The View... How to succeed with pop-ups

26/09/2016 - 15:04
Pop-ups continue to prove popular, particularly for emerging brands looking to launch a concept and establish appeal without significant investment. Simon Mydlowski, partner at Gordons law firm, considers some of the legal issues that must be considered – and what pop-up venues must do to avoid the pitfalls.

According to Eventbrite, the number of pop-up food and drink events rose 82% in 2014 and the trend has shown no sign of letting up since. In cities all across the UK, fledgling casual dining concepts – and even more established restaurants - are riding on the street-food revolution to announce themselves via temporary events or venues. It’s an exciting trend which has already supported the growth of numerous dining concepts.

A win-win situation

There are a number of distinct advantages to pop-up food concepts, not least as a mechanism to introduce the brand to a new area, launch the concept and establish its appeal without the level of investment that would be needed for a permanent opening. Bundobust, a craft beer bar with an Indian street food kitchen, used this approach successfully to enter the market in Leeds.

We have seen many cases of landlords using pop-ups as a coaxing tool too, particularly in regenerative northern cities like Bradford and Hull, to attract casual dining concepts. There are clear benefits to both parties, with landlords offering incentives such as free rent to encourage new brands to the city.

If pop-ups are done right, they can deliver significant benefits to operators, landlords, customers and even the venue, district or city in which they operate. However, there are a number of important considerations that must be taken into account - otherwise there can be significant risk to both landlord and operator.

Potential pitfalls

Insurance and licensing arrangements are the two main areas that commonly cause problems, especially because too many pop-up operators seem unaware that the responsibility is on them.

If negligence of the operator leads to property damage, for example, it can cause issues because it may not be covered by the landlord’s buildings insurance – and both parties must be aware of this before they enter any agreement.

Employer’s Liability and Public Liability insurance must also be factored. Public liability insurance, of course, refers to insurance that will cover operators for any inconvenience they may cause a customer, such as through damage or loss of goods and damage to their property while work is being carried out. Whilst it is not a legal requirement, it is highly recommended for any small business, particularly those serving customers on premises.

Employer's liability insurance, which is a legal requirement for any employer, protects the people that work there, ensuring the operator is able to pay damages if an employee becomes injured while carrying out their work.

The fact that a brand is operating from a temporary venue does not change the requirement and operators must still ensure they have the necessary cover in place.

Finally, as the craft brewing boom continues, research from the Society of Independent Brewers shows one in three people would visit restaurants more often if they served a range of independent craft brewed beer.

Clearly there is an appetite and an opportunity for casual dining operators to drive profits with alcohol sales, but if they are operating from pop-up venues, they must not take it for granted that if a property has a premises licence, it will cover their own activities. In fact, if the licensing laws are not followed correctly, in many cases it won’t.

Speak to the local authority licensing department and take advice from a professional. It is important to make sure you are covered.

www.gordonsllp.com

Six steps to ensure success:

  1. Secure the right location: You might be opening a pop-up to introduce a new brand to a new area so make sure you know the locality. Is there already a street-food community? Who is your potential audience, for example students, foodies or corporate workers? And where are the located in relation to your pop-up?
  2. Check planning and licencing: Check whether your shop has the right planning and statutory consents to operate, for example a drinks licence if you are planning to service alcohol. Too many pop-up operators are still unaware that the responsibility is on them.
  3. Consider fit out: Calculate what will be the cost of fit-out and see what the landlord will do to incentivise you. It is easy to get carried away but remember this is only likely to be a temporary venue – and the landlord will often be keen to incentive in order to fill the space.
  4. Maximise exposure: As a new, temporary venue it’s more important than ever to market yourself well. Use social media to drive the enterprise and reach out to other businesses in the area.
  5. Confirm resource: Arrange staff contacts carefully so they are dynamic and can work within the needs of the business. Remember they will be representing your brand to a new audience.
  6. Look carefully at insurance: Being a temporary venue does not change the requirement for insurances such as Public Liability and Employer’s Liability. Make sure your policies are adequate for your requirements.  

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