Commercial lease renewals are governed by the Landlord and Tenant Act 1954 “LTA”.

You should always ensure your lease is easily accessible. You need to review your lease regularly and understand your rights and obligations, especially where the lease is to end in the near future or where you are thinking of selling your pharmacy.

Is your lease “contracted out” of the LTA? This is important to check as if it is you may not have a right of renewal.

Have you been served with a notice by your landlord or do you need to serve a notice under the LTA? If you want to renew and you have the statutory right to do so, there are different procedures to follow depending on whether you or your landlord initiates renewal. This is a specialist area with potentially severe consequences so professional advice should be taken.

There are circumstances where a lease comes to an end and the landlord can refuse an application to renew the lease. If you apply to your landlord to renew your lease and the landlord says no or you receive a notice telling you your lease will not be renewed you must take professional advice immediately, especially on whether or not you have an entitlement to compensation.

Lenders often require leases of a certain length so be aware of the impact the length and terms of your lease could have on a potential sale.

Work with the pharmacy specialists

All of this may seem like a lot of work but Pharmacy Seekers can assist you with many of these tasks.If you would like to have an initial consultation with one of our specialists please give Andy or Robert a call on 0800 195 7518 or e-mail arh@pharmacyseekers.com or rdm@pharmacyseekers.com.

Unlike most other commercial businesses, selling a community pharmacy has a further workstream in addition to the legal contracts to sell your pharmacy.

Your lawyers sort out all the legal contracts to sell your business and the associated transfers of leases/ sale of freeholds, etc but in addition the owners of Community Pharmacies face another obstacle before they can complete the sales process.

Every pharmacy has a contract with the NHS to provide pharmacy services and this needs to be transferred to the prospective new owners on the day that a pharmacy sale completes.

If you are selling a company then there is usually no issue if the NHS pharmacy contract is in the companys name. The NHS contract transfers with the share sale and stays within the company, so no Change of Ownership as far as the NHS is concerned.

Therefore on a share sale the transaction can complete very quickly after exchange of legal contracts to sell the company to its new owners. If the new owners wish to move the NHS Pharmacy Contract to another of their companies post acquisition that is no concern of the previous owners.

If the pharmacy contract is in a personal name or is being sold out of a company to another entity, then the prospective new owners have to apply to the NHS to transfer the Pharmacy Contract into the new owners company/ name.

Although the forms are filled in and submitted by the new owners to Primary Care Support England (PCSE) , the existing owner does need to sign the application as well. It is well worthwhile checking that the application is correctly filled in and has the necessary attachments such as plans and crucially that the relevant fee is paid by the prospective new owners.

The new owners may also have to submit Fitness to Practice forms (FtP) at the same time as the Change of Ownership forms, if they do not already have FtP in the NHS England area the pharmacy is located in. Something else to make sure happens.

PCSE will check they have all the necessary information and then send the information to the local NHS England commissioning body who will circulate the application to all local pharmacies and the local LPC for comment.

Assuming that the application for change of ownership is approved (and this can take 3-4 months or even longer from submission of the application) an approval letter will be issued to the applicants and the existing owner. There is then a 30 day period when other local contractors could appeal against the decision on the grounds that the new owners are not fit and proper persons but that is very, very rare.

After the 30 day appeal period the new owners then have to submit the Notice of Commencement letter they have been sent by the NHS stating the date on which the actual change of ownership will occur. This has to be at least 30 days notice.

When both the seller and buyer have a definite transfer date of the NHS Pharmacy Contract confirmed, then their respective lawyers can plan to legally complete the business sale and property matters all at the same time.

Therefore as you can see from the above process, the NHS Change of Ownership process can significantly extend the completion of the sale of a pharmacy by at least 5-6 months if not longer.

It is therefore always sensible to plan in and agree when the Change of Ownership forms should be submitted at the earliest opportunity.

At completion the GPhC also needs to be notified about any change of Superintendent Pharmacist and for the Register of Premises to be updated with the new owners details.

