Pop up shops have been around for some time, however, they have become increasingly popular in a COVID-19 world. 

Business owners can reach customers physically by setting up a short-term store without the need  to commit themselves to that particular spot for an extended period of time. As a result, pop up stores have become a great alternative for business owners. 

A pop up store is only around for a limited period of time. Often, owners of online businesses use this medium to promote their business. 

In this article, we’ll explore pop up stores and what you will need if you want to set one up. 

What Is A Pop Up Store?

A pop up store is a temporary retail outlet. The store is physically available for customers for a limited period of time. Businesses often do this to interact with their customers face to face, test a location before committing to it or to simply market their products. 

Example
Jenny sells homemade jams online. In order to get more people to notice her brand, Jenny decides to rent a space for a pop up store at her local farmers market.

During her time there, she displayed her jams and gave out free samples, allowing people to see, smell and taste her products before purchasing them. 

Why Do People Set Up Pop Up Stores?

There are a number of benefits to setting up pop up stores, particularly for eCommerce business owners

As with anything else, there are also some downsides. It’s best to weigh them both and decide whether or not a pop up store is right for your business. 

ProsCons
It gives customers a chance to experience your items in person, tangibly. The temporary nature of it may put customers off from committing to your products, particularly if you’re selling something customers may want to purchase on repeat such as beauty products.
Your business can see how it does in a physical space prior to fully committing to one.
Getting the location right is crucial, as a poor location choice will not attract customers and make your business activities futile. 
A pop up store is great for marketing – getting your products out to the world in a public setting can help boost your brand’s awareness. There is a limited amount of space available which will impact the amount of stock that can be kept and any activities you may wish to engage in. 

Is It A Temporary Business?

A pop up store is generally not a temporary business. It’s simply a flash retail of an ongoing, full time business. 

However, if you do have a product that you would like to sell occasionally (rather than permanently), it can be considered a ‘temporary business’. To do this, you would still need all the relevant licences, permissions and registrations of a standard business. 

How Do I Set Up A Pop Up Store?

Despite the temporary nature of a pop up store, it still requires a lot of thought and planning. In order to stay on top of it, make sure you’ve made arrangements regarding these key factors: 

  • Researching the market and setting aside a budget for the pop up store 
  • Select a location to operate the pop up store from
  • Consider the type of location (mobile truck, gallery, mall store, stall at an event) 
  • Secure any contracts and rental agreements
  • Make a plan for the design and decor of your pop up store
  • Market the pop up store so other know about it 

Are Pop Up Shops Worth It?

It really depends – there’s no general rule for whether a pop up shop is worth it. For some businesses, it’s a great marketing tool. For others, it doesn’t do much to boost their sales and the set up costs, time and resources prove to be too much of a hassle. 

The answer to this is contingent on your business’ individual circumstances, goals, finances and the target market. 

Do I Need A Lease For Pop Up Stores?

According to the Retail Lease Act 1994 (NSW),  if the lease is for less than six months, you do not need a traditional rental contract. However, we strongly recommend getting a short term rental agreement in writing between you and the landlord regardless of the duration. 

Without a Lease Agreement in place, the usual obligations a landlord would have towards their tenants are waived. This could put you and your business in a more vulnerable position. 

Therefore, it’s important to sign with a landlord that is able to agree to a written agreement or consider looking for another space that is more accommodating. 

How Does Liability Work?

Liability refers to your legal responsibility. If something goes wrong (for example, there is damage or an injury), someone needs to be responsible and accountable. 

When you’re running a physical store, even if it only is temporary, you become liable for a range of things (for example, a customer getting injured due to a damaged floorboard). 

A short-term rental agreement should distinguish the liabilities and responsibilities of both parties to prevent a dispute from occurring. Furthermore, you don’t want to end up paying for the negligence of another. Be prepared in advance and ensure your short-term rental agreement reflects and addresses these concerns. 

What Should I Include In My Lease Agreement?

