Booth Rental Agreement Forms Explained

Renting a booth in a salon can be exciting, but it’s important to have a clear agreement in place. A booth rental agreement makes everything official and helps avoid misunderstandings.

The agreement explains how long the rental lasts, how much it costs, and when payments are due. Every agreement is different, but we’ll cover the basics and share an example made with Vagaro’s forms.

Why You Need a Booth Rental Agreement

In the U.S., a booth rental contract is needed for cosmetologists to establish themselves as independent contractors with the IRS. Moreover, it establishes a framework for how business is done, promotes transparency, and fosters a harmonious working relationship.

It also:

• Demonstrates professionalism on the part of both owners & booth renters
• Prevents misunderstandings or disputes over rent, lease duration, operating hours, and other details
• Legally protects salon owners and booth renters by clearly defining the terms of their arrangement
• Prevents disputes over who is responsible for the cost of repairs or damage to the rented space
• Protects salon owners and renters in case of accidents or liability claims (by requiring liability insurance)
• Protects a salon’s client base (through a non-compete clause)
• Serves as a reference point for resolving issues through legal means

Remember that in the U.S., rules around booth rental agreements can vary by state. For example, in some states, cosmetologists must have a booth rental and operator's license. While in others, cosmetologists must have an independent contractor license. Then again, several states do not allow the booth renting model at all¹. Do your research to ensure that you follow local and state laws.

Also pay close attention to the language used in your rental agreement. It should be clear and unambiguous. Vagaro’s booth rental agreement form template was drafted by the company’s legal team for its users’ safety and assurance.

A booth renter's contract is easier to visualize with...an actual visual. So, we've provided a sample booth renter's agreement below.

Booth Renter Agreement Form Sample

Here is a PDF sample of a booth rental agreement made using Vagaro’s booth renter agreement form template for reference.

The image above is an example of page 1 of our 5-page sample booth renter's contract. Yep, five pages. Remember, this is not an exhaustive example of everything that can be included in your agreement, as there can be many components. We'll explain them in detail below, with special attention to some of more legally-oriented sections.

Booth Rental Agreement Sections

While they all share similarities, no two rental agreements are exactly alike. Certain sections common to all booth rental agreements, such as those outlining conditions of termination, may have only slightly different language. Meanwhile, other sections, such as those outlining certain insurance obligations, non-compete clauses or even maternity leave, are technically optional.

So, let's cut through all that Legalese and get to the heart of what the sections in the booth renter's agreement above mean, and why they're important:

Contact Information

Just the facts here. The opening part of your salon’s booth rental agreement identifies the:

• Date of the lease agreement
• Legal name, address & contact info of salon owner (the lessor)
• Legal name, address & contact info of the salon
• Legal name, address & contact info of the booth renter (the lessee)

This is basic stuff—unless you’re managing a salon with 10+ renters to keep track of. Vagaro’s Rent Collection feature eases this potential headache by automatically storing contact and payment information in employees’ profiles.

Premises & Booth Description

In this section, you’ll restate the leased premises (the salon’s address), and then describe the specific booth or station that is being rented. This includes the square footage of the booth/station, what it will be used for (hair service, etc..) and its location within the salon.

Term of Lease

Also referred to as Type, or, Period of Lease, this section clearly states the lease’s start date, its length, basis (fixed, month-to-month, week-to-week, etc.) and conditions for ending the rental agreement, i.e., a 10-day written notice from either the lessor or lessee.

Rent Amount & Payment Terms

In this section, you’ll state the amount the renter must pay and the exact due date, e.g., “the first Tuesday of the month.” Also, specify the method of payment, e.g., cash, check, electronic transfer, etc. You can split Amount and Payment Method into two sections if you wish. When choosing a payment method, however, we suggest going digital, as it saves a lot of paper—and time.

Additionally, while one payment method is preferable, we suggest having a backup method available. Vagaro users can set primary and backup rental payment methods using the Rent Collection feature. This adds protection against missed or failed payments. It also gives them the choice to deduct product commissions from booth rent. If exercised, this choice is outlined in the booth rental agreement form.

