Making the Contract: Sealing the deal on a lease for promotional or pop-up space in a shopping center

Preparing an effective and easy-to-understand contract is one of the most important parts of attracting potential tenants to your shopping center. In today’s digital era, many shopping center managers still rely on word templates and “paper contracts”.

In this article, we’ll show you how our platform, POP UP SHOPS makes traditional paper or PDF contracts redundant in a fully-digital booking and approval process. Booking promotional or pop-up space should be as easy as booking a hotel room.

From Several Contract Iterations to a Simple Space Booking

Paper vs Digital

When tenants want to book a pop-up or a promotional space in a shopping center and sign a contract, they usually have to provide a shop concept and fill out a PDF form. Still too often, they need to print and mail this information to the center management.

This process is time-consuming and likely isn’t the most efficient way of completing a successful deal in timely manners.

The Simple Way

The process on POP UP SHOPS is much simpler. This is how:

  • Landlord information: Whenever a landlord signs up, they provide us with all relevant information for a contract. There is no need to re-enter it for every contract.
  • Space details: All the information about a space is stored in a listing including general leasing terms.
  • Versioning of listings: Details of spaces can change, that’s why our listings are versioned, so whenever something changes, we keep the old version of the listing. When a space has received a booking request, we link the listing version of that specific day to the booking, keeping the legally relevant information consistent.
  • Tenant details: During the registration of a tenant / brand, our platform collects all relevant information for a rental contract.
  • Booking details: When a tenant submits a booking request, he can only do so by selecting available dates, providing the shop concept and by accepting the price and terms of lease. All information is stored in our platform.
  • By keeping all the above information safe and secure on our platform, the parties can access it at any time

Pricing doesn’t have to be intransparent to stay flexible

The traditional way of pricing a retail location in a shopping center is based on intransparency. Often, neighboring tenants can have totally different rates because one had a stronger negotiator or maybe a stronger brand. For pop-up and promotional spaces, pricing should be transparent. A tenant should be able to immediately know the price when he knows the relevant lease period.

At POP UP SHOPS, we give landlords full flexibility in pricing their spaces. For example in a lot of shopping centers, Saturday is the busiest day of the week, hence landlords want to price the space on a Saturday higher than other days of the week.

While providing full pricing flexibility our booking engine is also able to calculate the exact price for a certain time period giving tenants a clear indication of the lease price for each day of the week or the specific time period they are interested in. That makes it easy for tenants to understand how much they will pay and for landlords how much they will get.

In addition, our platform allows landlords to use promo and discount codes as part of their pricing strategy. They use them to attract new tenants or incentivize their current tenants with lower rental fees. Such codes give landlords an opportunity to individualize pricing for their occupants or simply price summer months lower when footfall is smaller.

Terms and Conditions

Landlords tend to use contract templates for leasing agreements for all their rental spaces. This sometimes often leads to additional work for the center manager and might spark confusion on the tenant's side if they are simply renting a space for a couple of days, a week or a month. In such cases, customizing a contract or even negotiating a contract unnecessarily increases the internal costs per booking.

A much better approach is to use general leasing terms. On POP UP SHOPS, landlords can simply attach them to listings. All terms and conditions that apply to a specific space can be entered as “house rules” or “space rules”. This way, the general leasing terms or the house rules automatically become part of every rental contract concluded through POP UP SHOPS as tenants accept them when sending a booking request.

Having clear terms and conditions attached to each listing will also help tenants in understanding what the exact rules are.

On POP UP SHOPS a separate rental agreement is automatically generated for each booking. This feature saves precious time for both the landlord and the tenant, and makes signing of the rental agreement a much smoother process.

Speaking of general leasing terms, there are a couple of essential things landlords should consider including:

What Should Be Inside the General Leasing Terms – the Checklist

The general leasing terms should contain all terms and conditions that are applicable to all of your spaces. In this section, we have grouped the most important things to govern into three categories and also highlight which ones the platform handles automatically.

