Posted by Kristen Parker on

Owning a small business can be a lot of effort and it’s very expensive. Luckily, temporary marketplaces hold a long tradition in many cities, towns and rural areas which make it easier for home-based small businesses to reach customers in addition to having online stores.

However, selling at temporary markets can still be expensive, so it’s best to do your research prior to signing up to be a vendor. This information can help you better spot event scams and bad events, stop known scams, and become a better informed vendor.

Before we get started with how to research, let’s take a look at some of the basics of temporary marketplaces.

What is a temporary marketplace?

Definition: “an open space where a market is or was formerly held in a town.”

Marketplaces (markets) are arts & craft fairs, farmer’s markets, pop up markets, trade days, market days, flea markets, etc. Many festivals and fairs include marketplaces as part of their events, too. Basically, marketplaces allow merchants to sell their goods and services where the marketplace is held.

To keep it simple, we’ll refer to all of these as events and their organizers as promoters.

The Basics

Event promoters rely on selling booth spaces and obtaining sponsors for their events, but in order to do that, promoters must have a place for you to operate your business. This place is considered a venue. Promoters then divide their space to rent to vendors of all types from food, non-food, corporate business, amusements and entertainment. The process is dividing and leasing space to vendors where the vendors are the tenants. Promoters who rent space from someone work the same way – they’re renting space to provide a place for your business.

This is commercial real estate leasing which is most often a gross lease. Gross lease typically means a tenant pays one lump sum for rent, from which the landlord pays his expenses. Since most of these events are only around for a few days at a time or less, the booth space lease is considered a temporary short-term commercial lease.

What does this mean?

Since promoters and vendors enter into agreements for temporary commercial leases at events, they very well may be held to a higher standard by the State of Texas than many think. Promoters are also responsible for not misleading vendors or attendees in their advertising in this state as well.

How to Research Promoters and Events

We’ll use our information to help you see examples.

Is the promoter booking their own event or are they booking for someone else’s event?

If they are booking for someone else’s event, they more than likely should have a Texas Real Estate Salesperson or Broker’s License because they may be acting as a third-party to a real estate transaction – your vendor booth space agreement/application.

  • They should also have a special bank account or be using the actual promoter’s special bank account to safely hold your rent money and deposits.

Check the hired third-party promoter’s name here – Then, type the name into the license holder search. Their license should say Active, if they have one.

  • You can also enter their business name, too.
    • If they are practicing licensed activities through their company, their company must also be licensed, or;
    • As a Sole Proprietor, the licensee must submit their DBA/Assumed Name Certificate to notify the Commission of their business name.

If you can’t find their name or results aren’t provided – they’re not licensed as a Texas real estate agent/broker; or they may have used a different name for their license – continue with our article. You may find actual names and any discrepancies during your research.

  • The Broker is the person in charge
  • The Designated Broker of a Business Entity is in charge
  • A Business Entity License requires official state filing documents to be sent to and approved by the Texas Real Estate Commission before a license is issued to the business entity.

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Does the promoter have a DBA on file for the county where they are operating?

DBA (Doing Business As) or more commonly known as “Assumed Name” are registered in each county where the promoter or business operates. Search for “Assumed Name Search [Enter County],” you’ll want to click on the links for the County Clerk. Searches are usually free of charge.

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Is the promoter’s company an LLC, Inc, Corp or Partnership?

These are considered business entities and in Texas, these entities are on file with the Texas Secretary of State. You can check their status through a couple of ways.

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  • Texas Secretary of State – Type in the name & click on view to see the filing letter
    • you may have to create an account and pay a small fee for a SOS search
  • Texas Comptroller of Public Accounts – Type in the name & click on view to see info
    • It should say Active next to “Right to Transact Business in Texas”

Does the promoter or the promoter’s company have a Texas Sales and Use Tax Permit?

Promoters in Texas are required by the Texas Administrative Code to have Texas Sales and Use Tax Permits, just like most sellers of taxable goods and services (vendors). Here’s a brochure from the Texas Comptroller of Public Accounts regarding this requirement –

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If the promoter states they are a charity, check to see if they are exempt from Texas Sales and Use Tax. Only a few circumstances can exempt a business – read more here. They must apply for the exemption as well. It is not automatic.

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Verify Venues

Most venues require promoters to sign rental contracts prior to leasing the property for events which also includes making payments, either in full or in specific increments.

Anyone can call or email venues to verify whether or not an advertised event is scheduled to be held there.

A simple search for the venue name will give you the website and phone number to publicly listed venues such as fairgrounds, parks, community centers, etc.

Do a general search for the promoter and the event

Search the Event Company and Promoter’s Name on Google, Bing, Yahoo, Social Media, Yelp, etc. to see what all you may find and what kind of advertising that may be happening, reviews and more.

Also, be sure to do a general search for events in the areas where the one you want to book is happening. They should turn up in the search results. Further than 6 pages into search isn’t very strong in a very popular area.

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Ask around

Don’t be afraid to email, call or message a promoter with your questions. They should be able to respond with your answers or where you can go to find them – like their website. Also, ask around about the event and the promoter with other vendors. They can be a good resource to help you.

Don’t be afraid if the event or promoter is new either. If you can get answers from them and they can show you what they are doing to get an event successfully off the ground, it might be worth a try.

Make sure it all makes sense

Use what everyone is saying as a way to piece together the puzzle of your decision with the above information. They should all fit together in some way. Keep digging if it doesn’t and stop if it doesn’t seem right.

Many know what is required to run a legal event promotion business and just as many don’t know as well. Tread lightly when asking a lot of questions. If it doesn’t make sense, just find another event.

What to do when the event you chose was wrong

Sometimes things happen and it can go very wrong leaving you without money, a place to sell and not what you signed up for in the first place. All is not lost, but it will take you to help make it all right.

Both the Texas Real Estate Commission and the Texas Comptroller of Public Accounts accept complaints from the public against businesses that are and should be regulated by them.

Click the links below to go to their complaint pages:

You can also file a complaint with the Texas Attorney General’s Office if there was false advertising, misrepresentation of services, and other deceptive practices.

Click the links below:

Where to go from here

Be sure to weigh all your options when deciding what the best course of action to take is for you. Just know that you have more options than spending more money for a lawsuit. Gather your documents and carefully review them before making any decisions. Your small business is important and you should be able to access the information you need to make a well-informed decision. It’s your choice and you deserve the best for your business.

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