Work with the pharmacy specialists

All of this may seem like a lot of work but Pharmacy Seekers can assist you with many of these tasks. You will want the best price for your pharmacy and preparation is the key to promoting and subsequently selling your pharmacy.

If you need some informal advice now about selling your pharmacy contact steve@pharmacyseekers.com or chris@pharmacyseekers.com

You’ve made the decision to sell your pharmacy and you have appointed your sales agent.

Between you all the background information that will be needed by any prospective purchaser to assess your business has been prepared and stored in the sales agents data-room.

At Pharmacy Seekers we prepare a draft Sales Information Memorandum (IM)that sums up all the necessary information to attract a buyer. Headline financials, summary staffing details, description of how the business is run and what growth opportunities would be possible for new owners, a breakdown of the NHS income streams, OTC Sales and details of local competitors and GP surgeries.

This will include the location if not a confidential sale, if confidential a high level summary document is prepared to give enough information to enable a buyer to sign a Non Disclosure agreement (NDA) before receiving the full Sales IM.

Only when you are happy with the format is the Sales IM finalised and ready for distribution.

Now your chosen Sales Agent can market the pharmacy to prospective buyers via a mix of their database of known active buyers and potential first time buyers, their website, Social Media forums and crucially the local contacts that your agent will have with existing pharmacy groups and investors who wish to grow their pharmacy businesses.

Your sales agent needs the experience and skill sets to be able to show off your pharmacy in its best light but also be honest and realistic with prospective buyers.

Understanding what the prospective buyer wants to do with the business and the finance they have available is key to progressing the sales process.

Your sales agent needs to understand your business as well as you do to be able to attract the best possible offers, so the decades of experience in the pharmacy sector that the directors of Pharmacy Seekers have can directly benefit you.

Going to market is an exciting and sometimes stressful time for you as the pharmacy owner but your sales agent can smooth the process and work with you to achieve the best possible offers in a reasonable timeframe.

Work with the pharmacy specialists

All of this may seem like a lot of work but Pharmacy Seekers can assist you with many of these tasks. You will want the best price for your pharmacy and preparation is the key to promoting and subsequently selling your pharmacy.

If you need some informal advice now about selling your pharmacy contact steve@pharmacyseekers.com or chris@pharmacyseekers.com

When you have taken the decision to sell your pharmacy there are a number of things that need to done to ensure that your pharmacy shows itself in the best possible light. You’ll want to make sure you get a fair return on investment for your effort during your period of ownership. Here are our the first steps when preparing your pharmacy for sale and a list of what you’ll need to pull together for your sales agent.

Preparing your pharmacy

Selling a pharmacy is a little like selling a house so if you’ve done that it won’t be as daunting as you might think.  Are there minor repairs that need to be done  e.g. painting the shop front, improving the lighting or sorting out that rickety shelving, that won’t cost the earth but make the pharmacy look its best? Look at everything because potential buyers will and everything will effect their impression they get and the value they assign to your pharmacy.

Again, just like selling a house, keep your pharmacy de-cluttered with all the retail space well stocked and the shelves faced up and then take some photographs that you can subsequently share with your chosen sales agent. It is particularly important to take good photographs of the areas of the pharmacy that cannot be seen by the public e.g. The dispensary and stock rooms. Take the time to produce high quality photographs. They can really help buyers visualise the pharmacy and catch the eye.

Your sales agent can of course arrange for photos, or better still, a video to be taken, but if you already have them ready its saves time and stops you alerting your staff that the pharmacy is being prepared for sale at a very early stage if that is important to you. (The subject of a future article).

It’s a good idea to have friend to look around before taking the photos as you often overlook that untidy pile of invoices in the corner of the dispensary because you see them every day!

Check that your NHS Choices listing is correct for the opening hours and services. Ensure that you have responded in full to any patient reviews. Your prospective buyers will look at your entry and take note of any comments about the levels of service. It is possible to report vexatious patient reviews and get them removed from the website if you can prove that the review is incorrect.

Don’t forget that potential buyers may well look at your digital presence as well. It is one of the first places people will look. Take a look at your website and social media channels if you have them and decide if they need tidying up as well.

