You’ve decoded the jargon. You know the difference between a Gross lease and a NNN lease, and you know to watch out for hidden CAM charges. You’ve done more homework than 90% of first-time business owners. But the standard lease agreement is not built for a barbershop.
Generic business leases overlook the unique operational needs and risks of our industry. Before you sign that document, you need to shift from being a student to a negotiator. There are four specific clauses that can mean the difference between a profitable first year and a catastrophic cash flow crisis.
Getting these right is not optional. This is where you fight for the terms that will protect your investment and set you up for long-term success.
1. The Money Clause: Tenant Improvement (TI) Allowance
- What It Is: A tenant improvement allowance (or TI allowance) is money the landlord gives you to help pay for the construction and build-out of your space. It is the single most important financial clause you will negotiate.
- Why It Matters for a Barbershop: Unlike a simple retail store, a barbershop has massive build-out costs. You need extensive plumbing for shampoo bowls, upgraded electrical systems for your stations, and specific ventilation. These are not minor cosmetic changes; they are expensive, foundational requirements. Without a significant TI allowance, these costs come directly out of your pocket, draining your startup capital before you even make your first dollar.
- How to Negotiate It: You cannot negotiate without data. Before you talk to the landlord, get at least two preliminary bids from contractors detailing the full cost of your build-out. Present this to the landlord not as a “wish list,” but as a necessary investment to make their space functional for a long-term, successful tenant. The strength of your business plan and the contractor bids will be your primary leverage.
2. The Competition Blocker: The Exclusivity Clause
- What It Is: An exclusivity clause commercial lease prevents your landlord from renting another space in the same property to a competing business.
- Why It Matters for a Barbershop: Imagine this: you spend a year building a loyal clientele, and then a high-end salon opens two doors down and starts offering premium men’s cuts. Suddenly, you are in a direct battle for survival on your own turf. An exclusivity clause protects you from this nightmare scenario.
- How to Negotiate It: Be specific. A weak clause that just says “no other barbershops” is not enough. What about a salon that does 40% of its business in men’s grooming? You need to define the competition broadly. A strong clause might state that no other tenant can derive more than 15% of their total revenue from men’s haircutting and grooming services.
3. The Revenue Expander: The Use Clause
- What It Is: The use clause commercial lease defines exactly what business activities you are permitted to conduct in your space.
- Why It Matters for a Barbershop: This is a classic trap. A landlord might provide a lease that says the space is “for use as a barbershop.” This seems fine, but a strict landlord could later argue that this prohibits you from selling products. Retail sales of pomades, beard oils, and shampoos are a critical, high-margin revenue stream. If your lease doesn’t explicitly allow it, you are leaving money on the table.
- How to Negotiate It: This is usually a simple fix, but it’s non-negotiable. Ensure your use clause states that the premises can be used for “a barbershop and for the ancillary sale of grooming products, apparel, and related merchandise.”
4. The Exit Strategy: The Lease Assignment Clause
- What It Is: The lease assignment clause governs your ability to transfer (or “assign”) your lease to another person, which is critical if you ever want to sell your business.
- Why It Matters for a Barbershop: No one starts a business thinking about selling it, but you must plan for a successful future. If you build a thriving shop and decide to sell in five years, a restrictive assignment clause could kill the deal. Many standard leases give the landlord the “sole discretion” to approve or deny a transfer, meaning they could block your sale for any reason at all.
- How to Negotiate It: Fight for the word “reasonable.” Your clause should state that the landlord cannot “unreasonably” withhold consent for a lease assignment to a new, qualified tenant. This protects you from an arbitrary landlord and ensures you can one day cash in on the successful business you’ve built.
These four clauses are your shield and your sword in the negotiation process. Get them right, and you will have a lease that serves as a strong foundation for your business. And always remember the final, most important step: before you sign anything, have a qualified attorney review the entire document. It’s an expense that could save you your entire business.