Booth Renting 101:
A Guide for Owners and Renters
By Judiffier Pearson
There are two broad classifications of salon establishments in the beauty industry: payroll and non-payroll. Payroll salons are typically staffed with W-2 employees who are under the direct supervision of the salon owner/manager. Non-payroll salons generally rent work stations (often referred to as “booths”) to self-employed hairstylists, nail techs, barbers, etc. The owner/ manager essentially takes on the role of “landlord,” having no direct authority over the independent operations housed within the larger salon establishment.
Booth Rental Beginnings
Booth renting is a salon business model and practice that is over a century old, documented as early as 1916. In her book, On Her Own Ground, A’Lelia Bundles shares an excerpt of a letter written by her great-great-grandmother, Madame C. J. Walker. The letter was addressed to a perspective franchisee of ‘the Walker Salon System’ wherein Madame Walker recommended booth renting as a means to cover the salon owner’s overhead expenses.
While the booth rental model was once a widely respected and sometimes expected practice of the salon industry, it gained an unfavorable position towards the end of the 20th century. For years now, this model’s reputation has been shrouded by serious issues, such as a lack of structure, a lack of professionalism, discord in salons, and underreporting of income. These have resulted in the ban of the practice in many states. I believe that the problems do not stem from the concept of booth renting itself, but from its execution. While it’s true that this business model is not suited for everyone, those who use it (owners and renters alike) can achieve great professional and financial success if they understand how to properly execute a booth rental business system.
Understanding Booth Rental
One would think that a practice as old and widely used as booth renting would be well-documented and standardized. But it is one of the most misunderstood, misused, and abused practices today. The premise of booth renting is simple: the salon owner provides work space and amenities to beauty and barber technicians in exchange for rent. Each technician operates a business within a business. They are usually responsible for promoting their own services, building their own clientele, providing their own products, as well as handling their own accounting and employment tax obligations. It takes a disciplined, business-savvy person to make a booth rental operation successful. Oftentimes, cosmetologists and barbers who fail to have viable and lucrative careers have chosen the wrong work arrangement. A great stylist does not necessarily make a great businessperson. Sometimes the freedom to excel at one’s craft is worth giving up some control in the work environment. Any operator who finds him/herself in this situation should consider working as an employee with fewer administrative responsibilities. For the individuals who possess both technical and business skills, booth renting can be a rewarding career experience or a great intermediate step to full-scale salon ownership.
The Tenant-Landlord Relationship
The true spirit of booth renting is a tenant-landlord relationship. Any attempt to supersede the basis of this relationship with some other vision can be catastrophic, and in many instances—it is. Failure to respect the basic premise of booth renting is the number one reason why there is so much confusion associated with booth rental salons. Booth rental salon owners have a tendency to confuse their landlord role believing it to be something more than it really is; and booth renters almost never think of themselves as tenants.
Booth renters across the United States have very mixed thoughts about their role in the salon. Some consider themselves to be employees to the owner. Others regard their position much like a freelancer who comes and goes at will with no obligations whatsoever to management. The rest have a hybrid of viewpoints that fall between these two extremes.
Many booth rental salon owners are also confused, which perpetuates the confusion in this segment of the industry. They hold the power to end the chaos. It’s simply a matter of taking the time to research and understand the booth rental model and then implementing proper management systems that are congruent with that model. Success in booth rental management really is as simple as that!
Help is Here
In 2003, the first installment of the “Minding Your Own Business” series of books was published to address the shortage of pertinent business management materials specifically for the professional beauty industry. The latest “MYOB” book, “To Rent or Not to Rent: A Critical Analysis of the Booth Rental Business Model.” provides detailed information about current regulations regarding booth renting, as well as the roles, responsibilities and ethics that should be adhered to by salon owners and renters alike. You will find information on employment law and guidelines for owning and operating booth rental salons, mini-salon operations, as well as salon suites. This analysis will empower investors and salon professionals with the information that they need to determine whether or not this business model is compatible with their goals.
Make today the last day that you remain in the dark about how to properly run your salon operation. Stay connected and gets the tools that you need for success behind the chair and beyond!
Booth Renter Hot Topics: Part One
Booth Renter Hot Topics: Part Two
Booth Renter Hot Topics: Part Three
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Judiffier Pearson's Booth Renters Book Set: To Rent or Not to Rent