Franchise vs Joint Venture
Hospitality Management 21 (2002) 353–369
A franchise by any other name? Tenancy arrangements in the pub sector
Conrad Lashley*, Bill Rowson
School of Tourism and Hospitality Management, Leeds Metropolitan University, Calverley Street,
Leeds LS1 3HJ, UK
Abstract
Recent changes in ownership and consumption patterns within the market have brought many operators to follow strategies that are more concerned with a retailing orientation.
Many of the companies operating pubs are aiming to grow sales, and respond quickly to changes in consumer tastes and fashions. They no longer own brewing facilities and frequently control whole estates of the pubs that are marginal, and where the actions, skills and motivations of local unit managers are crucial for the success or failure of the property. The exploration of different forms of indirect control via tenancy and lease arrangements is recognition of the need to provide more entrepreneurial incentives for those managing these more marginal properties. In many ways, it is possible to view pubs owned by chains operated through both tenancies and leasing as a form of franchising. Certainly the literature and research of franchising hospitality services can help inform a study of leasehold and tenanted relationships in licensed retailing. Franchising in licensed retailing is almost wholly based on the tenanted/leased agreements, which stem from the ‘tie’. This paper argues that in the more retailing and service quality competitive environment pub operating companies will need to use more traditional franchising approaches than have been practised in the past. r 2002
Elsevier Science Ltd. All rights reserved.
Keywords: Franchising; Licensed retailing; Agency theory; Resource scarcity theory
1. Introduction
Pub ownership and control has long been an unusual feature of the English and
Welsh ‘bar trade’ when compared with other countries. Licensing laws and the increasing concentration of the brewing
A franchise by any other name? Tenancy arrangements in the pub sector
Conrad Lashley*, Bill Rowson
School of Tourism and Hospitality Management, Leeds Metropolitan University, Calverley Street,
Leeds LS1 3HJ, UK
Abstract
Recent changes in ownership and consumption patterns within the market have brought many operators to follow strategies that are more concerned with a retailing orientation.
Many of the companies operating pubs are aiming to grow sales, and respond quickly to changes in consumer tastes and fashions. They no longer own brewing facilities and frequently control whole estates of the pubs that are marginal, and where the actions, skills and motivations of local unit managers are crucial for the success or failure of the property. The exploration of different forms of indirect control via tenancy and lease arrangements is recognition of the need to provide more entrepreneurial incentives for those managing these more marginal properties. In many ways, it is possible to view pubs owned by chains operated through both tenancies and leasing as a form of franchising. Certainly the literature and research of franchising hospitality services can help inform a study of leasehold and tenanted relationships in licensed retailing. Franchising in licensed retailing is almost wholly based on the tenanted/leased agreements, which stem from the ‘tie’. This paper argues that in the more retailing and service quality competitive environment pub operating companies will need to use more traditional franchising approaches than have been practised in the past. r 2002
Elsevier Science Ltd. All rights reserved.
Keywords: Franchising; Licensed retailing; Agency theory; Resource scarcity theory
1. Introduction
Pub ownership and control has long been an unusual feature of the English and
Welsh ‘bar trade’ when compared with other countries. Licensing laws and the increasing concentration of the brewing
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