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MD: Independents don’t have access to capital.


TK: The challenges are getting worse by the month – the Living Wage, and rent is going up.


What do you need to consider when looking at sites? SR: We are investing in new-build leisure parks and retail. It is a big phenomenon in the UK.


JM: If tenants are being asked to pay a pre- mium at the start of a lease then they have less capital to invest in their business. It is a short-term gain for landlords as you get cash up front, but you may not have a tenant in five years’ time.


TK: Remember the days of 20 to 25-year leases? Now they try to give you five or seven years with so many options it’s almost a licence.


MD: The nature of the market is that we pay a huge amount of rent.


situation where one outlet determines rent.


TK: It is hard to compete. In some sites, if a res- taurant brand comes in next door and can pay more, they put our rent up. And if you can’t afford it, somebody comes along who can.


Brandon Stephens (BS): There shouldn’t be a 10 | Insight Report


JM: Are freeholds outside London out of the question?


MD: The process of using covenants means you lose flexibility. We did freeholds and then


SR: Non-traditional banks are coming into the UK with names you have never heard of offering fixed-term amounts. You don’t have to go to RBS. The demise of RBS took 30% of lending out, but that gap has been filled by these new guys. They can finance big business.


www.thecaterer.com


“The headache of managing drivers means companies such as Deliveroo are making a killing out of the delivery business. As restaurateurs, we don’t know how to manage drivers, insurance and so on” Tony Kitous


flipped to sale and leaseback. One site could make you £250,000, so if you get that in the mix it is helpful.


What about finance? Half the respondents in the research saw bank loans as the preferred route. Do you think a shift in the way restaurants raise money – such as online crowdfunding – could help? JY: Crowdfunding is only good for certain styles of business in a certain market.


SR: Enterprise Investment Schemes are a good tool for smaller companies.


BS: Or the Seed Enterprise Investment Scheme, which offers tax-efficient benefits to investors in return for investments in small and early start-up businesses.


JM: Yes, it is off-the-shelf now and easy to access.





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