Creative HEAD May 2017

THE PROS
AND CONS
OF CHAIR
RENTING
TO RENT OR NOT TO RENT – THIS IS WHAT WAS ASKED DURING A LIVE PANEL
DEBATE AT SALON SMART AND IT DIVIDED PANEL AND AUDIENCE ALIKE. 3•6•5’S
KEN WEST WAS ON THE PANEL AND SEEKS TO SHED SOME LIGHT ON THE SUBJECT
AT 3•6•5 WE HAVE always believed
employing your team is the best way to grow,
motivate and create the right salon culture.
Our programme and systems are designed
to ensure that a salon’s business is built on a
sound financial structure that supports this
model. However, we know that our industry
is going through a period of reinvention
with some salons now considering various
self-employment models. This is why 3•6•5
worked on a White Paper with the National
Hairdressers’ Federation on the pros and cons
of having stylists operate as self-employed
‘chair renters’ within your business. Here you
will find a summary of the White Paper.
First, do the numbers. Look at where you
could save. If you have renters, you won’t
have to pay employers National Insurance
Contributions or pension contributions.
ASK YOURSELF IF THE VARIOUS
MODELS WOULD WORK FOR YOU:
• Licence fee: charge a fixed weekly
or monthly rent.
• Service charge: take a percentage
of the chair renter’s takings to cover
services provided.
• A mix of both.
LICENCE FEE MODEL
This will provide you with a steady income no matter how many clients your
chair renter looks after. However, if they prove to be busy, you may feel you are
losing out on extra income as you won’t receive a share of their takings.
SERVICE CHARGE MODEL
If your chair renter is not as busy as you’d hoped, takes long holidays or are
taken ill, you could lose out as this is not a fixed income stream.
LICENCE AND SERVICE MODEL
This model guarantees a lower fixed income from the licence fee, but also
provides you with a percentage of the chair renter’s service charge. As their
takings contribute to the salon’s turnover, it encourages chair renters to work
longer hours in order to keep a higher percentage of their turnover.
LOSS OF CONTROL
However appealing any savings and steady income streams may seem, you
will be sacrificing an awful lot more within your business – namely control
over the client experience and your brand. Chair renters run their own
business and their clients are theirs, not yours. They are responsible not only
for registering their business, but they must also have their own insurance as
well as display a notice giving their name and registered company address.
You also need to be crystal clear on how takings are collected and
distributed. All money received from clients is the property of the chair renter,
even if it is collected centrally. If money is collected centrally, it must be
handed over to the chair renter or paid into the chair renter’s bank account.
There is no right or wrong answer, but weigh up the pros and cons for your
business before making an informed decision.
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CREATIVE HEAD