Commercial Lease Clauses For Hair Salons

A hair salon commercial lease should do more than give you the keys. It should clearly allow you to run a salon, protect the money you spend on your fit out, and deal with the practical things that make a salon work, like water access, plumbing, signage, chemicals and chair rental.

The tricky part is that many leases are drafted for general retail or office use. A hairdresser premises lease can look fine at first glance, but still leave you exposed if it doesn't match how your salon actually operates day to day.

If you're negotiating a salon lease agreement in Australia, the goal is to spot the legal and commercial risks before you commit, not after you've ordered chairs, basins and colour stock.

What Should A Hair Salon Commercial Lease Cover?

Your lease should cover the premises, rent, term and outgoings, but it also needs salon-specific terms that support how your business will actually run.

At a minimum, check that the lease deals with:

• Permitted use: hairdressing, barbering, beauty services, retail product sales and any treatments you plan to offer.
• Fit out works: basins, plumbing, mirrors, chairs, reception desks, lighting, flooring, ventilation and storage.
• Water and drainage: reliable hot and cold water, drainage points, water pressure and any trade waste requirements.
• Signage: shopfront signs, window decals, illuminated signs, directory boards and shopping centre signage rules.
• Chemical storage: colour, bleach, peroxide, aerosols, cleaning products and waste disposal.
• Chair rental or room rental: whether you can license space to other hairdressers, barbers, brow artists or beauty therapists.
• Make good: what you must remove, repair or reinstate when the lease ends.
• Assignment: whether you can sell your salon business and transfer the lease to a buyer.

These clauses matter because a lease is usually one of your biggest fixed commitments. If the wording is too narrow, you may be paying for premises that don't legally or practically let you operate the salon you had in mind.

Say Mia signs a lease for a small salon in Parramatta. The premises look perfect, but the lease only permits hairdressing services and says no subletting or licensing without the landlord's consent. Six months later, Mia wants to add a brow technician in the back room and rent one chair to a senior stylist. Without the right lease wording or landlord approval, she may be breaching the lease even though the arrangement makes good business sense.

Is A Hair Salon A Retail Lease In Australia?

It depends on your location and the type of premises, but many hair salon leases in Australia are treated as retail leases.

Each state and territory has its own retail leasing legislation. For example, New South Wales has the Retail Leases Act 1994 (NSW), Victoria has the Retail Leases Act 2003 (Vic), and Queensland has the Retail Shop Leases Act 1994 (Qld). These laws can apply to shops that provide services to the public, including many hair and beauty businesses.

If your lease is a retail lease, you may receive extra protections that don't usually apply to ordinary commercial leases. Depending on your state or territory, these can include:

• a landlord disclosure statement before you enter the lease
• rules about outgoings and estimates
• limits on certain lease costs being passed on to you
• requirements around rent review clauses
• access to retail lease dispute processes, often through a small business commissioner or tribunal

The timing and detail of disclosure statements differ across Australia. For example, some states require disclosure a set number of days before the lease is entered, while others have different processes for renewals and assignments. If a landlord hasn't given you the right documents, get advice before signing or paying significant money.

Retail leasing rules can also affect your ability to recover fit out costs, negotiate incentives and challenge unclear outgoings. This is one reason salon leases shouldn't be treated as a simple formality.

Does The Lease Clearly Allow Your Salon Services?

It should, because the permitted use clause controls what you're allowed to do from the premises.

A narrow permitted use clause can quietly limit your revenue. A clause that says hairdressing only may not cover:

• barbering
• nail services
• brow or lash treatments
• facials or skin treatments
• spray tanning
• retail sales of shampoo, tools and styling products
• training workshops or hair education nights
• mobile bookings managed from the premises

If you run a modern salon, you might need flexibility. Even if you're starting with cuts and colour only, you may want to add beauty services, sell products online, host events or rent a treatment room later.

