Beauty Salon Room Rental Agreement

$129.00 inc. GST

 Last Updated September 9, 2020
  All Australian States & Territories

Rent out a room in a beauty salon and earn extra income

★ Covers all of the essentials – licence fees, bond, inclusions, termination – plus MUCH more.

★ Peace of mind that you and your business are legally protected

★ Drafted in plain English by Australian lawyers

★ Complete our Beauty Salon Room Rental Agreement template in under 10 minutes

What is a Beauty Salon Room Rental Agreement?

A Beauty Salon Room Rental Agreement is a contract to rent a room in a beauty salon/spa to a freelancer, such as a beauty therapist, masseuse or cosmetic practitioner.

The freelancer is self-employed and runs their own business. As an independent contractor, they have their own clients, set their own hours and provide their own equipment. They pay a Licence Fee to the salon in exchange for use of the premises.

If you have a beauty room to rent, our template has you covered!

 

Do I need a contract to rent a room in a beauty salon?

Yes, we definitely recommend you use a proper contract if you’re renting out a room.

It’s really important to manage a room rental properly so that you protect your salon, your clients and your reputation.

Fair Work conducts inspections into Rent A Room arrangements on a regular basis to make sure that they aren’t sham contracting arrangements. Sham contracting is hiring someone as a contractor when they should be an employee. If you’re convicted of sham contracting, you could be hit with a fine of up to $12,600.

Setting out clear guidelines in a contract will make things easier for you, and your freelancers.

We recommend you also download and keep a copy of this fact sheet from Fair Work before you get started so you understand the key differences between an independent contractor and an employee.

 

What does the Beauty Salon Room Rental Agreement cover?

Our Beauty Salon Room Rental Agreement template includes:

★ Licence Fees – will you charge a fixed Licence Fee (weekly/monthly), a percentage of takings, or a combination of both?

★ Bond – the amount you will charge as a security deposit

Term of Agreement – e.g. 1 year

★ Permitted Use – the services they are allowed to carry out at your salon

★ Access and Hours of Work – can they work whenever they want, or only during your salon opening hours? Any restrictions in your lease?

Signage – rules for signage

★ Insurance – what insurances do you require the contractor to have and maintain?

★ Operating Expenses – are charges for cleaning, electricity and other utilities included?

★ Responsibilities – use of the premises and associated obligations

Inclusions – what does the ‘rent a room’ in the beauty salon include?

Marketing – normally the renter is responsible for marketing their own business, rather than relying on the salon’s existing client database

Client Contacts – who owns the client database, and what happens when they leave

Records – record of sales (e.g. receipts) to make sure they are paying you the right amount

★ Termination – how can either party terminate the agreement?

Dispute Resolution  – process to deal with disputes

 

How much does it cost to Rent A Room in a beauty salon?

There a few different ways you can charge for renting a room in a salon:

  1. Fixed Rent – the renter pays a set amount per day/week/month
  2. Percentage Commission – the salon owner takes a cut of the renter’s total revenue from clients
  3.  Combination – the salon charges both fixed rent AND a percentage of revenue from the renter

We have included all of these options in our template. You just need to choose the one you want to use.

The actual amount you charge depends on what you negotiate and what both parties consider to be a fair amount which you agree on.

 

How do payments get processed?

A freelancer should always have their own payment facilities to take payments directly (such as a Square Card Reader or EFTPOS machine).

From a legal point of view, it’s important to have separate bank accounts and payment records.

 

Can I customise the inclusions?

Yes you can. We have included a checkbox format for inclusions so you can mark what is included in your agreement and add any extras if you need to.

 

How do I work out who pays for marketing?

We have included a marketing clause in the contract.

Normally the renter is responsible for marketing their own business, rather than relying on the salon’s existing client database. If you have complimentary businesses, you might decide to share marketing expenses or cross-promote to clients. You could even come up with a package deal for both!

 

How do I make sure the renter doesn’t underpay me?

We have included a clause in the contract for record-keeping. The renter is required to keep accurate records of all sales.

You can request to see a record of sales (e.g. receipts) to make sure they are paying you the right amount. If they have been underpaying you, you can demand payment of the unpaid amounts.

If they fail to pay, you are within your rights to terminate the beauty room rental agreement.

 

Can I use this template for a Rent A Chair arrangement?

This template is suitable for a beauty room to rent in beauty salons, nail salons, tanning salons, hair salons, day spas, massage parlours and tattoo studios.

If you want to rent out a chair or booth in your salon or barber shop, we have a separate Rent A Chair Agreement template for sale in our Shop.

