What am I buying when I buy a salon suite business?

In a salon suite building, each stylist, esthetician or other professional rents a private suite and runs their own business inside it. The owner collects rent and supplies shared space and services. The clients belong to the tenants, not to you. What you buy is the rental income, the agreements behind it and the building arrangements that make it possible.

Suite agreements and occupancy

Ask for every suite agreement, with start dates, terms, notice periods and any rent discounts. Then ask for occupancy history: which suites were full, for how long, and how fast empty ones were refilled. Note how long tenants stay and why those who left did so, and discuss the pattern with your advisers.

The head lease

If the owner leases the building, the head lease limits everything. Read the remaining term, renewal rights, permitted uses and whether subletting the suites and assigning the lease need the landlord’s consent. Ask your lawyer to review it before you rely on the rent roll.

Shared services and costs

Find out what the owner provides: reception, laundry, utilities, cleaning, marketing, insurance or a shared retail area. Ask what each costs and what happens to tenants if a service stops. Check that the books show those costs separately from rent.

If it is a franchise

Some suite operations are franchises. Ask for the franchise agreement, the fees and the franchisor’s transfer terms, and ask whether the franchisor must approve you. Whether disclosure rules apply is a legal question for your lawyer. See also whether a licence can move to a numbered company.