Security Deposit

If applicable, list the amount of the security deposit required (typically one month's rent). Clearly explain the conditions under which this deposit may be withheld or used (e.g., for unpaid rent or damages) and the process for its return at the end of the lease.

Utilities & Expenses

Specify whether the rent includes utilities such as water, electricity, and heating. Clarify any added expenses or fees the booth renter is responsible for, such as cleaning supplies or business insurance.

Condition of Space

This section states that the lessee acknowledges and accepts the present condition of the rented space.

Use of Space

For this section, you must clearly define how the booth or station can be used. Outline any restrictions on the types of products, services, or equipment that can be used within the space. For example, specify if hair color products must be approved by your salon.

Operating Hours

Clearly state the hours during which the booth renter can use the space. This may align with the salon's business hours or provide flexibility for booth renters to set their own schedules.

Maintenance & Repairs

This section explains the responsibilities of both parties regarding maintenance and repairs. Typically, the salon owner is responsible for structural and common area maintenance, while the booth renter handles maintaining their rented space.

Taxes

This section explains the obligations of the salon owner and booth renter regarding the payment of taxes related to the booth rental arrangement.

Property, Casualty & Liability Insurance

Specify whether the booth renter must maintain liability insurance and provide proof of coverage. This section usually identifies that the lessor (the owner) has insurance covering the business’s assets but is exempt from covering losses of the lessee’s personal property. Outline the minimum coverage requirements, if applicable.

Indemnity

This section is designed to protect the salon owner from potential financial harm or legal consequences resulting from the booth renter's actions. It outlines the responsibilities and liabilities of the booth renter about indemnifying, or compensating, the salon owner for certain actions, claims, or losses that may occur during the lease agreement.

Default by Lessee

This section outlines the situations and consequences that can occur if the booth renter (lessee) does not meet their obligations under the agreement. This section protects the salon owner's interests and ensures that the lease terms are upheld.

Severability Clause

This section addresses what happens if one or more provisions of the agreement are found to be invalid, unenforceable, or illegal. It protects the overall enforceability of the agreement and ensures that the remaining provisions stay in effect even if some are deemed invalid.

(Mandatory) Arbitration

This section outlines the process by which disputes or claims between a salon owner and renter will be resolved through arbitration rather than through traditional litigation in court. Arbitration can be a faster, more cost-effective alternative for resolving disputes.

Assignment of Rights

This section describes the circumstances under which either the salon or renter may transfer or assign their agreed-upon rights, duties, or interests to another party.

Rules & Regulations

This section details the salon's specific rules and regulations that the booth renter must follow. This may encompass sanitation protocols, dress code or client scheduling policies, to name a few.

Renewal & Rent Increases

If applicable, outline the process for lease renewal and any provisions for rent increases. Specify the notice period required for changes in rent or lease renewal.

Non-Compete Clause

A non-compete clause is not required but can help a salon owner protect their client base by restricting a booth renter from running a similar business within a certain radius of the salon during or after the lease term.

Governing Law

Statement clarifying that the Agreement will adhere to the laws and regulations of your state.

Modification of Agreement

This section describes the process and conditions under which changes or modifications can be made to a booth rental agreement.

Entire Agreement

This section essentially just confirms that the booth rental agreement represents the complete and final understanding between the salon owner and the booth renter.

Signatures

Remember to keep a copy of the signed booth rental agreement form for reference throughout the lease term. Rental agreements made using Vagaro can be stored securely in an employee’s profile and easily accessed at any time by both lessor and lessee for reference.

Appendices or Attachments

If necessary, attach added documents or schedules, such as an inventory list of equipment provided by the salon, a list of approved products, or a copy of the salon's policies & procedures handbook.

A professional, fair and legally binding booth rental agreement should never be an afterthought for stylists or salon owners. It's also crucial for both the salon owner and booth renter to thoroughly review and understand the terms of the agreement before signing. Legal counsel may be advisable to ensure that the contract follows local laws and protects the interests of both parties. Among other things, Vagaro’s Rent Collection feature supplies an easy-to-use, customizable booth rental agreement form template. It’s one (big) way Vagaro helps you detangle the knots of running a business. Don’t take our word for it—take your 30-day FREE trial, instead, and experience it for yourself!

Sources: https://www.cosmetology-license.com