It's usually better to negotiate a broader permitted use upfront, rather than asking for a variation after you've signed. A practical clause might allow hairdressing, barbering, beauty and related personal care services, plus retail sale of associated products, subject to any licences, approvals and shopping centre rules that apply.

You should also check any exclusivity clause. If you're in a shopping centre or strip of shops, you may want protection against the landlord leasing the neighbouring shop to a competing salon. Landlords don't always agree to exclusivity, but it can be worth asking, especially if your business relies heavily on local foot traffic.

What Lease Terms Matter For Water, Plumbing And Fit Out?

The key lease terms are the ones that confirm what services are available, who approves works, who pays for upgrades and what happens if the plumbing fails.

Salon fit outs are different from many retail fit outs. You're not just adding shelves and a counter. You may need basins, drainage, hot water systems, electrical upgrades, special lighting, mirrors, wash stations, washing machine connections and extra ventilation.

Water Access And Drainage

Your lease should make it clear whether the premises have suitable water services for salon use. Ask practical questions before you sign:

• Are there enough water points for the number of basins you need?
• Is the water pressure suitable during peak times?
• Is there enough hot water for colour processing and back-to-back appointments?
• Will you need a larger hot water system?
• Are drainage points already approved and compliant?
• Does the local council require trade waste approval?

If these items aren't clear, you could end up paying for expensive upgrades or discovering that the premises can't support your planned layout.

Fit Out Approval

Most leases require landlord consent before you do works. For a salon, that consent should be detailed enough to cover the fit out you actually need.

Check whether you need approval from:

• the landlord
• the shopping centre manager
• the owners corporation, if the premises are in a strata building
• local council
• a private certifier or building surveyor
• specialist contractors for plumbing, electrical and fire safety works

You should also check whether the lease requires you to use the landlord's nominated contractors. That can affect timing and cost, especially in shopping centres where works may need to be done outside trading hours.

Fit Out Incentives

Some landlords offer rent-free periods, contributions or reduced rent, sometimes under a fit out agreement, while you complete your fit out. If you negotiate an incentive, make sure it's written into the lease or a separate incentive deed.

Also check what happens if the lease ends early. Some incentive clauses require you to repay part of the incentive if you default or assign the lease before a certain date. That may be reasonable in some deals, but you should know the risk before signing.

Who Pays For Salon Fit Out, Repairs And Make Good?

The lease should clearly say who pays for what, because fit out, repairs and make good are common sources of disputes at the end of a salon lease.

In many commercial leases, you're responsible for your own fit out, internal repairs and damage you cause. The landlord is often responsible for structural repairs and building services, but the exact position depends on the wording.

For a salon, pay close attention to:

• Plumbing repairs: who pays if pipes, drains or basins leak?
• Hot water systems: who owns the system and who maintains it?
• Air conditioning and ventilation: who services and repairs it, and how often?
• Flooring: who is responsible for staining from colour or chemicals?
• Electrical capacity: who pays if you need extra power points or upgraded circuits?
• Base building defects: what happens if an issue existed before you moved in?

Make good is the clause that tells you what you must do when you leave. This can be a big cost for salons because your fit out is often fixed into the premises.

A strict make good clause may require you to:

• remove all basins, chairs, cabinetry and mirrors
• remove plumbing you installed
• reinstate walls, ceilings and flooring
• remove signage and repair the shopfront
• repaint the premises
• return the premises to their original condition

That may not always be fair or commercially sensible. If the next tenant could use parts of the fit out, you may want the option to leave agreed items behind. At the very least, you should know what the make good cost could look like before you commit to the lease term.

Photos and a detailed condition report at the start of the lease can help. Without a clear record, you may struggle to show whether damage existed before you took over the premises.

Can You Put Up Signage And Store Hair Chemicals?

Yes, usually, but only if the lease, building rules and local requirements allow it.

Signage is a big part of a salon's street presence. Your lease should say what signs you can install and what approvals you need. This can include shopfront signs, blade signs, window graphics, A-frame signs, illuminated signs and shopping centre directory listings.

