Pub companies often use a tenancy at will or short agreement to allow a tenant to begin running a pub while a longer-term agreement is negotiated. This can be a valuable opportunity for both parties to assess the business relationship and can serve as a stepping stone for new operators entering the trade.
However, for this arrangement to be successful, it is essential that the operator gets off to the right start. To support tenants on short agreements, pub companies regulated under the Pubs Code have collaborated with the Pubs Code Adjudicator (PCA) to establish a consistent set of minimum standards. These standards aim to provide clarity and fairness to tenants while ensuring best practices are upheld by pub companies.
Key Considerations for Tenants on Short Agreements
Most rights under the Pubs Code do not apply to tenants on short agreements. However, tenants entering into such an agreement are entitled to certain protections, including:
- Rights to certain information from their pub company.
- Advice recommending that they complete pubs entry training, unless they already have relevant business experience.
- A clear understanding that investing personal funds into the pub is not advisable, as these agreements can be terminated at short notice.
A short agreement under the Pubs Code is defined as a tied agreement (where the tenant is required to buy products from the pub company) that entitles the tenant to occupy the pub for less than 12 months.
Why These Standards Matter
Fiona Dickie, the Pubs Code Adjudicator, emphasised the importance of fairness for tenants on short agreements, stating: "Everyone wants tied tenants to do well, and getting off to a strong start is essential. Those on tenancies at will and other short agreements are entitled to be treated fairly. It is particularly important that they should be advised not to invest their own money in the pub when on agreements which can be terminated at short notice. I’m pleased that the regulated pub companies have agreed to a consistent set of minimum standards to reflect their business practices over and above what the Pubs Code requires them to do. This should help tied tenants to understand what they can expect from their relationship with them."
The newly established minimum standards provide greater transparency and fairness for tenants entering into short agreements. By clearly outlining expectations and reinforcing best practices, these measures help to create a more supportive environment for pub tenants and strengthen their business prospects.
Where to Find More Information
The full Short Agreements - Minimum Standards (March 2025) document is available on the GOV.UK website. Tenants considering a short agreement are encouraged to review these standards to better understand their rights and responsibilities in their business relationship with pub companies.
By implementing these standards, the industry takes an important step toward fostering fairness, sustainability, and long-term success for tenants in the pub sector.
See: https://www.gov.uk/government/news/pub-owning-businesses-agree-minimum-standards-for-tenants-on-short-agreements