Primarily, your Lease Agreement should specify the agreement is a short term contract. It’s better to be detailed regarding the exact amount of time the lease is valid for. 

In addition to this, the agreement should also include other important matters such as: 

  • The rent amount and payment method
  • The location and exact space 
  • Contract termination 
  • Dispute resolution and liabilities
  • Amenities, utilities and bills 
  • Operating hours and noise levels 
  • Disclosing what the rental space will be used for

What Should I Know About Zoning Laws?

Zoning laws impact what activities can and cannot be done in particular areas. Not all regions are permitted to have commercial use, therefore, it’s important to see whether or not the location you are interested in setting up your pop up shop allows a business to operate from there. 

For example, some residential areas require permission for certain types of businesses to operate there. 

Zoning can be determined by looking at the Local Environment Plan for the area you’re interested in renting in. 

What Else Should I Consider?

When setting up a pop up store, there are a multitude of decisions that will impact how you go about operating the store. We’ve listed some key considerations below. 

Location

As we’ve mentioned above, the location is one of the key deciding factors on the success of your pop up store. 

Make sure you research your target market – you don’t want to set up a store for a younger market in places they don’t regularly frequent. Other factors to consider when deciding on a location may include: 

  • Accessibility for all kinds of people i.e wheelchair access 
  • Peak hours – some places are likely to be busier at certain times of the day
  • The right kind of traffic – you don’t want to set up in a crowded place where people don’t have time to stop
  • If it’s an event-based pop up store, consider whether your product and the market the event tends to attract align with one another 

Agreements

Securing the right agreements is a great way to make sure your business is protected while you engage in having a pop up store. It can also aid in resolving any disputes that happen along the line. It is likely you will be seeking the assistance of others to help in running the pop up store such as staff, vendors, decorators and suppliers. 

Getting the right agreements in place prior to setting up the store can help in making sure things run smoothly. For example, you might consider getting Supply Agreements or Employment Contracts

Insurance

As you will be operating in a physical space, there are a different number of things that can go wrong as opposed to operating online. 

For instance, personal liability insurance can act as a safety blanket in case things like bankruptcy unexpectedly pop up –  – it’s better to be safe about these things! 

Licence

Aside from rental agreements, setting up a pop up shop can also be done with the correct licences. A licence to occupy or a casual mall licence (if your location is in a shopping complex) are often used for pop up stores. 

Depending on your location and agreements, you may be required to attain a licence to occupy the space. 

As we mentioned above, a short-term rental agreement is more advisable when it comes to protecting your business. Contact us today if you have any questions. 

How Can I Promote My Pop Up Store?

When thinking about setting up a pop up store, setting aside a budget for marketing is essential. 

It’s tough to get sales if no one knows about your pop up store. You can use the temporary nature of the pop up store to promote exclusivity and rarity. 

There are a number of ways to spread the good word. This can include: 

  • Sending out emails to customers that are on your mail list 
  • Placing notice of the store on your website
  • Promoting it through social media channels 
  • Purchasing spaces to advertise in such as media ads or billboards  
  • Handing out flyers (be aware of any littering or junk mail obligations)

Whichever way you choose to market your pop up store, make sure the dates and exact location are displayed correctly and clearly! 

Key Takeaways

Setting up a pop up store can have many advantages if you go through the process correctly! It’s important to make sure you’ve taken care of all the legal aspects so you can focus on growing your brand. 

Thankfully, our legal experts can help! To summarise what we’ve discussed: 

  • A pop up store is a temporary, physical store 
  • A short-term lease agreement covering the main terms of your agreement as well as any liabilities is essential 
  • Make sure you’ve sorted out any other important legal agreements as well 
  • The location of your store is a key concern as this will impact the market you reach and the zoning regulations you may be impacted by 
  • Consider the benefits and disadvantages of a pop up store prior to committing 
  • Remember to market your pop up store so people know about it! 

If you would like a consultation on setting up a pop up store, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.

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