Pop-up businesses are everywhere. Whether it’s a retail shop that popped up in an empty space on King Street, or a pop-up café operating out of my local Surf Life Saving Club. We love pop-ups. But we also know what it takes to set up a business, even a temporary one. So, we thought we would set out the basic legal and regulatory requirements to help those decide whether they want to pop-up, or just set up.
What is a Pop-Up?
A pop-up shop is a temporary retail event. A pop-up shop can exist for a few hours or a few months. Businesses use pop-ups for several reasons including:
- Testing markets;
- Creating urgency;
- Generating brand awareness; or
- Reaching new customers.
Pop-up shops typically use vacant properties for a short period, and otherwise unused space can generate income while property owners look for long term tenants. This is advantageous for both the property and business owners. So what do you need to know about setting up your pop-up business?
1. Location, Location, Location
One of, if not the most important issue to guaranteeing your pop-up’s success is its location. Choosing a space that already has the appropriate development consents will save you both time and money. Building work and using a premises are both forms of development. Councils, however, may not require you to apply for formal development consent if your plans fall within the premises’ current development approval. Once you have found a space you think best suits your needs, ask the owners about their current approvals before calling your local council and discussing what, if any, additional approvals you will need.
2. Do I Need An Agreement?
It is important that you put in place an agreement with the premises’ owner to explicitly reflect both parties rights and obligations. If the agreement is for less than six months, then the Retail Leases Act 1994 (NSW) does not apply, and you will not need to enter into a retail lease. However, it is still important to enter into some formal lease arrangement with the owner, minimally addressing the following issues:
- The name of both parties.
- The premises that the party will use;
- How long the space will be available to you;
- How you will use the space, including any alterations you plan to make;
- How much rent you will pay and when you must pay;
- What times you can operate the business;
- Who will connect the services (gas, water, electricity) and who will pay for the connection and ongoing use;
- What you need to do at the end of the agreement i.e. return the premises to its original condition.
Even if you are just operating for a few hours, you should still ensure you have the right insurance, such as public liability insurance and plate glass insurance. However, this depends on the type of business you are planning on operating and the premises. You should check with your insurance broker as to what is the best insurance for your type of business. The owner of the premises may also require you to take out insurance on the premises itself, although in most cases, this owner covers this and includes the cost in the rent.
4. Licences & Obligations
If you intend to serve or sell alcohol, you will need a liquor license. If you already have an on-premises license relating to your business, you may be able to apply for a ‘sale on other premises authorisation’ that allows you to sell alcohol for consumption at your pop-up. For example, cafes and restaurants that already sell alcohol. For more information on liquor licenses see Liquor & Gaming NSW or equivalent state body.
If your pop-up business is a food business, you will need to abide by the food safety requirements and obligations. Many businesses that sell food need to notify enforcement agencies of their details, and you should check with your state food authority and local council for your notification and licensing requirements. The City of Sydney also offers free workshops for setting up and running temporary food businesses.
Before you rush in head first and set up your pop-up business, there are a few issues you will need to consider before you start. You may also think about whether after putting in all the effort to start your pop-up business, to instead just set up your business!
Questions? Get in touch on 1300 544 755.