Preparing the sales pack

Then it’s a process of collating all the paperwork and figures you will need for prospective buyers to appraise your pharmacy’s financials, etc.

You will need to pass on to your sales agent;

The last three years accounts from your accountant. If you are selling one pharmacy out of a small group then the last three management accounts for the pharmacy you are selling out of the group. Your accountant should be able to provide electronic copies.

Your last 12 months monthly NHS Statements.  If you access them electronically then that is great and avoids lots of scanning documents.

Does your pharmacy dispense to any Care Homes or patients based in their own homes who use monitored dosage systems and if so how many patients/ monthly items and what system is used.

A copy of your lease or the last valuation of your freehold property. Please take tax advice from your accountant of you intend to keep the freehold and set up a new lease. Your sales agent can arrange for a suitable freehold valuation if required.

A list of the professional services your pharmacy provides both NHS and Private.

Your monthly OTC retail sales excluding VAT and NHS levies.

If you have any retail accounts please list the approx. income and any discounts given.

If you have a plan of your pharmacy from the last time it was refitted that would be of great assistance.

What dispensary computer system do you use and what are the leasing/ maintenance costs? Provide a copy of the leasing agreement.

Is you delivery vehicle leased or owned and please provide a service record along with an estimate of weekly delivery numbers.

A list of your staff (just job titles, not names) with their hourly rates, Hours worked per week and the level of their pharmacy qualification along with length of service and benefits (holiday entitlement, pension, bonus payments).

Any other information that you think is pertinent to the sale of your pharmacy. Your pharmacy is unique to you and your staff and you know it better than anyone else. A good Sales Agent will ask you all sorts of questions to tease this information out of you but prepare in advance.

Work with the pharmacy specialists

All of this may seem like a lot of work but Pharmacy Seekers can assist you with many of these tasks. You will want the best price for your pharmacy and preparation is the key to promoting and subsequently selling your pharmacy.

If you need some informal advice now about selling your pharmacy contact steve@pharmacyseekers.com or chris@pharmacyseekers.com

Community pharmacy is a complex business. There are many important considerations to analyse before buying a pharmacy. The Pharmacy market is experiencing many internal and external changes and knowing the key steps involved in purchasing a pharmacy and having the right support during the process is key.

You may be a first-time buyer looking to take advantage of opportunities opening up with changes to contractual arrangements and eager to make a start. Buying the right pharmacy which reflects your intended business model is arguably the most important step in your journey as a pharmacy contractor. With what is a very detailed process it is useful to have the right advisors by your side to ensure you don’t make a mistake.

If you are already a pharmacy contractor and have a business to run you may be aware of many of the nuances of buying a pharmacy but pressed for time to manage the minutiae. The right advisors can take some of the pressure and support you to make strategic acquisitions that will grow the value of your portfolio.

Your road map to buying a pharmacy

Whether first time buyer or empire builder our road map to buying a pharmacy is a useful guide to the step by step process of buying a pharmacy, the key people and organisations involved and the order in which everything should happen.

Starting with finding and assessing the right pharmacy, moving onto sourcing funds, building a business plan and beyond our road map will help you to understand the whole journey, essential if you are to make the right decisions as you proceed.

Feel free to download your copy of our roadmap to buying a pharmacy.

Download now

We regularly write and publish new and unique advice and insight into more detailed aspects of the process. Sign up to receive updates direct into your inbox.

Subscribe

Pharmacy Seekers  – Experienced pharmacy professionals to support your pharmacy purchase

To help you succeed at each step of the road map our team at Pharmacy Seekers have unparalleled experience over decades, working in operational, financial, developmental and leadership roles within the pharmacy profession.

We provide a supported purchasing process

We provide end to end support – from decision to purchase to completion

You will receive director level contact and assistance throughout

We are the pharmacy specialists and don’t get distracted with work in other sectors

We can help you prepare your business plan and financial application for funding

We have an extensive associate network to assist with developing your pharmacy

If you need some informal advice now about buying a pharmacy contact steve@pharmacyseekers.com or chris@pharmacyseekers.com