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How much table/ booth rent is too much.

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  • How much table/ booth rent is too much.

    Greetings,
    I manage a grooming shop and also groom part time, For my management duties I am paid as w4 and for my grooming I am paid as an IC. I get 55% commission of what I bring in from grooming and about 9 dollars an hour for management of the shop. My duties in management mostly involves keeping 123pet up and running and also keeping track of commissions for the other 7 IC's we have. We have a large grooming shop that has been in business for 26 years with over 6500 regular customers. The owner was awarded the business as a result of his divorce. His wife previously owned and operated the business. He knew nothing about grooming so myself and 2 other experienced groomers helped him build the business back up over a 4 year period. All of our groomers do their own advertising and have their own dedicated clientele. It is not uncommon for all of us to be booked with 6-8 dogs a day for 2 weeks at a time.

    Now that you have the background here is the delima.

    The state just did an unemployment audit and also a insurance audit and decided we were misclassified as IC. The only way the owner feels he can fix the problem is by going to a table rent model which is a good thing for many obvious reasons. However the problem is he feels like he owns our clients, and has said that he will either make us employees " which if he did we would all leave, or hes going to charge us 2000-2400 a month for table rent. Which we all could afford to pay however we all are having the following problems with the table rent being so high.
    1- we have 2 new groomers with no clients and no experience, and because of that the owner only wants to have them pay a table rent of 800.00, so effectively we would be subsidizing an inexperienced groomers table rent for the privileged of having them groom our overflow customers that were too irresponsible to book ahead of time when they know how much our services are in demand. Add to this the fact that these 2 groomers dont do even close to the quality job we do which means an upset customer at some point.

    2- Our shop has about 50% of the space dedicated to self service and retail. We do hardly no self service maybe 400 a month total but have 5 self service stations. The self service pricing is about 30% of what we charge for an average full service groom. So again our table rents would be subsidizing space allocated for services that undercut/ undermine the services we provide.

    3- The owner has inflated his business expenses and wrapped a lot of his personal expenses " gas, cell phone, home internet, 3 car payments" into his base cost of operating the business monthly and on top of that has also added a 20% profit margin.

    4- We all own our equipment, tools, dryers, towels, and tables. so what are we really paying for. our shop is 2100SF and there are 8 of us that groom here. 2 of us work with assistants, we have to wait for tubs, and call cant blow dry at the same time without breaking circuits, answering the phone we have to go outside because we dont have a drying room and its non stop noise. We often run out of kennel banks for dogs.

    5- For me personally if i could earn 100% i would hire an assistant to bathe and rough for me and work towards a 12 dog per day average, however I cant do this because the building has no space to store these extra dogs and also there would be no extra space for my assistant to work within, so the problem I have here is i basically feel like with table rent im basically paying for the privdlige of taking off whenever I want to, add to this the cost of taxes, fees and insurance that we would have to pay.

    6- For 2000 a month I could partner with 2-3 other groomers and open a new facility, we could do daycare and boarding and not have the headache and actually get somewhere financially, or I could open a mobile grooming salons and easily service the payment and marketing fees with 2000.

    any advice.

  • #2
    Oh boy. What a mess. I was in the hair industry for years and even the nicest top salon booth rents were no where near 2000 month. This guy is nuts.

    I feel even going table rent is illegal in this situation and the owner has no choice but to go legal w2 employees and pay his fair share to the govt

    Sent from my SAMSUNG-SM-G935A using Tapatalk

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    • #3
      Table rent is illegal.

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      • #4
        I agree with Tom. As far as w2. It sounds like y all are grooming his client list , and tuning from his software .

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        • #5
          Table rent can be legal if done right but I have never seen it.

          Sent from my SAMSUNG-SM-G935A using Tapatalk

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          • #6
            Wife of an accountant here. Table rent is, contrary to any popular belief, absolutely legal. That said, there are requirements for it. One of those requirements is that each renter completely and totally runs their own business. That whole 'doing the overflow' thing is a no go and makes rental illegitimate. Being a rental space changes things for the owner in that their entire income skews over to rental income with a totally different basis. It kind of sounds like you are too wrapped up in your boss's business. It's really not anyone else's decision what he charges anyone for actual rent if he goes that way, although it sounds like he is looking to you for some advice. My neighbor charges station rent at a weekly rate for her hairdressers and it is nowhere near that much per month. Is he just maybe trying to reproduce his percentage income from each of you by charging so much? It is totally your business to decide if you want to work legally as an employee or pay what he is asking for rent or start your own business. If you have the wherewithal to rent a commercial space, can meet city and county codes and can personally guarantee whatever lease fees a commercial leasing agent would require, then it sounds like you are in a good place and have had some great on the job training to open your own business and even expand the services available at your current job. Then all these decisions can be yours!

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            • #7
              Table rent is legal at a Federal level, but in a few states it is way more regulated, and limited tightly. For example, in some states in a business all the pet groomers have to be on table rent, or all have to be W-2 employees, the same job description cannot be compensated by both options. So check your state laws, they crackdown far more than the IRS.

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              • #8
                I have been considering renting space to someone because I have a large place and could easily accommodate more groomers, but have no interest in employees. It would very much be here's your space and keys to the building. Bring your own phone, clients, equipment, products. I'm willing to provide towels and laundry service, space, utilities in exchange for rent. It seems so straightforward in my head, but the more I read on this subject, the more confused and less knowledgeable I become. One of these days I'm going to take a deep breath and approach my accountant about this, like knowing how to account for rent and what forms to file, does it affect my DBA status, and so on. I honestly probably leave a lot of money on the table with regard to how I run my business because I opt for the comfort of simplicity.

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                • #9
                  Why would you all leave if he made you employees? It's such a better option.

                  As far as the table rent, can't do it if he owns the clientele, and/or you're all doing an overflow thing. Separate business period. If some of you have assistants, that would then make YOU the employer.

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                  • #10
                    That's true like Cockerlvr said. It is one thing to rent a table to a groomer with their own clientele. But to rent tables to groomers who groom the business owner's dogs, nope that is an illegal situation, you are w2 employees then, clear and simple, black and white, no gray area.

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                    • #11
                      We have a reputable pet store that rents up to 3 stations for a long time. The groomers pay about $200 a week from what I hear. The store only collects rent and no money from grooming customers for grooming services. The groomers collect money for their grooms. The owner doesn't even keep a history of the customer's grooms, only their groomers do. Groomers must process debit cards or credit cards on their own, they cannot use the merchant system of the store. Groomers have to provide all supplies and have their own phones and insurance. They simply get the space, large equipment, water and electricity. So the pet store is not selling any grooming services, only the individual groomers do. Seems to work well.

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                      • #12
                        This whole thing is a mess, and the rent is ridiculous. I would avoid working with this person.

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                        • #13
                          Ask him if ANY hairdresser renting a station pays over $2000 a month, and if there is they are probably in Manhattan or something like that. Insane. I would move on as soon as possible. Sounds like a drag to work for.

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                          • #14
                            $500 a week? OMG

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