Business Law Articles
More and more entrepreneurs are combining retail, catering, services and culture to create a “unique customer experience” and to generate more sales. A bookstore gets a coffee bar where people can read, the liquor store offers wine classes, and gas stations are also grocery stores offering a wide range of products. This phenomenon of combining different activities is generally referred to as “blurring”.
The desire to combine different functions is growing rapidly whereas the Dutch legislation is still not flexible enough to follow suit. Especially the Licensing and Catering Act and designated use for real estate can create obstructions for innovative entrepreneurs. So how can the distinctions between the industries be blurred within the hard boundaries of the law? What do entrepreneurs have to keep in mind?
Blurring and the Licensing and Catering Act
A restaurant that intends to sell furniture will be confronted with the strict rules under the Licensing and Catering Act. The sale cannot take place in the same location where alcoholic drinks are served. The entrepreneur must set up a separate space for the furniture trade or has to refer to an online shop. Conversely, the retailer who intends to expand his range of products with alcoholic drinks must have a licence under the Licensing and Catering Act and adjust his store accordingly.
Action: Before realising your plans, make sure to check whether you need a licence, what are the conditions imposed, and whether an expansion of your current business will in the end still be economically viable. Also check out other options that don’t require a licence and/or adjustments, such as collaborating with another business, for example a liquor store and a restaurant organising wine tasting together at the restaurant that already has a licence under the Licensing and Catering Act.
Blurring and designated use
In a zoning plan, a certain use is allocated to an area and rules are established regarding the use of the area and the buildings on this area. A plot can be allocated the use “mixed”, which will make the operation of a combined business possible, but a particular retail use may also apply. In the last case, blurring will soon be in violation of the zoning plan.
In case you are leasing a building, a certain purpose of the leased property is allocated in the lease agreement. If the lease agreement provides that a property must be used as a clothes shop, it cannot suddenly be combined with another function (such as a catering or cultural function) without approval of the lessor. If you do so, this can be a reason to terminate the lease agreement or you may risk a contractual fine.
Action: Before realizing a concept where the lines between industries are blurred, make sure to check what function is allocated to the plot. Check what is provided in the lease agreement and consult the zoning plan of the municipality. If blurring turns out to be in violation of the zoning plan, an integrated environmental permit might be requested to derogate from the zoning plan.
In 2015, the municipality of Amsterdam established a number of so-called free zones for a period of two years. A free zone is a shopping street where fewer rules apply and entrepreneurs who want to initiate a concept where the lines are blurred or another creative concept will get more scope to realize their ideas. Residents, entrepreneurs and property owners determine the rules together.
Would you like to realize a concept where the lines between industries are blurred? Make sure to check what is permitted and what is not and contact a lawyer if necessary. We will gladly assist you in assessing whether your plans are in line with the applicable legislation and regulations! This way you can prevent costly investments in an unauthorized concept. Please contact Russell Advocaten.