Renting Your Own Hard Work
Here is the biggest lie in the industry: “The rent is based on the property.”
In reality, if you are a good operator, the Pub Company tries to base the rent on you. You work 80 hours a week. You build a great reputation. You put on amazing food. And when the rent review comes, the BDM says: “Wow, turnover is up! That means the property is worth more. Rent goes up.”
This is called Goodwill Theft. They are charging you rent on your own success. They inflate the “Fair Maintainable Trade” (FMT) to match your actual trade, ignoring the fact that an average tenant would make half as much money.
If you don’t calculate your own Shadow Rent (the true market value of the empty shell), you will spend the next 5 years paying for your own sweat.
The FMT Reality Checker
Are you paying rent on “Phantom Beer”?
The PubCo “Round Up” Effect (10%)
Your Extra Rent Liability Per Year
£5,184
Based on standard 50% divisible balance split
Over a 5-year lease, this costs you £25,920.
Don’t let them guess your numbers.
Calculate Your Exact Shadow Rent Now →*Estimates based on standard industry margins. Use Pubs Code Guardian for a certified report.
The Fix: 3 Methods to Find the Real Number
1. The “Turnover Percentage” Rule (The Guess)
You look at industry benchmarks (e.g., 10% of net turnover).
- The Flaw: It’s too blunt. A wet-led boozer in Newcastle has totally different margins to a gastropub in Surrey. The PubCo will tear this argument apart in seconds.
2. The Full RICS Valuation (The Pro)
You hire a Chartered Surveyor to do a “profits method” valuation.
- The Flaw: It costs £3,000+. And even then, it’s just one person’s opinion against another.
3. The “Shadow Surveyor” (The AI)
You use Pubs Code Guardian. It uses the exact same formula as the RICS surveyors (The Profits Method) but removes the human bias (and the bill). It calculates:
- Gross Profit (adjusted for fair market prices, not tied prices).
- Operational Costs (staff, utilities, rates).
- Divisible Balance (the pot of money left over).
- Tenant’s Share vs. Landlord’s Share (typically 50/50).
The Winner: Pubs Code Guardian
The Shadow Surveyor feature allows you to run this calculation 50 times if you want.
- Change the beer price. See what happens to the rent.
- Change the staff wages. See what happens to the rent.
- Change the barrelage. See what happens to the rent.
It gives you the “Ammo” to say: “No, Mr. BDM. You have overestimated the barrelage by 20%. Here is the data.”
Run Your Shadow Rent Calculation Now
The Math: The “Divisible Balance” Hack
Let’s look at the numbers.
- Turnover: £500,000.
- Gross Profit (45%): £225,000.
- Costs (Staff/Bills/Rates): £150,000.
- Divisible Balance (Profit before Rent): £75,000.
The PubCo View: “We want £45,000 rent.” (Leaving you with £30,000). The Shadow Surveyor View: “Market standard is a 50/50 split. Rent should be £37,500.”
The Saving: £7,500 per year. Over a 5-year lease = £37,500.
Cost of Tool: £29/month. ROI: Infinite.
Stop paying rent on your own hard work.