- Business and Employment
Salon Booth Rental Agreement Writing Tips
What’s more fabulous than being a master hair stylist? Owning your own salon! Not only will you always look good and feel beautiful, but you are the one in charge of naming your hair salon, marketing your salon, and making sure you have the best talent working inside your salon!
As the owner, it's up to you to determine how to manage your stylists. Some owners will simply pay a percentage of the monies earned, or commission, from each service performed while others will charge a flat monthly rate to be operating there. If you choose the latter, which is a very common scenario, then you will want to think about having a good, solid salon booth rental agreement in place!
Booth Rental Agreements
Before I delve into what should be included in a salon booth rental agreement, I will first go over a few basics about them.
What are salon booth rental agreements?
A salon booth rental agreement is basically a lease like you would have for an apartment, but on a smaller scale for a workspace. It enables salon owners to rent out spaces, “cubicles,” or booths to operate independently under their roof and only have to pay whatever is specified in the agreement, rather than a percentage of sales.
How is it different for the owner?
The owner of the salon is not responsible for payroll, rather ensuring that each stylist knows they are operating as a 1099 worker, or an independent contractor. The owner also has the responsibility of collecting rent from the booth renters, and dealing with any potential problems as they may arise. The salon owner is under absolutely no obligation to offer any kind of health insurance or benefits, and is not responsible for any operations or actions of the stylists.
How is it different for the stylists?
As stated earlier, stylists must pay out a monthly/weekly/bi-weekly booth rental fee, rather than be paid an hourly rate and/or commission on services performed. They have the freedom to make as much or as little as they see fit, but in order to be a successful booth renter, it is best that they focus on marketing and making the most they can.
Not only are stylists responsible for paying a booth rental fee, they are ultimately responsible for purchasing their own supplies, keeping track of all of their finances, maintaining a database of clients and appointments, paying taxes and insurance, and securing appropriate business licensing where required by local government. Basically, they are their own business and are in charge of everything within their own operation!
Drafting a Rental Agreement
Your best bet when making any kind of legal, binding contract is to consult an attorney or utilize websites such as Legalzoom.com, Nolo.com, or Rocketlawyer.com.
If you are adamant on drafting your own, it can be helpful to use someone else’s agreement as a guide or perhaps one that you may have saved from renting your own booth in the past.
Regardless of who writes it, it is still good to have a legal entity look it over to ensure it’s an enforceable agreement.
What to Include
Rental basics. Rental start/end date, rental amount, due date (weekly, bi-weekly, monthly), late fees and when/how they are charged, and any other fees that may be the responsibility of the renter such as security deposits.
What’s included in rent. It should be clearly stated in the contract what is included in the rental fee. Things that are often included are: Booth rental, use of electricity, trash removal, merchant service, landline access, wifi, cable, shampoo station, designated storage area, and so on.
Rescission period. Often times, when you start as an employee at a new place, you are given what is called a “probation period” which means you can quit or be let go for whatever reason within the specified timeframe, often 15 or 30 days. Similarly, since your renters are not your employees, you still need this provision in the contract and include that a written notice must be given. Let’s face it, personalities can clash hard. Just don’t leave this out; it protects both of you.
Optional services. If there are other services you can offer your renters, such as the services of a receptionist at an additional charge, offer this in the contract and have the renter initial next to each additional service agreeing to the fee on top of the rent.
Decorating restrictions. Some salon owners are against a whole lot of decorations while others don’t care how it’s decorated, so as long it’s returned to the original state upon vacating. If you have any personal preferences, this is the place to include it.
Before even thinking about typing up your rental agreement, you need to make sure renting booths out is legal in your state! As far as I know, it is illegal in a few states, and you don’t want to be operating outside of the law by accident! If you have the legal green light, go for it and see how well it can work out for you!