A booth or salon rental lease agreement is a contract that is entered into between a retail hair salon or booth and an individual who is interested in taking up occupancy for a limited duration of time.
Legally it is defined as:
A salon or booth rental lease agreement is an agreement entered into between the owner of a salon or booth (the Lessor) and an individual (the Lessee) interested in taking up occupancy or rendering their service through the Lessor’s business for a specified duration.
The lease agreement may be structured to be month-to-month, week-to-week, or for a fixed duration. Under this agreement, the individual concerned shall remit the rental payment and in some instances a certain percentage of his income periodically. The premise is wholly used for hair styling and haircuts.
Requirements for the Agreement
For the lease agreement to be considered valid, the parties involved must fill out the following information:
- The date of the lease agreement: The date on which both parties sign the agreement should be indicated in the booth salon rental lease agreement.
- The address and name of the Lessor (owner): The owner’s name and their valid address should be included in the document. The owner’s name should be the same as those indicated in the business registration documents to prove that they have the legal authority to rent out the booth salon.
- The name of the Lessee (renter): The name of the renter should also be included and should be the same as in their identification documents.
- The street and address of the salon/booth: The street and address of the booth salon should be included in the document to distinguish the salon from others in the area.
- The size of the booth, i.e., the length and width: The size of the booth allocated for leasing should be included in the document to prevent disagreements over the booth space allocated.
- The term/duration of the agreement: The terms of the agreement, i.e., when the agreement is set to commence and when it should end, should be indicated in the agreement. The booth rental agreement should also include a provision on how the lease can be renewed.
- The rent amount: The amount that the Lessee will be required to pay when leasing the booth salon should be included as well as the frequency in which such payments are to be made.
- Use of the salon/booth: The lease agreement should also define the permitted use of the booth salon. Any prohibited activities/use should also be mentioned.
- Equipment and any personal property provided by the owner: In booth salons, the owner usually provides specific equipment, and there are those that the Lessee should bring with them to ensure that the smooth operation of their daily activities. Any equipment that the owner will provide should be clearly indicated in the booth rental lease agreement.
- Real estate taxes: In most cases, it is usually the Lessor’s responsibility to pay the real estate taxes. However, in some situations, the Lessor may require that the Lessee pays a specific percentage of the real estate taxes. If the Lessee is required to pay the real estate taxes, such provisions should be included in the booth salon lease agreement.
- State of governing law: The booth rental agreement should have a provision for the state laws that will be used to solve any issues relating to the lease agreement.
- Conditions for default: To be on the safe side, it is necessary also to indicate the conditions that constitute a default by the lessee and the penalties that come along. This obviously is to give the tenant psychological preparations to anticipate and handle such issues accordingly if and when they arise.
- Delineate the terms: By ‘terms of the agreement,’ we mean the duration of time in which the lease will be effective. There are three main kinds of lease agreements, namely:
- Fixed lease – Lasts longer than a month and is in many cases non-renewable. Here, the two parties spell out the start and end dates of the agreement.
- Month-to-month Lease – This lasts strictly one month or 30 days. The agreement states the dates when the lease shall start and end. Given that it may be terminated prematurely, a clause exists which specifies when exactly such a termination may be invoked.
- Week-to-weak Lease – As the name implies, this one strictly stays in force for one week. It remains in force on a week-to-week basis until either party decides to bring it to an end. A clause also exists here to specify exactly when termination may have to be invoked.
- Signature: As a final measure, you should append your signature and those of the witnesses and third parties. Make several copies and then serve each party with at least one copy.
When to use it
From the Lessor’s perspective, the lease agreement is to be used to establish the terms of the agreement, i.e., the rental payment, equipment, and the duration of the lease. When setting the governing rules for the Lessee, the rules must be well defined
Here are free downloadable templates that can be customized as per need:
How to Rent a Booth
There are various reasons why the owner of a booth or salon may choose to rent out. One of the most common reasons why they rent is to motivate the Lessee to promote their services and invite more customers into the business. When renting, the Lessee is often required to pay a fixed amount in rent in addition to a specified percentage of their gross sales. Before renting out a booth/salon, the owner must do specific things to make sure that they get the right tenant. Here are things to do when renting a booth:
Find a skilled hairstylist
The first thing to do when looking to rent out a booth or salon is to find a skilled hairstylist. One can do so by using various means such as creating posters, job adverts, and online platforms.
When searching for a qualified candidate, it is important to consider the candidate’s job history and previous relevant work experience.
Arrange an interview
After shortlisting potential candidates, schedule an interview to understand their client’s list and why they are not currently working. The best candidates are those with a great personality and many clients they can easily transfer to their new workplace. During the interview, make sure to:
- Gather background information: The Lessor should ask for the potential Lessee to furnish them with their resume and have them complete a standard job application. This will aid the Lessor in conducting background checks on the prospective Lessee.
- Ask questions: Before settling on a candidate for the salon or booth, the property owner needs to ask the potential Lessee if they are interested in renting the booth/salon. In most salons, if it is the owner’s responsibility to promote the business, they usually require the Lessee to pay them a standard percentage of their total revenues- usually 50%.
Remeber! Under this type of agreement, the Lessee can earn more money by paying a monthly set amount and/or a small percentage of their gross revenue.
Conduct a background check
It is always a standard procedure to have applicants complete the job application when applying for the job. If they fail to complete the job application, it is important to ask them to give consent through the background check authorization form. Once they have given consent, the booth owner may proceed to conduct a background check using available online websites. These websites usually provide one with basic checks of criminal history, court records search, and sex offender search. Add-ons are also available, allowing additional queries for professional licenses, DMV records, and educational verification.
Make sure they are licensed
In addition to great personality and huge clientele, the prospective Lessee needs to have a practice license. Below is a list of all the states with their databases for professionals that can be used to search and verify professionals by the public.
Search Licensed Hair Stylists – By State
Discuss the terms
The next step after shortlisting prospective hairstylists is to commence negotiations for an agreement. The key item that should be given priority when negotiating is the monthly booth/salon rent. If they have enough clients, the owner should consider decreasing their rent in the hope of gaining more profits and driving more business into the salon.
Once this has been agreed on, then the rest of the clauses can be discussed much easily.
After the agreement has been made and all the initial payments made, i.e., security deposit and first month’s rent, the Lessee should be afforded access to the premises on the start date or as otherwise defined in the booth rental lease agreement.
The newly hired hairstylist is then approved to offer their services out of the salon and continue doing so until the agreement comes to an end or is terminated in accordance with the lease agreement.
For any salon business to be a success, it is important to have the right hairstylist(s) working at the salon – one with great personality, huge clientele, and certifications to back them up. It is usually the booth owner’s responsibility to ensure that they drive in more business to generate more profit and remain in operation. As such, it is important to follow all the items listed in this guide to help you when selecting a hairstylist for the salon.