 

Pros and Cons

The pros – as a salon owner, you can save money by not having to pay employee entitlements such as sick leave, annual leave, maternity leave or superannuation. In fact, they pay YOU to be in your salon…

If things don’t work out, it can also be easier to terminate the agreement (although this will depend on your individual circumstances).

The cons – It is important to remember that your Independent Contractor, at the end of the day, is running THEIR own business. They may be competing with your salon, and you have little control over their actions because they don’t work for you!

Even though they don’t work for you directly, their appearance, professionalism and quality of work still reflect on you because they are working out of your salon space.

 

Is this only for Beauty Salons?

This template is perfect for any of these businesses where the owner wants to ‘Rent A Room’:

★ Nail Salons

★ Tanning Salons

★ Hair Salons

★ Day Spas

★ Massage Parlours

★ Tattoo Studios.

★ Waxing Salons

★ Laser Hair Removal Salons

★ Eyebrow and Lash Bars

★ Body Piercing Studios

★ Dermal Therapy Clinics

 

Differences between an employee and a contractor

Whether you are an employee or a contractor depends on many different factors.

Independent contractors generally:

🔹 work for themselves and are their own boss

🔹 are free to accept or refuse work

🔹 control their own working times

🔹 provide their own tools and equipment

 

Employees generally:

🔸 work in someone else’s business

🔸 are subject to controls on how, where and when they do their work

🔸 are paid a wage

🔸 receive employee entitlements, such as sick and annual leave

 

Any other requirements?

Contractors are self-employed individuals or companies. To legally operate as a contractor in Australia you need to register for a Tax File Number (TFN), Australian Business Number (ABN) and in certain circumstances you need to register for Goods and Services Tax (GST).

 

Still not sure about the difference?

We recommend you visit the Fair Work Ombudsman website to read more. If you’re an employer, visit the ATO’s website to learn the tax and super obligations for both employees and contractors, and read more about the differences between them.

 

What is sham contracting?

sham contracting arrangement is when an employer attempts to disguise an employment relationship as an independent contracting arrangement. This is usually done to avoid paying employee entitlements. Even if you make an innocent mistake, you can still be fined!

If you’re convicted of sham contracting, you could be hit with a fine of up to $12,600 as well as back-payment of wages and entitlements.

This agreement makes it crystal clear that you have a true Independent Contractor arrangement.

 

Is this Beauty Salon Room Rental Agreement template legally binding?

Absolutely!

All of our templates have been drafted by qualified Australian lawyers who hold an Australian legal practicing certificate.

We are affiliated with a commercial law firm based in Sydney.

Who is this for?

★ Beauty Salons

★ Nail Salons

★ Tanning Salons

★ Hair Salons

★ Day Spas

★ Massage Parlours

★ Tattoo Studios

★ Waxing Salons

★ Laser Hair Removal Salons

★ Eyebrow and Lash Bars

★ Body Piercing Studios

★ Dermal Therapy Clinics

Why You Need This

Set your business up for success

Our Beauty Salon Room Rental Agreement template will help to ensure clear communication and defined responsibilities for all parties

Clearly set out the terms of your agreement

Lay the foundations for your business relationship so everyone is clear on their obligations and how the relationship will work.

Deal with Disputes

Your agreement covers different situations and how to handle them –  it will help to avoid disputes in the future.

Protect your business and assets

As the old saying goes, hope for the best and prepare for the worst.

You never know what will happen in the future, but it is vital that you have a contract in place to protect everything you have worked hard for.

How does it work?

Our process is designed to be as easy as possible – you could be up and running in as little as 5-10 minutes.

1.  Select the Beauty Salon Room Rental Agreement template from the Shop  and click Add To Cart.

2.  Proceed to Checkout and complete your purchase.

3.  You will receive an email with a download link immediately after you have completed your purchase

4.  Open the document in Microsoft Word and complete the highlighted fields with your personal information (name, ABN etc). Your document will be ready to go in minutes!

FAQ

Can’t I just copy this contract from another website?

Don’t do this.

1. This is copyright infringement and is against the law.

2. You might accidentally copy terms and conditions from another country – if you end up in court for some reason it might be on the other side of the world!

3. It won’t be customised to YOUR business. Not a good look for your customers if your info about your services is wrong…

 

Is this template editable?

Yes, the template comes in Word format so you are free to make changes to the document.

However, we do not recommend you make changes outside of the fields we have highlighted in the document. The clauses and wording have been written by a lawyer for a good reason. Deleting clauses or modifying them can affect the legal protections contained in the document.

 

What if the law changes?

If the law changes, we’ll email you with the changes and updates to add to your existing templates. So please ensure you keep us updated if your email address changes.

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