Case Study 1
Journeys London Bridge Hostel
(Example of a distressed pub leaseholder who turned his business around with a Journeys Franchise)
In 2008 the Rosie O’Grady pub in the London Bridge area; was a run-down, failing business. The landlord had 19 years of a 20 year lease remaining with a rent of £18,000. The turnover of the bar was averaging £4,000 per week. With running costs approaching this figure and ever-increasing price hikes from the pub companies, grouped with the effects of the smoking ban and the downturn in the economy, they were desperately looking for a way to boost income.
Journeys at this point were in the process of identifying pubs that may be suffering from the effects mentioned and approached the landlord with our concept and business model. Negotiations were undertaken by the landlord and Journeys regarding the redundant space above the pub and Journeys recommended that it would be perfect for conversion into hostel accommodation. They were then sent the Journeys Franchise Pack, including the Journeys Building Standard Document and the Journeys Brand Standard Manual, plus information on the company and all necessary appraisal documents. After considering all the options available to them, they decided that the only way to turn the business around was to take a Journeys franchise.
They wasted no time instructing Journeys expert hostel conversion team for advice and to help with a cost plan for the works needed to convert the rooms above the pub. Journeys indicated that the sum of £125,000 would be needed to bring the upstairs rooms to the necessary level of operational standard. They managed to secure an attractive finance package for the conversion and with the aid of the Journeys project management team, who helped oversee the building works, which were concluded on time and in only 3 months.
The 2009 financial results were £298,000 of annual accommodation revenues and the landlord has increased the pub takings to £286,000 per annum. We await the 2010 figures which our systems show a further increase on 2009.
In 2008 the Rosie O’Grady pub in the London Bridge area; was a run-down, failing business. The landlord had 19 years of a 20 year lease remaining with a rent of £18,000. The turnover of the bar was averaging £4,000 per week. With running costs approaching this figure and ever-increasing price hikes from the pub companies, grouped with the effects of the smoking ban and the downturn in the economy, they were desperately looking for a way to boost income.
Journeys at this point were in the process of identifying pubs that may be suffering from the effects mentioned and approached the landlord with our concept and business model. Negotiations were undertaken by the landlord and Journeys regarding the redundant space above the pub and Journeys recommended that it would be perfect for conversion into hostel accommodation. They were then sent the Journeys Franchise Pack, including the Journeys Building Standard Document and the Journeys Brand Standard Manual, plus information on the company and all necessary appraisal documents. After considering all the options available to them, they decided that the only way to turn the business around was to take a Journeys franchise.
They wasted no time instructing Journeys expert hostel conversion team for advice and to help with a cost plan for the works needed to convert the rooms above the pub. Journeys indicated that the sum of £125,000 would be needed to bring the upstairs rooms to the necessary level of operational standard. They managed to secure an attractive finance package for the conversion and with the aid of the Journeys project management team, who helped oversee the building works, which were concluded on time and in only 3 months.
The 2009 financial results were £298,000 of annual accommodation revenues and the landlord has increased the pub takings to £286,000 per annum. We await the 2010 figures which our systems show a further increase on 2009.
Case Study 2
Journeys London Kings Cross Hostel
(Example of a freeholder taking an old building and creating a Journeys hostel and leasing it to a Franchisee)
Up until 2007, Steve Holland had enjoyed a career in commercial residential and commercial (small-scale) property development. The economic downturn left Steve with a severe problem of owning a building for which he paid £1.35million using bank debt in London Kings Cross with no income and his original plans for a small residential mixed-use scheme were left in tatters. Steve discovered the Journeys Franchise offering and sought planning permission for hostel use on his redundant site. Upon receipt of planning permission Steve spent £250k converting the building to a suitable standard to become a Journeys hostel and with their help secured a Franchisee - Dan Dennis, at a level of rent that has now enabled his building to be valued at £2.5million. Here is a real-life example of the value a Journeys hostel can add to an otherwise redundant site, even in Central London.
'I was stuck with my London property, my world had collapsed. Development funding dried up and my market had disappeared. Without discovering Journeys and the option is gave me for my site, the bank would definitely have repossessed. I can't believe I've managed to add value in such troubled times.'
Steve Holland, Development Director (D'Rui Group Ltd) Freeholder – Journeys London Kings Cross Hostel & Journeys Brighton Hostel
Up until 2007, Steve Holland had enjoyed a career in commercial residential and commercial (small-scale) property development. The economic downturn left Steve with a severe problem of owning a building for which he paid £1.35million using bank debt in London Kings Cross with no income and his original plans for a small residential mixed-use scheme were left in tatters. Steve discovered the Journeys Franchise offering and sought planning permission for hostel use on his redundant site. Upon receipt of planning permission Steve spent £250k converting the building to a suitable standard to become a Journeys hostel and with their help secured a Franchisee - Dan Dennis, at a level of rent that has now enabled his building to be valued at £2.5million. Here is a real-life example of the value a Journeys hostel can add to an otherwise redundant site, even in Central London.
