a community of practitioners
I run a personal training/massage therapy studio and have a space to rent out to another massage therapist.
What kind of arrangements do you guys have with independent contractor massage therapists? I want to be as fair to the massage therapist as possible. Thanks!
Let me start by saying that pay for MT's can vary greatly by region. What is fair is often fluid and relative depending on the parties involved. As a business owner, you should make a profit on the situation no matter what it is. You need to determine if you want to break even on the space or make a profit. If the space is costing you $200 a month, you should charge more than that to cover your admin costs of renting the space if nothing more. Part of this equation is asking who or what type of therapist are you trying to attract. If its someone just building their practice they are much more beholden to your business. If its an established MT with a solid client base that could enhance your practice then I would make the fee less so they have an incentive to bring their clients with them. This is a touchy area so talk it out in depth with your prospective tenant before committing.
An 8x10 room rent is as low as $350 to up to $1000! $350-$500 is more the norm in my area. Metro Denver is higher.
One place I know of rents their room for a flat $50 a day. It is a high visibility hair salon with a very strong client base. Often it is split between several therapists on different days of the week.
If you want to avoid any 1099 bookkeeping just rent the room outright, and the MT supplies everything themselves and collects their own fees. If you do refer them to your clients you should get a pre-arranged fee from the MT for each confirmed booking. 15% to 45% is common in my area. If you provide a lot of referral business to the MT the higher percentages should be used. One chiro I know waves the fee and anyone they refer from his practice get a comparable discount from the MT. Lots of MT's don't want to deal with insurance.
If intend you support the MT by taking bookings for them rather than straight referrals you should come to an agreement with the therapist for a cut of the fees. Depending on the reliance of the MT on your providing bookings this can vary widely. What I mean for example is if you take care of all the bookings/payment 60/40 is very common. I also know folks in 50/50 splits and is pretty fair IMO.
If the independent MT does Groupon a lot, you will receive hardly anything in a split. So have this conversation early. From both sides, there could be anger and hurt feelings. One, the MT will be pissed if you insist on the split for that Groupon Massage be full price. Two, you will be pissed that you only received $7 for each of 10 massages that week. Also, spell out any third party discounting arrangements in the agreement.
Remember as a contractor they must supply their own tools. If your providing anything be very careful as this could be defined by the IRS as an employee situation. If there is already equipment in the room spell this out in the agreement that this is part of the rental/use agreement.