Salon Booth Rentals: The Complete Business Guide

Interested in salon booth rentals? The beauty industry professionals at Marlo Beauty Supply explain the ins-and-outs of renting a salon chair!
 

How does renting a chair work?

Salon chair rental, also known as salon booth rental, works much like renting an office in an office building or being an independent vendor at an art festival. While salon guidelines  for booth rentals can vary significantly between locations, the general notion is that the stylist rents a chair in an already running salon and conducts his or her specialty from that booth. You get the perks of utilizing a space and all its amenities without worrying about building maintenance, but you still have to sign on the dotted line!

 

 What kind of agreement can I expect when renting a booth in a salon?

The salon booth rental agreement will determine how booth rent works for each particular chair. Typically, booth rent is charged as a portion of the stylist’s revenue, as a flat monthly rate, or as a combination of both.

 

I’m interested! What’s the damage?

Salon chair rental cost will vary depending on a number of factors, including:

• The length (in months) of the salon booth rental agreement, with longer contracts typically costing less per month
• The location of the salon and the amount of foot traffic
• The reputation of the salon and the stylist, respectively

 

What is the average booth rent at a salon?

The average cost to rent a chair in a hair salon is hard to pin down. High-end salons in Manhattan are known to charge more than $1000 per month for a booth. However, it is more typical to pay somewhere between $150 and $400 per month for salon chair rental.   

 

What are booth renters responsible for?

A salon booth rental agreement should set out in detail what a booth renter is responsible for. In addition to the duties outlined in the agreement, the renter is responsible for all the things a small business owner typically handles, including:

• Business operations
• Bookkeeping and tax accounting
• Maintaining appropriate insurance coverage
• Maintaining any licenses required by the municipality, city, and state

 

What are some items to consider when deciding where to rent?

Besides location and rent, there are some additional things to consider. Will you need to:

• Handle marketing and promotion of location and/or service*
• Purchase your own products (although some salons may require that you use specific brands)
• Provide all the necessary tools to perform services (although some salons may provide towels, hair dryers, curlers, etc. which would be agreed upon and outlined in a contract)

*Although renters are their own advertisers, having a booth at an established salon can drive in a whole new set of untapped clientele. You may also have the opportunity to be featured on the salon’s social media sites and/or receive reviews on Yelp or Facebook under their page. Potential clients can see your work, allowing for extra exposure outside of your personal social media posts.

 

What's included in a salon booth rental agreement?

Typically, a salon booth rental agreement contains:

• Date and term of agreement
• Names and addresses of all parties in the agreement, including the address of the salon
• Description of the space and booth being rented
• Rent amount
• Details about  salon use, shared spaces, and amenities
• Details respecting all property being provided by the lessor/lessee
• Responsibility for real estate taxes
• Jurisdiction/governing law clause (i.e. in which courts disputes will be settled)

 

Do I need a business license to rent a booth?

Whether you need a business license to rent a booth will depend on the state in which you operate. Even if your given state doesn't require one, though, not having one can increase the chance that the IRS will determine you’re actually an employee of the salon and not an independent contractor, which impacts how you file your taxes.

 

Do booth renters need insurance?

Yes. If you’re operating a salon chair rental as an independent contractor you will need to carry your own insurance.

 

I’m a salon owner of a booth rental salon! What should I be prepared for?

You should know your salon rules for booth rentals inside and out, including guidelines for shared spaces, amenities, damages, and expectations of your renter. Determine what kind of amenities you want to provide your renter, like towels, cleaning supplies and services, hair dryers, and a scheduling service or receptionist access. You should also know your local regulations, state, and federal laws governing the relationships, responsibilities, and rights of business owners, independent contractors, and employees.

 

How do I attract salon booth renters to my salon?

Salon chair renters may be more attracted to your salon if it has a good reputation and is aesthetically pleasing. It also helps to:

• Use social media to advertise your salon
• Attend hair shows to recruit contractors
• Contact local cosmetology schools and connect with impressive new graduates
• Create an apprenticeship program in your salon

 

How do salons pay their stylists?

Some salons treat their stylists as employees, while others treat them as independent contractors (also called 1099 contractors, as they are required to submit a 1099 tax form). The difference between a contractor and an employee is defined in law; it is basically determined by analyzing  the nature of the arrangement between the business owner and the worker. Contractors are entrepreneurs that are typically temporarily or contractually employed by a larger company, whereas employees are usually more committed to one company and receive some kind of additional benefits or health insurance.

 

Can a salon owner fire a booth renter?

A salon owner may not fire a booth renter like he or she would fire an employee. A booth renter is essentially a tenant, and the relationship between landlords and tenants are governed by different rules than employers and employees.

Renting a booth or chair in a salon is essentially the same as taking in home clients, but with an overhead fee and access to the polish and professionalism that comes with a salon space. In all: you are an entrepreneur and small business owner! You can determine your own rules, market yourself as you choose, and perform your chosen services with personal flair. As a salon owner, you can make some extra rent money and provide your returning clients with a fresh featured artist as often as you choose. As long as both parties are in agreement about the shared space, legal regulations are upheld, and taxes are filed, renting a salon booth or chair is mutually beneficial for service providers, owners, and clients alike.