5 Moments to call in a Lawyer for your salon

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Posted July 13, 2022

Legal advice may sound like yet another expense for salon owners to wear as “the cost of doing business”. However, seeking legal advice in key moments in your business can be the difference between

 

1. Signing a lease agreement
   

   As we all know, commercial leases are far more complex than residential leases. Not only is it a serious financial commitment, but there are often complex negotiations and strict terms to your lease. A lawyer will ensure that you sign the right kind of lease (is it retail or is it commercial?) and can you abide by the terms of said lease. They will help you negotiate strategically with the landlord, ensure the lease agreement reflects what you have agreed and probably suggest some insurance for the life of the leasing period. All this advice is invaluable to ensure you clearly understand your rights and obligations under the agreement you are signing.

 

2. Starting a rent-a-chair agreement
   

   Rent-a-chair agreements continue to be a popular way to add a little extra to your business bottom line, add a bit more personality into your salon and keep you looking busy. If done well it can be a win for both salon owners and stylists – but if poorly set up, it can be a legal minefield. The most important part of a rent-a-chair system is the legal agreement itself – and this is where we would advise you to speak to a lawyer. This document includes details of income split, the nature of the working relationship and requirements and obligations of both parties. Each rent-a-chair agreement is unique to your circumstance, so having a lawyer to review the agreement and advise on the technical aspects is key to success. If the agreement is not properly drawn up, the person renting the chair may be deemed as an employee and the salon owner can become liable for all employment related entitlements, like tax and superannuation. We encourage all our members to exercise extreme caution in this area to ensure you don’t leave yourself exposed legally.

3. Signing a business loan

   Whether it’s a business loan for the start of a new business, to tide you over in challenging times or for the purchase of new equipment, there may be many reasons salon owners would look at taking out a business loan. But you should never consider one without getting appropriate advice first. Lawyers can advise you on interest rates, pre-payment, or events of default, advising you of your obligations to the lender and ensuring you understand exactly what you’re agreeing to. You do have rights and obligations to the institution providing you with credit, so it’s important that you enter into an agreement that protects the interest of both parties.

4. Defamation

No-one likes to see someone else’s name dragged through the mud – but often, as we work in personal services and our clients take this very personally, we can get negative reviews online. Where this tips over into defamation is when the claims escalate beyond a snippy Google review and escalate into defamation is one where an attack begins on your personality, character, beliefs, personal choices, or mental stability and has no grounding in fact. If this happens, and we have seen it, you want to get advice on your legal course of action. Written, spoken or published comments can all be defamatory, and it’s important to seek advice on these matters to ensure that it doesn’t drag your business or your family down with it.

 

5. Selling your salon
   

   We are aware that several our members are considering selling their salon or getting out of the industry entirely – and while we don’t want to see you go, we understand that for many business owners this is the best way to realise the capital they have built in their business over a lifetime. In that process, you want to take care of each element of your business, including your employees, your equipment, and your intellectual property. A lawyer can advise you carefully on drawing up a sale of business agreement, transfer of your business name and intellectual property transitioning your employees, equipment and assets to the new owner and ensuring that there are no loose ends. This is not the area for DIY, it’s incredibly important to make informed choices on what may be your last activities as a business owner.

 

HABA recommends engaging a lawyer as early in the process of any of the above scenarios as you possibly can to ensure that you are adequately protected and aware of your obligations to other parties in any agreement.

 

There are two key areas that HABA members benefit from NOT having to call a lawyer over. That’s contracts, including wage rates and contract templates; and WR representation. Both are handled on behalf of HABA members by our workplace relations specialists at Ai Group. While we can’t help with a few the key items above, and we do recommend having a business lawyer on hand to help with those, we can help you manage the legalities around you team effectively.

 

Further advice or assistance

For further advice or assistance on this topic, or any workplace relations matter, please #AskHABA by calling the HABA Advice Line on 02 9221 9911 8:30am-5:30pm AEST Monday to Friday