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Setting up a Pop-Up Storefront? Pay Attention to These Legal Areas

Deborah Sweeney

Contributor at Fundera
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best.

It’s not uncommon to see temporary storefronts selling Halloween costumes suddenly cropping up during the autumn months in empty strip mall spaces or shopping centers. Meet the pop-up shop, an industry segment valued at $50 billion in the United States in 2016.

Unlike many small businesses, these shops tend to cater to a specific season or for a certain promotional reason. They’re only around for a limited time, but pop-up stores have built a cult following with consumers. Their short-term lifespan creates a sense of urgency in shoppers. October 31 isn’t too far away and you’ll need a costume, so why not go shopping now before the space is gone? While you’re there, you might find unusual products in their inventory you wouldn’t spot anywhere else. This lends itself well to positive word of mouth from the shopper to family and friends, ultimately helping build brand awareness about the pop-up store to a wider network.

You’ve written a business plan with your storefront’s goals and objectives. You’re sold on the idea of testing the entrepreneurial waters with a pop-up shop. What do you do next? Much like running any small business, you’ll have to focus on tackling a few legal areas first before you can open your doors to the public.

Incorporate the Business

Your pop-up business may not be around for the long run, but your personal and professional assets will be. Incorporating or forming a limited liability company (LLC) allows you to treat the pop-up store as its own separate legal entity. This ensures your personal assets are protected in the event of unforeseen circumstances that could negatively impact the business. Incorporating also allows you to establish credibility. After all, you want to create a reputation for being a legitimate business to encourage more customers to shop at your pop-up!

pop-up storefront

Do You Need Business Licenses or Permits?

This decision will be based on the type of pop-up you decide to operate. Maybe you’ll choose a seasonal retail storefront, or decide to open an eatery or bar. Depending on your industry and location, you will need to check in with your city or state to figure out which business licenses and/or permits your pop-up store might need.

Location

What type of space do you want to frequent? Do you want to have your shop located in a strip mall, as a kiosk, or in a gallery space? Generally, most entrepreneurs want their pop-up stores to be in a place where there is established foot traffic that fits into their budget.

You may already have your target customer demographics outlined in your business plan to guide you in finding the right spot for your pop-up. Once you have an idea of where you want to open up shop, explore the area. Meet with the landlord or owner of spaces you’re interested in to schedule in a viewing. Conduct a thorough examination to determine if its interior and exterior are the right fit for your needs. Some interior concerns you may have might include lighting and WiFi while the exterior might cover parking and visibility. Ask questions during this time to learn more about the surrounding stores, overall area, and rental/leasing expenses and conditions.

Still struggling to find the right space? Reach out to existing pop-up shop owners in the vicinity and share your story. Ask how they were able to figure out which kind of location worked best for them.

pop-up storefront

Negotiate the Lease

You did it—you found the perfect space for your pop-up store! The good news is that its lease/rental terms will be much shorter than they would be for a more traditional small business. However, you still want to make the most of your time spent in the space and ensure that the experience has been a positive one. Ask your future landlord any questions you might still have when negotiating your lease. Some of these may include whether there are any additional rental expenses, if you will need insurance, and if there is a down deposit required from your end.

It’s also strongly recommended that you consult a legal professional before you sign any paperwork. They will be able to help you review the agreement and make sure everything is how it was agreed upon between the landlord and tenant—aka you, the brand-new pop-up store owner.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Deborah Sweeney

Contributor at Fundera
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best.

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