiding something. You want to see:

• Total revenue (wet sales, food, events, other income)
• Cost of goods sold (what they actually paid for stock)
• Labour costs as a percentage of revenue
• Rent and rates paid
• Any tie obligations and what was purchased from the pubco versus free of tie suppliers
• Seasonal variation—which months are strong and which are dead

Once you have those numbers, use a pub profit margin calculator to model different scenarios. What happens if your revenue is 10% lower than the last year shown? What if your labour costs run higher due to local wage rates? What margin do you actually need to cover your personal living costs? These aren’t pessimistic scenarios—they’re realistic ones.

Ask your accountant or a consultant to verify the accounts independently. Look for red flags: sudden drops in revenue, rising costs, unexplained items. I’ve seen pubs where the previous tenant was paying their family “wages” that inflated operating costs. Once they left, the new tenant cut those fictional costs and suddenly the pub was profitable.

Calculate the ingoing costs separately. The pubco will quote you a deposit, but that’s rarely the full picture. Get a detailed breakdown of decorating costs, stock purchase, equipment, till system, and any other setup fees. Use pub tenancy ingoing costs as a baseline, then add pub-specific items. A 180-cover operation like Teal Farm requires more stock depth than a 60-cover village local—that’s money upfront that you don’t get back.

Never sign a lease without understanding your break-even point and your monthly cash requirement. If the pub needs to turnover £15,000 a week just to cover rent, rates, and basic staffing, and the last year showed £14,500 average weekly sales, that’s not a viable opportunity—it’s a cash drain. The pubco won’t tell you this. You have to work it out yourself.

Assessing the Property and Location

A pub’s location and physical condition determine your ceiling for revenue and your risk of structural costs that the lease may not cover. The lease will detail what the pubco is responsible for (usually just structural), but almost everything else falls on you. So visit the property multiple times at different days and times.

Location assessment checklist:

• Count actual footfall at different hours—don’t rely on the pubco’s estimates. Spend two hours on a Wednesday afternoon and two hours on a Friday night. Note how many people walk past, how many come in.
• Assess parking availability. A pub on a high street with no parking is a big handicap, especially for food-led operations.
• Check local competition. How many other pubs are within a 10-minute walk? What’s their positioning? Are they wet-led, food-led, younger clientele, older clientele?
• Walk the neighbourhood—look at residential density, age demographics, visible affluence. A pub in a declining residential area with no student population will struggle differently than one in a growing commuter zone.
• Check transport links. Can people get there easily by bus or train? That matters more than you think for a food-led pub.

Physical property assessment:

• Have a full surveyor’s report done at your cost before you commit. The pubco’s valuation is not an independent assessment of condition.
• Check the kitchen condition and capacity. A pub serving food needs proper extraction, refrigeration, and workspace. Kitchen retrofits are expensive.
• Test the utilities. Does the heating work? Is the electrics up to modern standards? Will you need rewiring? These costs come out of your profit.
• Check what’s included in the lease—are fixtures, fittings, and equipment part of the deal or do you buy them separately? Marston’s CRP agreements typically include these, but Admiral or Punch deals vary.
• Understand the decorating schedule. When was the pub last decorated? Does the lease require you to decorate to pubco standard within a set timeframe? That’s a hidden cost.

Visit the pub at quiet times and ask the staff what actually happens. How busy are Sundays really? Do they get decent food covers at lunch? What’s the real reputation locally? Staff will tell you the truth if you ask properly—they have nothing to gain from lying. I know the Teal Farm regulars and community events drive our business as much as passing trade. The pubco’s summary didn’t capture that complexity.

Understanding the Pubco Relationship

Your pubco is both your landlord and your supply chain. If the relationship goes wrong, you have no way out without losing money. Before you sign, understand what you’re actually getting into with this specific pubco.

Key questions to ask about the pubco:

• BDM support: Will you have a dedicated Business Development Manager? How often will they visit? What do they actually do? A good BDM adds real value; a hands-off one leaves you to figure everything out. Ask to speak to existing tenants about their BDM experience—this is not a sales pitch, this is a real relationship question.
• Tie obligations: What percentage of your stock must come from the pubco? Are there exceptions for local products or craft? What margin does the pubco take on tied products versus what you’d pay free of tie? Use a retail partner earnings calculator to model the actual cost difference across a year.
• Support during audits: If the pubco conducts audits (NSF, EHO, Health & Safety), how do they support tenants? I passed my Marston’s NSF audit in March 2026, but I knew what to expect and the support was clear. Some pubcos leave tenants to figure it out alone.
• Rent review process: How is rent calculated after the first term? Is it pegged to Fair Maintainable Trade? How do you challenge a valuation if you disagree? This is critical—rent reviews can raise your rent by 20-30% if you don’t understand the formula.
• Crisis management: What happens if you have a bad trading year or a family emergency? Will they work with you on cash flow or do they immediately threaten eviction? Ask existing tenants about this—it’s the real measure of a pubco.

Do a credit check on the pubco itself. In 2026, pubco financial stability matters more than ever. If your pubco is bleeding money or under financial stress, they will squeeze tenants harder to protect their own position. Check Companies House filings, industry news, and speak to a number of tenants—not just the ones the pubco introduces to you.

