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What to consider before opening a pop-up

What to consider before opening a pop-up

Could a seasonal pop-up be a good way to generate new interest in your business? Amanda Hurst explains what you’ll need to consider

The problem

I have my own catering business and have always worked at conventional family functions and events, but now I’m keen to experiment with other options to generate a bit more buzz.

I considered setting up my own food shop, but overheads would prove costly. I have heard about ‘pop-up’ shops and thought my local garden centre would be an ideal location to operate a small restaurant as a trial over the summer months. But as summer is now upon us, how quickly can I start and what do I need to consider if I’m granted permission?

The law

The owner may require you to sign a formal lease, which will regulate your use of the area in the shop and ensure any changes you make are satisfactory. You will need to be aware of your rights and liabilities, especially for repairs.

The tenancy agreement is likely to be contracted outside the Landlord and Tenant Act 1954 so that you are not acquiring any rights of security of tenure and the owner will not be giving you a right to renew

You will want to include an option to break the lease and vacate the space if the business is not viable. The owner may also require an option to bring the lease to an early end if your business is affecting its own or it wishes to take on a more long-term tenant.

If applicable, will your proposed use of the space in the centre be permitted by the owner’s head lease? Consent may be required to vary the use in the operating lease.

The same rules and regulations as in any commercial environment will apply, and you will need to conduct a health and safety risk assessment and write a health and safety policy in relation to your use.

Expert advice

Costs are important, so negotiate an all-sum rent which will include rent, service charge, insurance and rates contribution. Be aware of gas and electricity costs.

If the garden centre is operating under a lease, consent may be required from a superior landlord for any alterations to the property. You will need to prepare plans and provide details of any fit-out.

Prepare a schedule of condition to evidence the current state and condition of the property to prevent you paying more to reinstate the property to a higher standard of repair.

If the area you are taking is less than 150m2, the change of planning use may be accepted by the council as a temporary flexible change of use, but you will need to notify the council.

To protect against unexpected liability costs, take out third-party liability/employer’s liability insurance.

It is assumed that the business is registered with HM Revenue and Customs and you will need to ensure that it is compliant.

To-do checklist

  • Carry out market research to see whether there is a need for your enterprise.
  • Write down your preferred terms to negotiate with the owner, including a schedule of condition, break clause and an all-inclusive rent.
  • Conduct a health and safety assessment and create a health and safety policy for your shop.
  • Prepare plans of the changes to the centre for your restaurant.
  • If you want to sell alcohol or even play music in the restaurant, you will need a licence.

Beware

Check with the owner to see if they require consent from a mortgagee. This may take time, so as soon as terms are agreed with the owner, ask them to seek the necessary approval to avoid any delays in taking up occupation.

Contact

Amanda Hurst is an associate in the real estate team at Weightmans

amanda.hurst@weightmans.com

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