Questions to ask when buying a pub
Buying a pub is a significant investment that requires careful consideration and due diligence. Asking the right questions can help you identify potential challenges, evaluate opportunities, and ensure you’re making an informed decision. Whether you’re purchasing
a freehold, leasehold, or franchised pub, this guide provides a comprehensive list of questions to ask the seller, broker, or legal advisor.
Use our advanced search bar to browse pub listings by location, type, and investment level, and find your ideal business with confidence.
1. Questions About the Pub’s Current Operations
Understanding how the pub currently operates will help you assess its potential and identify any immediate issues. Ask the following questions:
a) Financial Performance
- What is the pub’s annual turnover and net profit?
- Can you provide the last three years’ financial records?
- Are there any outstanding debts or liabilities?
- How is the business performing compared to industry benchmarks?
b) Operating Hours
- What are the current opening and closing hours?
- Are there any restrictions on operating hours due to licensing or local regulations?
c) Staffing
- How many staff members are employed, and what are their roles?
- Are there any employment contracts or pending disputes?
- Will the staff stay on after the sale?
Internal Linking: Learn more about whether you need to keep staff after buying a business.
2. Questions About the Pub’s Licensing and Legalities
Licensing is a critical aspect of running a pub. Ensure you fully understand the legal obligations and any potential issues:
a) Licensing Details
- What licenses does the pub currently hold (e.g., alcohol, food, entertainment)?
- Are the licenses transferable to a new owner?
- Are there any conditions or restrictions tied to the licenses?
b) Compliance
- Has the pub faced any compliance or licensing violations?
- Are there any ongoing legal disputes or investigations?
c) Lease or Ownership
- Is the pub freehold or leasehold?
- For leasehold pubs:
- What are the lease terms, including rent, duration, and renewal options?
- Are there any upcoming rent reviews?
- Who is responsible for maintenance and repairs?
Internal Linking: Read about selling a business without a lease to understand lease implications.
3. Questions About the Property and Premises
The condition and location of the pub significantly impact its value and potential success. Ask about:
a) Location
- What is the pub’s target market (e.g., locals, tourists, students)?
- Are there competing pubs or businesses nearby?
- How is the local demographic changing?
b) Property Condition
- When was the building last renovated or repaired?
- Are there any structural issues or maintenance needs?
- Is the kitchen and equipment in good working order?
c) Additional Features
- Does the pub have a beer garden, parking, or accommodation?
- Are there function rooms or event spaces that generate additional income?
4. Questions About Revenue Streams
Understanding how the pub generates income will help you identify growth opportunities:
a) Main Income Sources
- What percentage of revenue comes from food, drinks, and events?
- Is there an opportunity to expand the food menu or introduce new drink offerings?
b) Events and Promotions
- Does the pub host regular events, such as quiz nights or live music?
- Are there any partnerships with local organizations or breweries?
c) Opportunities for Growth
- Has the current owner explored expanding into delivery services or online reservations?
- Are there untapped revenue streams, such as catering or franchising?
Internal Linking: Explore franchise options for more ideas on expanding your business portfolio.
5. Questions About Costs and Hidden Expenses
Ensure you understand all the costs associated with buying and operating the pub:
a) Purchase Price
- What is included in the sale price (e.g., fixtures, stock, goodwill)?
- Is the price negotiable?
b) Ongoing Costs
- What are the monthly operating costs, including rent, utilities, and staff wages?
- Are there seasonal variations in operating costs or revenue?
c) Hidden Costs
- Are there any deferred maintenance costs?
- Are there additional fees for transferring licenses or leases?
Internal Linking: Read about the hidden costs of buying a business to avoid surprises.
6. Questions About Reason for Sale
Understanding why the pub is being sold can provide valuable insights into potential risks or opportunities:
a) Seller’s Motivation
- Why is the current owner selling the pub?
- Are there any challenges the current owner has struggled with?
b) Transition Plan
- Will the seller provide training or support during the transition?
- Are there any supplier or distributor relationships the new owner will need to maintain?
7. Questions About Taxes and Fees
Taxes and fees can significantly impact your investment. Ask about:
a) Tax Obligations
- What taxes will I need to pay when buying the pub (e.g., Stamp Duty)?
- Are there any outstanding tax liabilities?
b) Broker Fees
- Is the sale being handled by a broker?
- What is the broker’s fee, and who is responsible for paying it?
8. Final Steps Before Making an Offer
Before committing to the purchase, consider these final steps:
a) Conduct Due Diligence
Review all financial records, property conditions, and legal documents.
b) Seek Professional Advice
Hire a solicitor, accountant, or business advisor to guide you through the process.
c) Negotiate Terms
Work with the seller or broker to negotiate a deal that meets your needs.
Internal Linking: Check out our guide on how to structure a deal to buy a business.
Conclusion
Buying a pub is a complex process that requires thorough research and careful planning. By asking the right questions, you can minimize risks, identify opportunities, and make an informed investment. Use our platform to browse pub listings, find valuable resources, and connect with sellers to find your perfect pub.
