The promise and dangers of running a pop-up restaurant

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In some cases, the host, owner or not, may not have the knowledge to be an effective partner. No one can know the ins and outs of operating, say, a transient raw fish bar like Crudo e Nudo better than those who do the job. This is why it is crucial to have upstream conversations to define the terms. “Some hosts wanted all the control,” says Bornemann. “They wanted to be involved in the pricing, the size of certain dishes, and even the ability to criticize the dishes.” In these cases, Bornemann and Culhane decided to withdraw from these agreements rather than risk a contentious partnership. The pair have also kept a full calendar of events as a general safety net in case an event doesn’t pay off. “If anything happened down south, we knew we had booked another pop-up within a day or two. “

Food halls are a useful comparison because they are structured the same way as a host-supplier partnership and because a restaurant’s best practices do not always match the demands of a stand operation. Margaret Pak and Vinod Kalathil launched their South Indian pop-up Thattu as a stand at the Politan Row food hall in Chicago. The gig was great for building a brand, but the amount of work ultimately didn’t justify the profits. Pak and Kalathil were forced to occupy the booth all day, even though most of their sales were in quick bursts at lunch and dinner. They also had to stick to the same menu, which would ensure consistency for customers but stifle creativity. Ultimately, the experience made the flexibility of a pop-up model even more appealing. After just nine events, they made almost as much as they did in 10 months of full-time market sales. “It’s not just about being successful, but being able to do it at our own pace in terms of life balance,” says Kalathil.

Liability management is another important part of running a pop-up, whether it’s specifying payment terms after an event or planning for worst-case scenarios like property damage or personal injury. “There are always risks that have financial implications in any type of start-up,” said Michael Farhi, partner at the law firm. Kates Nussman Ellis Farhi & Earle, srl, who practices business law. “Having the basic terms in writing early is always the best protection. And yet, most pop-up partnerships are in fact formed on handshake deals. For Pak and Kalathil, everything was done verbally, but working with friends in the industry was the surest way to minimize the risk of a bad deal. Bornemann and Culhane made up for the lack of a contract by showing up at each event with a valid food handler’s license and general liability insurance.

Informal agreements are ubiquitous in part because pop-ups are so quick and rambling, but also, contracts are an imperfect tool that takes time and money to enforce, scarce resources for vendors. Yana Gilbuena started as a pop-up vendor in 2013 when she hosted 50 Filipino Kamayan dinners in 50 states for an event called SALO Series. At a dinner party, Gilbuena recalls paying out of pocket to cover a multitude of unforeseen expenses from the host, such as payment processing fees, as well as food costs for a number of unexpected guests. The unexpected charges went against the contract Gilbuena had for this event, but rather than hire a lawyer, she decided to move on. “I had the choice of spending the energy and time or I could just focus on learning from my mistakes.” In the end, the evening cost her more money than it did.

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