Lesson 7: Pop-Ups
A pop-up restaurant isn’t necessarily the next logical step to opening a brick-and-mortar restaurant, but it offers you a great way to test and refine a concept, even if it’s for a food truck or other venture.
Pop-Ups
Introduction
A pop-up restaurant is a great way to test the waters before diving headlong into a brick-and-mortar restaurant. It can also be used to test a new food concept or show investors that your idea is worth investing in.
Sure, you could decide to open up a brick-and-mortar restaurant, but running a restaurant costs a lot of money, is heavily dependent on the right location and concept, and requires a great menu that keeps customers coming through the door.
A pop-up allows you to test all of this while operating out of someone else’s establishment. During a restaurant’s off hours, you bring in your own team, invite your own diners, and operate a restaurant for a night, a Sunday afternoon, once a month as a special engagement; whatever you and the owner of the restaurant decide is feasible.
The benefits of gauging demand through a pop-up are many.
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- Less financial risk. Since you’re using an existing restaurant, the cost to try out an idea is much lower than opening a new restaurant. There are no long-term costs, and if things don’t work out, you simply close up for the night and dream up your next concept or return to food truck or food both life.
- A built-in audience. Younger generations gravitate toward things that are new and exciting. This is the main reason why pop-ups are so lucrative. Add in any existing customer base you have from a current food operation, and you’ll have them lining up around the door.
- Basic marketing. The idea of a pop-up sells itself on social media. The news can spread virally in no time without much more than a single post on social media. Your audience does the heavy lifting to share times, dates and location.
- When you’re done, you’re done. When the night is over, you’re good to go. There is no long-term lease to negotiate your way out of, no employees to lay off, and no inventory to liquidate. You simply hand the keys back to the owner and either go back to the drawing board or decide to start a full-fledged restaurant.
Other advantages include the fact that your host restaurant is responsible for health inspections, licensing and permitting. In many cases, the host restaurant will allow you to tack your ingredient order onto their regular supplier orders, saving you money.
On the downside, you need to work around the hours of your host restaurant. You’ll also need to work out payment terms, either rent or a share of the percentage of the revenue you take in. In some cases, you will need your own food safety license, food vendor insurance and liquor license. The host restaurant’s insurance won’t cover you.
Return to Main Office
Courses
Introduction
1. Cottage Food Basics
2. The Business Plan
3. Pricing
4. Marketing
5. Food Booths
6. Food Trucks
7. Pop-Ups
8. Brick & Mortar
9. Exit Strategy
Growth of Pop-Ups
The concept of pop-up restaurants has been around since the early 2000s, but it wasn’t until 2015 that they became a “thing” in the food world. Certainly, the pandemic changed its course even more as people sought out new and different things to keep them sane during public health lockdowns. Many restauranteurs turned to pop-ups to make ends meet; some even created their own versions to keep staff employed and money rolling in through the door.
While a host restaurant is the easiest way to do a pop-up because the infrastructure is already there, some entrepreneurs have operated pop-ups out of vacant buildings on Main Street and even parking garages. It takes a bit more creativity to manage this since the space lacks a kitchen, venting and fire suppression equipment, but it can be done.
Even though the pandemic is largely in the rearview mirror, pop-ups have continued to be popular. This is because they allow a budding restauranteur to get their feet wet without making a significant investment in a concept that may not gain the traction it needs to be sustainable.
The key is to create an experience that people can’t easily get at home or in a restaurant in their community. You may offer an innovative new menu, introduce a new twist on a traditional classic, or even feature a renowned chef willing to prepare your recipes and add their own take to your menu. It can also be themed, with a pairing of wines or whiskies to match the meal, or you can set up a pop-up to cater to a food-centric celebration such as Mardi Gras.
Making Money
So, how does one make money with a pop-up?
Ticketed events. A pop-up can be treated as a “happening” where a limited number of tickets are available before the event. Tickets can be sold through your social media platforms and are fixed cost for the experience. This is particularly effective when you are doing a themed night or featuring a visiting chef. The event virtually sells itself, and once you hit your sales goal, you know that you’ve covered your bases. Any additional sales are pure profit. In creating a ticketed event, make sure that the invite outlines what the ticket covers. Gratuities or additional beverages, etc., may be extra and paid for at the end of the event.
Menu sales. You can offer a limited menu of signature dishes or specialties for takeout. Guests can place orders in advance (so you can control costs) and pay for their meals either in advance or on-site, similar to a traditional restaurant.
Collaborations. You don’t have to go it alone. Think about partnering with a brewery, winery or other food/beverage vendor to enhance the dining experience. Revenues are shared through agreements made ahead of time.
Private events. A pop-up can be used for a private event, corporate function, weddings or parties. The menu is customized to the client’s preferences, and a single charge covers everything.