6 Tips to Help You Negotiate a Pop-Up Shop Lease
Birchbox, now with its own permanent home, is just one example of a business that began its life by launching pop-up shops. Here’s how you can best set up yours.
By Rachel Fischbein (Founder, Law On The Runway) and Olga V. Mack (Startup Lawyer)
Pop-up shops — temporarily renting a commercial space — have become a popular way for startups with consumer-facing products to show off their wares and to test the market before committing to a long term retail space. It can be a highly successful strategy: This is exactly the route that businesses like Birchbox have taken.
Many pop-up shops include a social element, such as a party to celebrate the launch of a new line and spread the word.
But you need to ensure you’ve ticked off all the practical and legal requirements first. Here are a few topics to discuss with the space owner to ensure that your needs, and theirs, are met:
1. Term of Rental
The first step is to plan out your timeline for the project. How long will you need the space for you event? Remember to budget in the time you’ll need for set-up and take-down of your shop.
2. Fixtures and Utilities
Visit the site prior to your agreement. Notice the lighting and the fixtures, such as shelving and racks. Be sure to ask the space owner and memorialize in an agreement if you can use the existing fixtures, if there are any additional ones available in the space or if you or owner can alter or remove the ones present.
Next, clarify who is paying for the basics: water, trash and electricity. Also consider inquiring into Internet connectivity to ensure an uninterrupted online presence while you’re operating the shop. It could even be worth bringing in a pop-up architect to help you think about effectively designing the space and maximizing the visibility of products.
3. Keys and Security
Your valuable assets will be displayed in the store, regardless of whether you are present or not. Be sure to ask about the security systems in place within the space and check who has access to the property.
Consider requesting to install a temporary safe or locker to protect financial documents, electronics or any other valuables you may have on site. Hiring security personnel may also make sense. If so, ask the space owner for a recommendation and, if appropriate, whether you might split the costs.
4. Alcohol, Food and Noise
If you are hosting an event (e.g. a launch party), consider the restrictions specified in the agreement and local ordinances. If applicable, inquire as to whether the space has any restrictions with regard to alcohol or food.
Seek competent legal help to decide whether you may serve, distribute or sell alcohol at your event on the premises and whether your event complies with curfew and noise regulation ordinances. The last thing you want is to alienate the locals!
5. Marketing and Signage
As you do a walk-through of the space, consider where you’d like promotional material or signs to be placed within the space, or outside of the building. Ask the property owner about ways to hang or mount signs and if you are allowed to place marketing materials on the window.
If the space routinely attracts your target market, you may want to ask if you could have handouts inside of the space before the event or signs promoting the event itself.
Finally, seek competent legal help to decide whether you comply with local signage restrictions.
6. Cleanup and Housekeeping
Ask about and note down any housekeeping or cleaning needs you may have. If the event is for a very short time, such as one night or just a few days, be sure to factor in cleaning both prior to and after the event.
If your shop tenancy will last longer, say a month, negotiate with the owner about weekly housekeeping services. Additionally, clarify your departure cleaning obligations and budget both time and money for the cleaning requirements.
Authors’ note: This article is for informational purposes only and no attorney/client relationship is formed by/through this article. It is not legal advice.