Opening pop- up shops in Scotland has become a growing trend for providing short-term, often seasonal, sales spaces. They are, by their very nature, temporary; “popping up” one day in a venue then disappearing shortly after that, once they have served their purpose, days or weeks later. A pop-up retail space can be used to create a unique environment that engages customers and is often used by marketers for seasonal items such as Halloween costumes or Christmas gifts. Pop-up Laplands and Christmas Fayres, complete with Santa and Elves are a prime example. For retailers the big attraction is flexibility and overheads (the lack of). The retailer may only be taking on limited responsibility for the sales space for a few weeks only and so there will be fewer obligations in terms of maintenance and repair. Landlords also benefit from pop-up stores, not just by filling up empty space but as an alternative to entering a longer term arrangement with a particular tenant and the often lengthy legal negotiations that can involve.
However there can still be legal pitfalls of which both landlords and retailers ( as occupiers) should be aware. Chiefly these centre around the difference between a ‘lease’ and a ‘licence to occupy’. This is a complex area of law and the subject of many legal cases but rather than going into the legal debate regarding this let me focus on certain points that should be agreed between both parties before proceeding.
- Make sure that there is no confusion regarding the termination of the arrangement. Both parties will intend that the agreement will run for a defined period. If notice periods are required these should be clearly stipulated.
- Be aware of what you , as retailer, are getting in return for your payment. Your pop-up space might be expected to move within a larger development (wheeled concession spaces in malls are an example) and you need to decide if this will be possible or not, and if so, how far or how often you can move.
- Both parties must understand their obligations in terms of repairs and maintenance. You may simply be required to tidy up after yourself or you could be liable for a whole lot more. General contract law states that you are deemed to have read and understood the terms of an agreement if you have put your name to it.
- If the shop is located within a shopping centre it should be established whether there may be a payment of a service charge as well as rent.
- It should also be absolutely defined whether the landlord or other parties, often other retailers, are free to access the property or whether the retailer has exclusive use of it. A lease gives a tenant exclusive possession of a defined space, the location of which does not change without the agreement of the tenant- not so a licence (see above) .
Pop-ups can really be a great business opportunity but remember the devil is in the detail so as ever take good legal advice in time. If I can help please contact me, Joyce Moss, on 0141 552 3422 or by email email@example.com