The Promise and Perils of Running a Pop-Up Restaurant
In some cases, the host, landlord or not, might not have the relevant knowledge to be an effective partner. Nobody can know the ins and outs of operating, say, a transient raw fish bar like Crudo e Nudo better than the ones doing the work. Which is why having conversations up front to lay out the terms is crucial. “Some hosts wanted all the control,” Bornemann says. “They wanted to be involved in the pricing, the size of certain dishes, and even the ability to critique dishes.” In those cases, Bornemann and Culhane decided to walk away from those deals rather than risk a contentious partnership. The pair also kept a full calendar of events as a general safety net in case an event didn’t turn a profit. “If anything ever went south, we knew we had another pop-up booked in a day or two.”
Food halls are a useful comparison because they are similarly structured as a host and vendor partnership and because a restaurant’s best practices don’t always line up with the requirements of running a stall. Margaret Pak and Vinod Kalathil started their South Indian pop-up Thattu as a stall at the Politan Row food hall in Chicago. The gig was great for brand-building, but the amount of work didn’t justify the profits in the end. Pak and Kalathil were obligated to staff the stall all day, even though the bulk of their sales were made in quick bursts at lunch and dinner. They also had to stick to the same menu, which would provide consistency for customers but was creatively stifling. Ultimately, the experience made the flexibility of a pop-up model that much more appealing. After just nine events, they have earned almost as much as they did over 10 months of full-time food hall vending. “It’s not just a question of being successful but being able to do it at our pace in terms of life balance,” Kalathil says.
Managing liability 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 carry financial implications in any type of startup business,” says Michael Farhi, a partner at the law firm Kates Nussman Ellis Farhi & Earle, LLP, who practices business law. “Laying out the basic terms in writing in the beginning is always the best protection.” And yet, most pop-up partnerships are actually formed over 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 to each event with a valid food handler’s license and general liability insurance.
Informal agreements are ubiquitous in part because pop-ups are so swift and scrappy, but also, contracts are an imperfect tool that require time and money to enforce—scarce resources for vendors. Yana Gilbuena started out as a pop-up vendor in 2013 when she famously staged 50 Filipino kamayan dinners in 50 states for an event called SALO Series. At one dinner, Gilbuena recalls paying out of pocket to cover a slew of unexpected charges from the host, like payment processing fees, plus food costs for a number of unplanned guests. The unexpected charges went against the contract Gilbuena had for that event, but rather than hire a lawyer, she decided to just move on. “I had a choice to expend the energy and time or I could just focus on learning from my mistakes.” Ultimately, the evening cost her more money than she made.