Pop-up shops allow retailers a temporary bricks-and-mortar presence with low overheads to see how their goods sell in a physical shop or in a new location.
But if leases aren’t negotiated diligently retailers can be liable for huge costs.
Geoff Harrington, an associate at leading law firm Thomas Eggar, says: “Try to agree an all-inclusive rent in order to avoid unexpected charges. This should include insurance and service charges, as well as business rates and utilities if possible.”
If the landlord requires that insurance and service charges be paid separately then negotiate a cap on those costs.
When it comes to the retailer’s obligations, Harrington says: “Make sure that the lease has minimal repairing obligations [keeping the property clean and tidy] and that it does not have to be returned in any better condition than at the start of the lease.”
Ensure that there is no obligation to redecorate the property at the end of the term. Short-term leases often include break clauses, which may be exercised by the tenant and possibly the landlord.
“If the landlord will not agree to a break option, suggest one be included provided that a penalty payment is paid,” says Harrington.
“This may soften their stance and provide a useful option at a later date. If a landlord’s right to break the lease is included then ensure that they cannot terminate the lease during key trading periods.”
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