Opening a pop-up store

Tarek Hassan launched his first enterprise, Gong Fo Bao, serving traditional Taiwanese steamed buns out of a food cart stationed at a busy downtown intersection near Confederation Park.

But to expand and fine-tune his offerings, Hassan used a strategy that’s becoming increasingly popular among retailers and restaurateurs: a pop-up shop.

The term typically refers to a temporary storefront in a high-traffic area, such as a shopping mall or busy street. While merchants specializing in seasonal merchandise such as Halloween decorations may be the most popular example, major retailers such as H&M and Starbucks have used pop-ups in a former brewery and rented event space, respectively, to test new concepts and generate buzz around their brand.

In Hassan’s case, the entrepreneur took his food truck menu indoors to Fontenelle Restaurant, a Vanier institution that’s served traditional diner food on Montreal Road for decades.

He pays the owners a flat rate to use the restaurant and takes over the space for his “one-offs” after Fontenelle’s closes for the day at 2 p.m. At his most recent event, customers were lined up down the street.

“Fontenelle’s is an old beautiful place. I have wanted to do it for years,” said Hassan.

Pop-ups are typically a win-win for entrepreneurs and their short-term landlords. As in Hassan’s case, an existing restaurant may turn over their space outside normal hours of operation to another business to help cover their rent and the cost of restaurant equipment that’s otherwise sitting idle.

Retailers, meanwhile, may take over a vacant storefront for a reduced rental rate for a short period of time or until the landlord finds a full-time paying tenant.

How to start

Be sure to have a proposal, outlining what you will do in the space, and a professional business plan ready before meeting your prospective landlord.

Pitch the pop-up as a win-win for both sides. Come prepared to tell the landlord what’s in it for them, such as increased foot traffic for their location and the financial upside of the income your temporary venture brings to their unused space.

You may be able to negotiate a reduced rate of the regular rent based on the number of days you will occupy the space or the fixed costs of the empty space. Or the rental payment could also be tied to a percentage of overall sales.

Be sure to research the area you are renting in to get an understanding of what other businesses are paying before approaching your potential landlord.

Pop-up benefits

Ottawa e-commerce giant Shopify has identified seven key benefits to pop-up shops:

  • Testing new revenue streams
  • Engaging customers
  • Creating “get it while it lasts” urgency through limited-time offerings
  • Marketing merchandise around a sale, season or holiday
  • Educating new customers
  • Going to where your customers are