'I was stuck with my London property, my world had collapsed. Development funding dried up and my market had disappeared. Without discovering Journeys and the option is gave me for my site, the bank would definitely have repossessed. I can't believe I've managed to add value in such troubled times.'
Steve Holland, Development Director (D'Rui Group Ltd) Freeholder – Journeys London Kings Cross Hostel & Journeys Brighton Hostel
Case Study 3
Journeys Brighton Hostel
(Example of a Freeholder who developed a second Journeys hostel)
Steve Holland, further to his success at Journeys London Kings Cross Hostel, London, saw the opportunity for a Journeys hostel in Brighton but needed a site. He eventually found a redundant old pub in Brighton that he paid £490k for and sought planning permission for use as a hostel, this was aided by the fact that the existing redundant pub had over the years that the rooms upstairs had been used for accommodation letting purposes. By arguing established use and getting some old customers to sign statutory declaration orders, planning was achieved. In conjunction with the Journeys Design Manual and nominated advisers, conversion of the building took place and Journeys Brighton Hostel was opened in June 2009. With the aid of Journeys, Steve Scott - the Franchisee for Journeys Brighton Hostel, was found at a rent level that has enabled the building to be revalued at £1.61million by Lambert Smith-Hampton Valuers. Steve Scott now operates the building under a Journeys Franchise and currently enjoys a substantial accommodation and food/beverage turnover resulting in good profits.
'Following on from my success at Kings Cross with Journeys, I couldn't wait to find a second building. The old 'Pressure Point' pub in Brighton afforded that opportunity and I am now looking for number three!'
Steve Holland, Development Director (D'Rui Group Ltd) Freeholder – Journeys London Kings Cross Hostel & Journeys Brighton Hostel
'My building is great, my business is great, Brighton is great, Journeys is great! Don't believe me? ...Pop down anytime and have a look around!'
Steve Scott, Franchisee – Journeys Brighton Hostel
Steve Holland, further to his success at Journeys London Kings Cross Hostel, London, saw the opportunity for a Journeys hostel in Brighton but needed a site. He eventually found a redundant old pub in Brighton that he paid £490k for and sought planning permission for use as a hostel, this was aided by the fact that the existing redundant pub had over the years that the rooms upstairs had been used for accommodation letting purposes. By arguing established use and getting some old customers to sign statutory declaration orders, planning was achieved. In conjunction with the Journeys Design Manual and nominated advisers, conversion of the building took place and Journeys Brighton Hostel was opened in June 2009. With the aid of Journeys, Steve Scott - the Franchisee for Journeys Brighton Hostel, was found at a rent level that has enabled the building to be revalued at £1.61million by Lambert Smith-Hampton Valuers. Steve Scott now operates the building under a Journeys Franchise and currently enjoys a substantial accommodation and food/beverage turnover resulting in good profits.
'Following on from my success at Kings Cross with Journeys, I couldn't wait to find a second building. The old 'Pressure Point' pub in Brighton afforded that opportunity and I am now looking for number three!'
Steve Holland, Development Director (D'Rui Group Ltd) Freeholder – Journeys London Kings Cross Hostel & Journeys Brighton Hostel
'My building is great, my business is great, Brighton is great, Journeys is great! Don't believe me? ...Pop down anytime and have a look around!'
Steve Scott, Franchisee – Journeys Brighton Hostel
Case Study 4
Journeys London Greenwich West Hostel
(Example of a leaseholder adding value and sub-leasing)
Derek Bodman saw an opportunity to purchase a 20 year lease on a very run-down back-street pub in Deptford for a very low premium with low rent and free of tie. Derek got planning permission for a hostel and refurbished the building to an acceptable Journeys standard. Journeys then helped Derek find a suitable Franchisee to sub-lease the building from him at a substantial profit rent and Ade, who has now taken the Franchise owns and operates a successful business from the location.
'Being a Journeys manager has given me the skills to manage my own business and the opportunity to meet fun loving people'
Adeola Ogunjobi , Manager – Journeys London Greenwich West
For more information, contact franchise@visitjourneys.com or call + 44 (0)207 231 4672 and we'll get right back to you.
Derek Bodman saw an opportunity to purchase a 20 year lease on a very run-down back-street pub in Deptford for a very low premium with low rent and free of tie. Derek got planning permission for a hostel and refurbished the building to an acceptable Journeys standard. Journeys then helped Derek find a suitable Franchisee to sub-lease the building from him at a substantial profit rent and Ade, who has now taken the Franchise owns and operates a successful business from the location.
'Being a Journeys manager has given me the skills to manage my own business and the opportunity to meet fun loving people'
Adeola Ogunjobi , Manager – Journeys London Greenwich West
For more information, contact franchise@visitjourneys.com or call + 44 (0)207 231 4672 and we'll get right back to you.
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