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Tips for Taking on a Hair Salon Lease

Everyone needs to get their hair cut now and again. So, if you know what you’re doing, there’s often good money to be made from setting up your own salon.

This of course means finding the right premises at the right price. It also probably means signing a lease. If you’re thinking about setting up a salon, here are a few important points you should be thinking about before signing on the dotted line.

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  • Is a Salon Lease the Right Option?
  • Sharing the Property
  • Permitted Use
  • Limited Company Tenant
  • Break Clauses
Setting up an independent hair salon is only one option for skilled hairdressers. Franchising opportunities are possible with hairdressing giants like Toni & Guy, offering greater security due to brand recognition and the level of support provided by the franchisor. Renting a chair in an existing salon and setting up as a mobile hairdresser are two other options that offer more flexibility and lower overheads. However, there are a number of reasons why hairdressers choose to open their own salons.

Firstly, there are downsides to being a franchisee, such as lack of real independence and constraints on how you develop the business. Mobile hairdressers, on the other hand, lack the kind of support they would get in a salon, both from staff and in terms of a guaranteed flow of clients, and also spend a considerable amount of time travelling to and from appointments.

For owners of independent hair salons, the possibilities for growing both the business and its profits are effectively unlimited. With the right location and attractive branding, footfall can lead to the acquisition of potentially long-term clients without any marketing cost. Taking over an existing salon can also give access to an established client base, which is likely to grow through word of mouth if the new owner’s development plans for the business are successful.

Disadvantages to opening a hair salon include lack of flexibility in terms of opening hours, the stress of being ultimately responsible for clients and staff, and, of course, the financial challenge of setting up the business and paying the rent every month. Assuming the project is affordable, most hairdressers will prefer to lease their own salon. We can advise on whether this is the best option based on an individual’s circumstances, as well as the potential pitfalls to avoid when taking on a hair salon lease.
It’s quite common for hairdressers and stylists to rent out individual chairs in their salons to other stylists as an alternative or additional way of generating income (more information here: Chair Rental Agreements). You might also want to provide manicures, pedicures, massages or beauty treatments to customers and to do this you may want to share a part of your hair salon with someone else who has the skills to provide these services.

If you’re thinking of doing any of this, then you will need to make sure that your lease specifically gives you the right to do so. Otherwise, you may find your landlord could simply block your business from growing as you want it to.
As we’ve seen above, hairdressers often grow their businesses by offering additional services that go well with hair cutting. Offering beauty treatments, pedicures, manicures and even massages and tanning are tried and tested additional services that could work in your hair salon. If this is a possibility, then be careful to ensure that your lease lets you do these things. Again, you don’t want your landlord interfering with your efforts to expand into other areas beyond hairdressing.
You should seriously consider setting up a limited company to sign the lease of your hair salon. That way, at least you should be able to sleep easy at night knowing that the most you can lose by signing the lease is whatever the company owns. Make sure you don’t personally guarantee the company’s obligations under the lease, as this defeats the point of having a company sign in the first place (ie if the company can’t pay then the landlord will simply sue you as the guarantor). If the landlord keeps pressing for a guarantee, try to appease him by offering a rent deposit (or an increased rent deposit if you’ve already offered a deposit). This tactic often works.
No matter how confident you are, if you’re setting up a new hair salon, there will always be the risk that the business just doesn’t work out in that location. To help minimise your losses should the business not go as you planned, you should always try to negotiate the right to end (or break) your lease relatively early (but not too early: you need to be there long enough to know for certain that things just aren’t working out). This way, at least you can escape from your lease without having to unnecessarily keep paying rent and rates for a hair salon you no longer want until the expiry of the lease term.

The above are only a small number of important points to consider before signing.

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Commercial Property Team:

Commercial Property Solicitor
James Edwards is a commercial property solicitor advising landlords and tenants on commercial leases. He also has experience in buying and selling businesses. Contact James for a free no obligation quotation today by phone or via our contact form.
Commercial Property Solicitor
Sophie McGregor is a commercial property solicitor working with James. She assists clients with all aspects of leases. Sophie has detailed knowledge of most types of commercial property transactions.

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