Input needed regarding booth renter

I work at a med spa that recently decided to rent out one of our treatment rooms to an esthetician. It will be a monthly rate, the esthetician has the option to use the backbar product the business has been using on clients and retailing, or bring in her own. Our question is...we have an established database of clients which have been seen by our on-staff esthetician who is an employee, and they will mainly continue to see her. However, if they decide to schedule with our booth renter, the Dr. wants a commission split on the treatment rate. Does this sound reasonable? I've never worked in this capacity before so I am unfamiliar with how it should work. Any suggestions/ideas?

Thank you!

Tags: booth, contract, med, renter, spa

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Replies to This Discussion

Permalink Reply by Cindy Greenwood on November 20, 2013 at 3:45pm

I don't think that's particularly ethical when they are already getting paid via her rent.

No "double dipping"! LOL

Permalink Reply by Relax & Rejuvenate on November 20, 2013 at 3:57pm

She renting a booth/space, not a client list

Permalink Reply by coldsalineplexus on November 21, 2013 at 9:24am

You know, I don't think it's really an ethical issue when informed adults run through all the "what if" scenarios and still decide to sign a contract together.  I think it is more of a negotiation scenario.  If she's renting space, that's one thing.  If she is being fed clients, that's a different value proposition.  It can be reflected in the rental rate, or added as a separate fee, but it does change the relationship from straight rental to more of a business collaboration, so I think the key thing is to run through all the scenarios and negotiate.

Permalink Reply by Tammi Harriss-Halim on November 23, 2013 at 9:54am
The following is simply my opinion: a booth renter leases her space and runs her own business. Carries her own insurance, and supplies everything herself. Pays her own taxes....etc. Its hers. If she does not have the ability to purchase her own retail products, the Dr can provide them however the Dr would be entitled to the profits, not the services. If she is able to provide her own retail.... All profits are hers. If thats not suitable to the Dr then they shouldnt rent the space. Owning yur own business is just that, owning it. Now if the Dr is supplying the clients, I can see a small commision on the Drs existing clients, but not the clients she brings in. She should advertise and network to build her own clientele to where the Drs clients she the employed esti.
Permalink Reply by Samantha Maline on November 23, 2013 at 10:56am
Sometimes when you rent a business location, for example a mall, you are required to pay a percentage of your profits. So it's reasonable to require a base rent and then a profit percentage from a renter.
Permalink Reply by Gretchen Klein on January 13, 2014 at 12:40pm

I'm not sure I understand why the Dr. would also rent, it confuses everything.  I work on 50% commission, if there is advertising and discounted prices I also take the hit, but feel that is a fair trade for my employers efforts to gain business.  She also provides all back bar and I'm very careful not to be wasteful.  I also help in other areas of the office, ie: mailings, laundry, etc.  I only get paid when with a client.  This brings down my per hour productivity but is still a fair wage.  Hope this has helped...

Permalink Reply by Sandy Defilippi on January 13, 2014 at 2:12pm
I think that the doctor is not doing good business. It doesn't make any sense that he rents the room to another esthetician when there is one already. Unless the Esthetician has her own clientele, maybe the doctor should pay her per treatment if she uses your established clients.
Permalink Reply by Anzhela Savina on January 13, 2014 at 12:50pm

Hello , Kristen !
I have the agreement with med spa , and my spa working the same . 

Permalink Reply by Deborah Merhar on January 13, 2014 at 1:23pm

I personally would not do it without a clear understanding of what is expected of you.  If you are paying rent, they should send the overflow to you without charging you.  If they want a commission, I certainly would not do 50/50.  50/50 is a commission rate where you have no expenseses.  You will still be paying rent and paying for you products you use.  Will they want a split everytime this client comes to see you?  A one time fee?  You need to get this settled before you move in.

Permalink Reply by Robin Willoughby on January 13, 2014 at 4:39pm
At first when I read this my first reaction would be absolutely not to the Dr. Receiving a commission. Then I thought about it and there are a few things to consider. Like previous response stated (relax & rejuvenate) it's about keeping the customer happy. 1st consideration, is booth renter charging LESS than Dr.'s office Esthetician or more? Typically I would think slightly less, with that said then Dr.'s office should charge client and pay Esthetician a commission NOT other way around. In fact I would say, as a Spa owner/renter of booths I would recommend not involving client at all with confusion of payments and keep it the same for her/him.
As far as back bar, if Esthetician uses her products for back bar (different then that of Dr office) what about retailing, does that mean you will let her retail as well? Or you will (the office) will want to retail to her clients and pay her a commission on sales...lots to think about when renting a booth.

I know it's a much delayed response to your question but maybe some else will benefit from my advice/opinion!
Permalink Reply by Barbara Van Erp on January 13, 2014 at 6:22pm

Hello,

Is your employee paid on commission?  Or are they paid a salary?  Who collects the money?  The booth renter has to set her own prices and collect the money and then pay you a commission.  Be careful with labor laws in your state.  Having an employee and a booth renter doing the same job, in many states is illegal.  I would check with salons in your area because they are more familiar with those types of issues.  If I were the current esthetician I might not be very happy because she is going to loose clients to the booth renter at times.  It may be "reasonable" in theory, but it can have it's problems. 

Permalink Reply by Irene Brandle on January 13, 2014 at 6:54pm

An employee commission based vs. a booth renter is completely different. In my opinion, if the booth renter chooses to use the back bar product, then this should be all stated in the contract. Renting a space to a renter is a profitable revenue to the office space and if the owner wants to have limitations to how a renter needs to make a living," considering a split commission on current client data bases, then the RENTER has a lot to think about.

Having your own business in a rental space, and using your own products is your is best. However, if you do not have your own clientele, and the facility is an operation that has an existing database, they are also benefiting you to work on your own retention.

I could be unethical to say "a client will see who they want to see" but the reality is, it's factual.

Have everything stated on a renters contract along with all the other logistics and the hard part is making a choice.

Good Luck!

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