What is a Free of Tie Tenancy or Lease?
To understand this, firstly we will briefly explain a tied lease or tenancy agreement. Under a tied agreement, your landlord will have the facility to earn income from the goods you sell under your tie agreement. The agreement varies from company to company, some operating a full tie for all wet sales products, others a partial tie for say draught and bottled beers and ciders only. In the case of a brewery being your landlord, they produce the goods, and sell it to you at a wholesale price. A pub operator will have a trade agreement with a brewer or supplier, using their purchasing power to buy it cheaper than you as an individual could, and again selling it to you at a wholesale price.
As opposed to the tied leases and tenancies, there are occasions where a landlord, normally a private landlord, who has no interest in the beer sales side of the business operation, will free you from any such trading conditions. Some operators prefer this kind of business, being in total control of the negotiations and product line they sell in their premises.
You will normally pay a higher rent for this kind of agreement, as your landlord has only one source of income from the property, as opposed to the landlords who also earn income from beer sales under a tied agreement, and can therefore afford to offer you the premises at a lower rent figure.
|Tenancy||New issue Leases||Assignable Leases||Free of Tie||Freeholds|