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The Mag on LL


nonold

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Mark Dodds posted this on the Cherry Tree thread (29 October):


"Someone above recommended to Chris and Antonia that the Magdala/Magnolia is for sale and they ought to take that on. That is an action NoT To BE Recommended: It's an Enterprise Inns tied lease. Any more info wanted about this toxic kind of leasehold - message me or ask Jamie at the Palmerston. They bought their freehold from Enterprise and have a lot of experience of that company's behaviour."


ETA: I don't know how to link to a single post, or even if it's possible to do that, but it's on this page:


http://www.eastdulwichforum.co.uk/forum/read.php?30,987030

nonold Wrote:

-------------------------------------------------------

> The decision on who will take over the Mag is

> being taken later this week. There are 3

> candidates, 2 chains and myself, an ED resident!!


xxxxxx


Are you able to divulge which chains, if you know? Or is that confidential information?

rahrahrah Wrote:

-------------------------------------------------------

> I have no information, but would guess that Youngs

> might be one of them.... Based only on thier

> apparently relentless mission too spread bland

> overpriced identikit pubs all over south london.

> Hope not though.



Xxxxxx



Hope not too, I don't like their ale much: (

Briefly - if it's the lease, rather than the freehold which is being taken on at Magnoliadala then it's extremely unlikely to be Young's or any other 'brewer' or pubco - they will not sign up to being fleeced by the terms of the beer tie and a fully repairing and insuring lease with Enterprise Inns. i.e. they are not stupid, gullible, inexperienced or naive enough to buy a dead cert loser.


There are some circumstances when taking on a tied lease will not lead to financial ruin but ONLY if it is sold on before the lease terms, the poor condition of the building and and the onerous beer prices catch up with you and squeeze you dry. I advise anyone interested in any tied lease, anywhere, to STOP, do some serious research, be alarmed at what you find, then walk away.

I assume that the tied lease means a high rental cost, and an agreement whereby booze must be bought from the landlord at set prices so the pub operator doesn't have the freedom to seek cheaper suppliers.


http://www.caterersearch.com/Articles/26/03/2010/332831/buying-a-pub-going-public.htm


If Enterprise Inns is known to be a problematic landlord would this imply that the current owner of the Mag signed up to something that effectively makes the landlord rich, doesn't do himself any favours, and ends up in a situation where the pub closes through lack of profit?


Any more info as to what in the lease makes running the pub so difficult? Unpleasant rent rises? Complex calculations for pricing?


Charlie

Do you have a business plan? I understand the rent is about ?40000 pa so you have to show ?769 a week profit just to pay the rent before you can take anything out of the business, is that right? Plus heating that great big space, business rates, water, electricity, music sub, 5 staff I think they had for the restaurant when that was open, bar staff, cleaning, building maintenance....what would the turnover have to be to make any kind of a profit? There's a three bed flat upstairs but the only way in is through the pub, which is not exactly ideal.
hi there, of course I have a biz plan, and yes, I am aware of the cost implications re staffing, rates, etc....The flat is not meant to provide rental income, but is really geared for staff accomodation. If you have a proper interest, I am more than happy to show you the plan!

"My gut feeling is that the pub is just too big, given it's location away from the main "drag"."


That?s probably true


I still like to think there is room for someone with a bit of different thinking to so something with it


A proper sports bar (like Champs, in Eccy Road in Sheffield) would get people in I say


I think Capital pubs model is saturated in the area but given their track record it seems reasonable to suggest they would make it work better


Otherwise, and I?m no chain fan, I can see something like a Pizza Express working in a space like that (with a knock on benefit of creating more footfall between, say House of Tippler and Franklins)

Sky Sports and Pizzas will not Resurrect to 'Mag' nolia or dala..


The interia is distressed and requires a lot of work to make it appealing.


It is geographically disadvantaged.


Was ok when there was less/no competition.


Cannot see it being the peoples choice for those from outside E.D.

and could not survive relying on Local Trade.


Has not done so for a while now.


Certainly not a victim of it's own success by any means.


It would seem to me to be Hugh Finacial risk to take it on.

Cannot see any other use for the building in it's current form.


Fox.

I was assuming there would be a redecoration of some sort.

I think there is definately a gap in the market, - if done well - for a pub to succeed in its location, but i'm adamant sky sports would have to be shown.

I think the Mag probably suffers from the Great Exhibition, taking customers from the 'top end' of LL.

I think another Gastro pub..or restaurant would fail....it needs something different to pull in the customers...but I'm no expert, just giving a humble opinion.

The previous Mag did seem to pull in the customers quite a lot.

  • 1 month later...

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