A Brief Introduction of Salon Chair Rental Agreement
Any freelancing beauty professional or hairstylist who does not have access to much capital in the initial years of their business may consider hiring the premises and the equipment of an established salon for a specified license fee and for a specified period of time. The agreement has various nomenclatures such as hairdresser rent-a-chair agreement, salon rent-a-chair agreement, salon booth rental contract, hair salon chair rental agreement.
The owners of spas, barbershops, hair and beauty salons benefit a lot from this agreement. The agreement clearly explains the distinction between the salon’s clients and the freelancer’s clients. This prevents the professional from soliciting the clients of the salon with which he enters the contract.
Who Takes the Salon Chair Rental Agreement?
The agreement is taken between a
Salon owner – The individual who is experienced and has access to investment and infrastructure. He wants to let his premises and salon equipment to the freelancing beauty professional for a consideration.
Freelancing beauty professional – They are a self-employed individual. They aim to grow in his profession but due to lack of funds, they are not able to invest in the infrastructure of a professional salon. They enter into an agreement with the salon of their choice and pays a specific percentage of revenue as the license fees to the salon owner. A professional hairdresser, beauty therapist, nail technician and tattoo artist are some professionals who benefit from this agreement.
Purpose of a Salon Chair Rental Agreement
The main purpose of entering such an agreement is generating more revenue and using idle capacity for both the salon owner and the freelancer. Since there is no employment agreement, this arrangement does not suffer from the typical employer-employee relationship. Also, having a legally enforceable beauty salon chair rental agreement in place helps cement the terms of the business relationship.
Contents of a Salon Chair Rental Agreement
A standard salon booth contract template has the following terms
- Name, address and contact number of the salon and the self-employed beauty professional. The status of the freelancer should clearly be mentioned as self-employed.
- Nature of the services that will be provided by the freelancer
- Details of the professional including any certification numbers
- Experience of the professional
- Type of equipment and space proposed to be used
- The working hours of the freelancer in a day and during weekends
- Salon Chair rental rates — It may be a regular monthly sum or a specific percentage of revenue of the freelancer
- In case of damages if any caused to the salon’s infrastructure, how the same will be indemnified by the freelancer and the responsibility of paying insurance
- The other operating expenses of the freelancer shall generally be borne by him
- Both the parties shall operate in such a way that they do not poach each other’s customers.
- The content of agreement also includes utilities provided with the rental agreement
- Usage of the regular equipment such as hair dryers, massager, shampoo, and all the required things for the hairstylist.
- The date of the agreement and the tenure for which the agreement shall be valid
- The dimensions of the space that the hairstylist is permitted to use
- Maintenance of the building
- Breakup of the fee that is payable to the salon owner — the fixed part and the variable part
- Equipment provided by the owner and equipment that the professional has to bring for himself
- Any additional payment for providing such equipment to the professional
- Responsibility for payment of taxes
- Acknowledgement of non-solicitation of the others’ clients
- Responsibility for compliance with all the relevant laws
- Part of the insurance premium that the professional shall pay to the owner
- Security deposits and advances and any deductions from such deposits
- Ceiling and minimum payment on the fees that would be charged from the customer
- Governing law
- Termination of the agreement
How to Draft a Salon Chair Rental Agreement?
The salon owner shall provide the working hours to the freelancer in a way it does not interfere with the normal operations of his business. Once the important aspects of the relationship are arrived at a mutually beneficial point both the parties shall enter into a formal relationship.
Below are the important points to be included while drafting the agreement.
- Type of Services that will be provided and any certification provided for such service
- Experience in the field that the professional works in
- The Essentials that will be provided to the hairstylist
- Term of the Agreement
- Self Employment Status of the Hairdresser
- The duration of the agreement
- Responsibilities for maintenance of the building and insurance share
- Assignment, subletting, and succession
- Increase in rent
- Deductions from security deposit
- Right of inspection
- Evacuation of premises and notice period for that
The salon owner shall negotiate the basis of charging the license fees after analyzing the demand and expertise of the freelancing professional. He may consider charging the license fees as a specific percentage of revenue and may negotiate to increase the percentage when he finds the freelancer to be promising. Some aspects that negotiations would happen are
- Increase in the rent
- Deductions from the security deposits
- Access to the building
- Utilities and equipment that must be provided
- Liability over maintenance
Benefits and Drawbacks of a Salon Chair Rental Agreement
The agreement has following benefits
- The freelancer shall operate flexibly and can enter into one or more contracts to utilize his available time.
- Usually, a freelancer has their own clientele. This clientele helps both the salon owner and the freelancer with their business. The relationship proves to be an indirect marketing strategy for the parties to the contract. They directly or indirectly bring clients to each other.
- The salon owner can generate additional revenue from letting his idle space and capacity
- The salon owner can reduce his costs because the professional will share in the total costs such as for insurance and taxes.
The contract also poses the following demerits:
- The Individual needs to file their own taxes
- They need to take care of insurance, the equipment required and also need to regularly maintain a bill book. This is time consuming and in turn affects the profits.
- The contract, though clearly states all the terms by the parties in the agreement, is not easy for the third party to understand, which might create confusion.
What Happens in Case of Violation?
Soliciting the clients of the salon owner by the freelancer and vice versa can be a serious violation of the contract. The very purpose of legalizing the relationship gets defeated and the parties get into trouble. Violation can also happen when the freelancer fails to remit the license fees regularly.
In any case of violation, the salon owner shall ask the freelancing beauty professional to evacuate the premises and terminate the agreement. The freelancer shall keep his clients well informed about the change of place of his operation. In case of damages to the infrastructure of the salon, the salon owner shall require the freelancer to compensate for the damages. The parties may also approach a court of law and seek injunctive relief(1). In case of loss of profit, they may claim compensatory damages. If there is damage to the reputation, the courts may award punitive damages as well.
All the key terms and conditions about the operations of the freelancer and the salon shall be clearly explained to the clients(third party) wherever required. The parties to the agreement shall function based on professional and business ethics and also ensure that the contract is compliant. This regulation governs the entire self-employed business model and the salon chair rental is not an exception either. This is because salon chair rental costs will always offset putting up capital upfront for a business that is uncertain as yet.