You’ve found the perfect location. Now comes the hard part: the commercial lease agreement. For most first-time barbershop founders, this document is a dense, intimidating stack of paper filled with legal jargon designed to confuse you. It feels like a final exam you were never given the textbook for.
This is by design. Landlords have the advantage because they understand these complex terms. But you don’t have to sign blindly. Understanding a few key concepts can shift the balance of power, saving you thousands of dollars and protecting you from devastating financial surprises.
This guide will translate the most important and confusing lease terms into plain English. We’ll explain the difference between a gross vs net lease, demystify the dreaded NNN lease, and expose the hidden costs lurking in CAM charges commercial lease.
The Big Picture: Who Pays for What? (Gross vs. Net Lease)
At the highest level, all leases fall into two main categories that determine who is responsible for the building’s operating expenses.
- Gross Lease: This is the simplest type. You pay one flat monthly fee, and the landlord is responsible for all other costs, including property taxes, insurance, and maintenance. While it offers predictable costs, it’s less common for standalone retail spaces like a barbershop.
- Net Lease: This is far more common in commercial real estate. In a net lease, you pay a lower base rent plus some or all of the building’s operating expenses. This is where things get complicated.
The Deep Dive: Understanding the Triple Net (NNN) Lease
When you see a space advertised, you will almost certainly be offered a NNN lease (pronounced “Triple Net Lease”). This is the industry standard for retail, and it’s critical you understand exactly what it means. The three “Nets” are the major operating expenses that you, the tenant, will have to pay a share of:
- Net 1 (N) – Property Taxes: You are responsible for paying a portion of the building’s annual property taxes.
- Net 2 (N) – Property Insurance: You pay a portion of the landlord’s insurance premium for the entire building.
- Net 3 (N) – Common Area Maintenance (CAM): You pay a portion of all costs associated with maintaining the shared areas of the property.
Under a NNN lease, your total monthly payment is your Base Rent + Your Share of the NNN expenses. This is why the advertised rent is never the full story.
The Most Important Clause: CAM Charges
Of the three nets, Common Area Maintenance (CAM) is the most important one to scrutinize. This is a bucket category that can be filled with all sorts of expenses, and it’s where landlords often hide unexpected costs.
CAM charges commercial lease can include:
- Landscaping, lawn care, and snow removal
- Parking lot maintenance, striping, and lighting
- Trash removal
- Security services for the property
- Exterior window washing
- Fees for the property management company
These charges can fluctuate significantly from year to year. A harsh winter could mean massive snow removal bills, or a parking lot repaving project could lead to a huge one-time assessment.
Your Action Step: Before signing, you MUST request a detailed history of the property’s CAM charges for the last 2-3 years. This is the only way to accurately budget for your true monthly costs. If a landlord is unwilling to provide this, it is a major red flag.
By understanding these core concepts, you transform the lease from a source of fear into a tool you can use to negotiate. You are no longer just a barber; you are an informed business owner ready to build your empire on a solid financial foundation.