Make sure you’re in compliance with your bank before running an event
When contemplating any type of high-impact sale, there are many things to consider. One of the most important things to do is to check your loan restrictions. Many (if not all) bank loans have covenants that prohibit any type of sale that varies from the “normal course of business.”
The result can be that the bank will show up with a sheriff or police and physically lock down the store down. A PFP client witnessed this at a competitors store. Another promoter was conducting an event that was shut down almost immediately after kicking off. In this case, it was a Going out of Business Sale. Authorities were involved and it was news in the community. The end result was that the retailer lost all hope for recovery and was publicly embarrassed by the event. While it’s not common for stores to be physically locked down, it does happen. The banks worry about the erosion of their collateral and sometimes panic. It’s a simple matter of getting bank permission prior to kicking off your event.
There are many other compliance issues related to running a successful, trouble-free event. You can count on PFP to assist and make sure that everything is properly handled and legal, prior to your event!