Your relationship with the pubco will be the single most important factor in whether this pub succeeds or fails. You can have a perfect location with great accounts, but if the pubco is difficult, restrictive, or unsupportive, you’ll find yourself constantly fighting rather than growing. Choose your pubco as carefully as you choose the property.

Evaluating the Lease Terms and Legal Obligations

This is where you absolutely must use a solicitor who understands pub leases. The lease is written by the pubco’s legal team to protect the pubco. It is not a neutral document. Don’t sign without understanding every clause.

Critical lease terms to scrutinise:

• Rent and service charge: What exactly is included? Are there separate charges for water, waste, or services? How often are these reviewed and how much can they increase annually?
• Rent review clause: This is the biggest financial driver over 10 years. Is it pegged to Fair Maintainable Trade, RPI, or fixed escalation? How can you challenge it? Get your solicitor to model the impact on your cash flow over the full term.
• Repairing obligations: What are you responsible for? Structural repairs should be the pubco’s responsibility, but I’ve seen leases where tenants end up paying for roof repairs or facade work. This is a common trap.
• Break clauses: Can you exit the lease early? On what terms? Are there penalties? If you can’t exit and the pub fails, you’re locked in for the full term. This is serious money.
• Tie obligations: What must you buy from the pubco? Can you negotiate exceptions? The tie clause is where the pubco makes guaranteed margin on you, so read it carefully.
• Termination conditions: How does the pubco terminate the lease if you breach terms? What counts as a breach? Missing one rent payment or three? What notice do they have to give?

Your solicitor should also review the schedule of condition—the list of what the property looks like at the start of your tenancy. This protects you when you leave. If you don’t document the condition properly at the start, the pubco can claim you’ve damaged things you didn’t damage and take money from your deposit.

Ask your solicitor specifically about what qualifications or licenses you’ll need to obtain and maintain as a condition of the lease. This is usually a Personal Licence and a Premises Licence, but some pubcos add additional requirements like PEAT training.

Operational Reality Check: Can You Actually Run This?

A pub opportunity is only viable if you can actually staff and operate it with the revenue it generates and the lifestyle you’re willing to accept. This is where most prospective licensees fail in their assessment. They fall in love with the property or the location and ignore the operational reality.

Operational questions to answer honestly:

• How many staff do you need? A 180-cover operation like Teal Farm requires different staffing than a 60-cover village local. Model your labour costs realistically. The UK benchmark is 25-30% of revenue, but I’ve achieved 15% through careful scheduling and training. Don’t assume you’ll hit that without experience.
• Can you recruit locally? Visit the pub and ask staff about turnover and recruitment difficulty. In some areas, staff retention is nightmare. In others, there’s a good pool. This directly impacts your costs and stress.
• What’s your operational background? If you’ve never run a hospitality business, you’ll make mistakes the first two years that cost you money. Budget for that learning curve. If you’re taking on a food-led pub and you’ve never done catering, you’re taking a big risk. Be honest about this.
• What’s the trading pattern? Is this a lunch pub, evening pub, weekend pub, or balanced week? Each pattern requires different staffing and different skills. An event-led pub like Teal Farm with quiz nights and sports events needs staff trained for multiple roles.
• Can you live on the profit? Calculate your personal living requirement. If you need £3,000 a month to live and the pub’s profit is £2,500, you’re going backwards. The pubco doesn’t care—you’ll just work yourself ragged trying to make it work.

Before you fully commit, ask whether running a pub is right for you based on your lifestyle preferences. This isn’t just about money—it’s about whether you’re happy working 60 hours a week, managing staff drama, dealing with drunk customers, and having almost no holidays. I love it, but it’s not for everyone.

The Final Decision: Red Flags vs Acceptable Risk

Some issues are dealbreakers. Some are just normal pub business. Here’s how to tell the difference.

Walk away if you find any of these:

• The last three years of accounts show declining revenue trend and the pubco has no explanation or plan for reversal.
• The pubco won’t release accounts or won’t let you speak to existing tenants independently.
• The location has poor footfall, poor parking, and poor local demographics—you can’t fix this.
• The rent review clause ties rent to Fair Maintainable Trade with no realistic discount applied—you could face 20-30% increases every three years.
• The lease includes repairing obligations that should be the pubco’s responsibility, or penalties that are punitive.
• The pubco is in financial difficulty or has a poor reputation with existing tenants.
• You can’t calculate a viable path to making £2,000+ monthly profit for yourself in year two. If you can’t see it, don’t sign it.

Accept as normal business if you find these:

• The property needs some decoration or minor refurbishment—budget for it, but it’s not a dealbreaker.
• Labour costs in the current year were slightly higher than benchmark—staff turnover or inefficiency from the previous tenant is common.
• The tied stock costs slightly more than free of tie—that’s the trade-off for the lease, and you knew that going in.
• The pubco doesn’t offer free training—many don’t, but you can get PEAT training independently.
• You’ll need to build the customer base in year one—this is realistic. Very few pubs are full from day one under new management.

Once you’ve worked through this assessment and you’ve got solid numbers, track them in real time from day one. Your EPOS tells you what sold; Pub Command Centre tells you whether you made money—real-time labour %, VAT liability, and cash position. £97 once, no monthly fees. You need visibility into your actual performance immediately so you can course-correct if the operation isn’t hitting plan.

For more information, visit retail partner earnings calculator.

For more information, visit best pub EPOS systems guide.