Pop-up shops are believed to have started in Los Angeles in the 1990s and are a temporary retail-orientated setting or territory designed to create an immediate customer/brand interaction for a limited period.
According to the most recent data available, Pop-up shops contribute £2.3 billion to the UK economy a year and this looks set to continue growing. There is no doubt that the way we shop is changing and landlords of commercial premises are beginning to realise that they need to capitalise on the short-term flexible rental market to maintain revenue streams.
However, as with all arrangements for the occupation of a site for business use, both parties should be aware of the legal implications of the arrangement so their new venture doesn’t fall at the first hurdle.
So, here are our top tips to help all parties to the arrangement get off to a trouble-free start:
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Lease or Licence? - The very nature of a popup is a temporary one so a formal lease probably isn’t right here. A licence is usually the best way forward as it does not confer exclusive possession and continues until terminated on notice from one party to the other. You should also make sure that whatever agreement you enter into doesn’t impose any onerous repairing or dilapidations provisions.
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Does the space have the right planning consent? As a guide retail space requires A1 use, A3 is food and drink and A5 is hot food and takeaway. The new Town and Country Planning (Permitted Development, Advertisement and Compensation Amendments) (England) Regulations 2019 came into force on 25th May and confirmed that A1 retail can be changed to A3 (up to 150m2 and subject to prior approval) without the need for formal planning permission. A5 can also be changed to A1 or A3 in the same way. Hot food under A5 will always require a change of use if it doesn’t already have the permission in place.
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Street trading Licence – If you are planning to sell your wares (or your tasty treats) on the street (rather than in a building) then you will most likely need a street trading licence. You can check the government’s website here: https://www.gov.uk/street-trading-licence to obtain further information on fees and the requirements of your local authority. Proceeding without a licence can lead to fines of up to £1000.
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Business Insurance – No matter what size your premises (or even if you are trading on the street) you should ensure that you have business insurance that covers you for any liability claims whilst you operate from your location. Personal injury claims can, if you are held liable, run into the hundreds of thousands of pounds (including legal costs) so make sure that you get some cover before you open your doors.
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Health and Safety – You still need to ensure that there is access to an appropriate fire exit, that none of your helpers or customers are going to trip over spare boxes or cables and that your food hygiene meets all the standards required by the relevant regulations. Undertaking a quick risk assessment will help minimise the risk of incidents.
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Advertising – As much as you may want to shout about your start-up, there are separate rules governing advertisements. Your street trading licence should advise what signage you can have, but for physical premises you should start by checking the terms of the occupation licence. There are also very specific planning regulations governing the use of advertising which you can read here:https://assets.publishing.service.gov.uk/government
We would love to work with you to help your business take its first steps. If you would like further legal advice on taking a pop-up shop or any commercial leasehold transaction then please contact Rebecca Cleal, Senior Associate at Prettys on 01473 298250 or by email to RCleal@prettys.co.uk.