Object and Use

  • Space. Here, landlords should enlist the dimensions of the rental space (if applicable), including height, width, and volume, as well as mention specifications about the materials in the space. E.g. for the walls, floor (marble, parquet), ceiling, size of windows (daylight), facilities like storage, elevator, restroom, lighting installed, kitchenette, etc. If these things are different for each space, simply use the description field in each listing. Usage agreement/allowed uses. This point defines what kind of activities tenants are allowed to do inside the space they are hiring.
  • Rent fee. The rental fee for a space is calculated by our platform automatically, depending on the duration of use. When tenants are choosing a booking, they can understand the pricing immediately. Therefore, there’s no need to include the rent fee in the general leasing terms.
  • Duration. This element of the contract defines the minimum and maximum duration. It also states the exact hours, in which the tenant can use the space. They can’t come earlier or leave later. Some shopping centers have a minimum usage duration of 30 or even 60 days. On our platform, tenants can hire a space even for a few days. After that, if they want to book for another week, they can easily do it with a few clicks. That’s because POP UP SHOPS keeps their previous booking details, which they can re-use time and again.
  • General provisions. This element includes the general provisions for promotional activities of a certain space.
  • Reasons for dissolution This point defines what happens when a tenant is not adhering to the general leasing terms or the house rules.
  • Cancellation policy. Our platform allows landlords to select among three standardized cancellation policies (Flexible, Moderate, and Strict). We enforce these policies with the aim to protect both landlords and tenants.
  • Space take-over/return. This element states the conditions in which the promo space needs to be given back to the landlord. It needs to be cleaned properly and returned without any damage. If there is some damage, it’s important that there is insurance on behalf of the tenant.

Promotional Activities

  • Presentation. This describes how promo materials are distributed. The personnel shouldn’t be intrusive.
  • Labeling / price announcement. The promoter must announce the prices of their products/services. He/she must provide a receipt to the customers.
  • Opening hours. These are the hours a tenant is allowed to use the promo space. These are the opening hours of the shopping center.
  • Personnel. This element defines how promotional staff should be dressed.
  • Assignment. This is where the tenant states whether the space is for a concept store, for launching an event, for sharing the space with another brand, etc.
  • Conduct. How promoters should behave. For example, addressing customers who are not interested is considered aggressive.
  • Assembly and dismantling. When the tenant should assemble and dismantle certain objects that he/she will need for their promo activities. Usually, assembly is a few days or weeks before opening the spot, and dismantling – after the shopping center closes.
  • Restrictions on use. Define what brands are restricted to use your promo space. Examples include brands selling tobacco, drugs, guns, religious or political organizations, or fast food chains.

Technical Details

  • Power connections. The electricity consumption of the indoor activities should be included in the price of the promo space, except for outdoor areas.
  • Water connection. Define whether water connection is possible in the promo space.
  • Cleaning. The tenant takes care of cleaning the promo space. He/she must return it clean to the landlord.
  • Fire protection. Any materials the promoter uses must not be easily flammable. Lighting of fires (candles) is strictly prohibited.
  • Vehicles. If the tenant exhibits vehicles, the tank contents should be kept at a minimum. The battery must be disconnected. Keys should be kept safe.
  • Insurance and security. The promoter has to have sufficient insurance (including liability) at his own expense and provide the owner with appropriate evidence upon request. If additional security measures are necessary to carry out a promotion, the additional costs shall be borne by the promoter.
  • Parking. If the tenant needs parking for any vehicles (delivery, trailers, cars, etc.) on the premises of the shopping center, he/she should obtain it from the management in advance.
  • Place of jurisdiction, applicable law, place of delivery. This point defines the applicable law to the place of jurisdiction. If a space is in the United States, the applicable law is for the state where the shopping center is located.

Choose POP UP SHOPS

The traditional paper way of signing contracts is not only ineffective but also time-consuming. Start winning more and better clients by signing up on our platform.

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