Some signs may also need council approval, especially if they're illuminated, large, fixed to the building facade or placed on public land. If you're in a heritage area or a strata building, extra rules may apply.

Chemical storage also deserves attention. Salons commonly store colour, bleach, peroxide, aerosols, disinfectants and cleaning products. Your obligations can involve work health and safety laws, fire safety rules, product safety information and waste disposal requirements. In practice, you should:

• keep current safety data sheets for chemicals used in the salon
• store products safely and away from ignition sources where needed
• make sure staff are trained to handle products safely
• check ventilation is suitable
• dispose of chemical waste properly
• avoid storing items in common areas unless the lease allows it

Work health and safety is regulated at state and territory level, with regulators such as SafeWork NSW, WorkSafe Victoria and Workplace Health and Safety Queensland. The lease won't replace your WHS obligations, but it shouldn't put you in a position where you can't meet them.

Can You Rent Chairs Or Rooms To Other Hairdressers?

It depends on your lease, because many leases restrict subleasing, licensing and sharing possession of the premises.

Chair rental can be a great way to grow your salon income, bring in specialists and offer more services. But from a lease perspective, the landlord may see it as sharing the premises with another business.

Check whether your lease allows you to:

• rent a chair to an independent hairdresser
• license a room to a beauty therapist
• allow another business to operate under its own brand
• use contractors who take their own payments
• display another operator's signage or promotional material

If the lease says you need landlord consent, get it in writing before the arrangement starts. A friendly conversation with the centre manager may not be enough if there's a dispute later.

You should also think beyond the lease. Chair rental arrangements need careful drafting so it's clear who controls bookings, pricing, client records, payments, stock, equipment, insurance and cancellations.

There are employment law risks too. Calling someone a contractor or chair renter doesn't automatically make them one. Under the Fair Work Act 2009 (Cth), the real substance of the relationship matters, including control, hours, branding, financial risk and whether the person is running their own business. Sham contracting rules can apply if an employment relationship is dressed up as contracting.

If you want chair rental to be part of your model, it's worth getting the lease, any licence arrangement and your contractor agreement aligned from day one.

What Should You Check Before Signing?

You should check the lease against your actual salon plan, not just the rent and lease term.

Before you sign, work through this practical checklist:

• Tenant entity: Is the lease in your personal name, company name or trust structure? If you use a company, check the ACN and ABN details are correct.
• Personal guarantee: Are you being asked to personally guarantee the lease, and for how long?
• Security: How much bond or bank guarantee is required, and when will it be returned?
• Term and options: Is the initial term long enough to recover your fit out costs, and do you have options to renew?
• Rent increases: Are increases fixed, CPI-based, market-based or a mix?
• Outgoings: What exactly are you paying on top of rent, and are estimates provided?
• Trading hours: Do shopping centre rules require you to open at certain times?
• Insurance: What public liability, glass, plate glass, workers compensation and other insurance does the lease require?
• Assignment: Can you transfer the lease if you sell the salon?
• Default: What happens if rent is late or you breach a lease condition?

Templates and standard landlord leases often miss salon-specific issues because they're designed to cover many different businesses. A tailored commercial lease review can help you negotiate practical changes before you're locked in.

Also make sure your lease lines up with your other business documents. Your client terms, privacy practices, employment contracts, contractor agreements and salon policies should all support the same operating model.

Key Takeaways

• A hair salon commercial lease should clearly allow your services, fit out, product sales and future growth plans.
• Many salon leases are retail leases, which can give you extra rights under state or territory retail leasing laws.
• Water, plumbing, hot water, drainage and ventilation should be checked before you sign, not after fit out starts.
• Make good clauses can be expensive for salons, especially where basins, plumbing and built-in cabinetry need to be removed.
• Chair rental and room rental usually need lease approval and carefully drafted contractor or licence agreements.
• Signage, chemical storage and WHS requirements should be practical for how your salon operates day to day.

If you'd like help with reviewing your salon lease, negotiating fit out and make good terms, or setting up chair rental agreements, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.