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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!

-Jeff 

Commencefitness.com

Commencemassage.com

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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.

1099 situations:
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.

This is a sample contractual services agreement below between a massage therapist and a business. You should consult an attorney to tailor a contract to your individual circumstances/agreement and the laws of your state.
Whatever arrangement you settle on it should be clearly spelled out in the agreement.
Hope this helps and just haven't confused the conversation even more. Others may have a less complicated view of the matter.
Blessings.
****
This agreement dated __________________, between ________________________ (therapist) with principal address of ______________________________________ and ______________________________________ (business) with principal address of ________________________________, sets forth that therapist is an independent contractor utilizing the facilities of business for the purpose of providing ______________________ (therapeutic services).
Terms
[This could also be written for a flat rental fee, flat commision etc.]
Business will collect ________ percent of fees collected by the therapist for services rendered to cover space rent, provision of utilities, equipment use, staff (scheduling), and other overhead.
The therapist will set fees for services rendered.
This agreement is in effect from ___________________________to __________________________. Either party may immediately terminate the agreement, given reasonable cause, as outlined below:
• A breach of ethical standards;
• Violations of the terms of this agreement; or
• Presentation by either party to liability because the other party has failed to live up to the requirements of this agreement. In addition, either party shall have the right to cancel the agreement by providing written notice to the other
party at least thirty days prior to proposed termination date.
Therapist Will:
1. Control own hours of service within business hours of operation but will conform to business policies, such as
dress code.
2. Be responsible for all supplies, tools, clean linens needed for services.
3. Be entitled to keep all the tips.
4. Provide proof of professional liability insurance in amounts of at least $2 million per incident and $6 million aggregate
and compliance with all business licensing and regulatory requirements.
5. Provide business’ payments for the share of fees for services rendered by the therapist during the prior month on the first
business day of each month.
6. Be responsible for all local, state, and federal withholding taxes.
7. Maintain the confidentiality of all client information.
8. Hold business harmless from any liability or economic loss arising from services provided under this agreement.
Business Will:
1. Provide use of the facility (including a safe, private treatment area), its utilities and its services, including therapy
space, storage area, bathrooms, general cleaning service, and receptionist, scheduling, appointment confirmation,
and insurance billing services, if applicable.
2. Incorporate therapist services within overall business marketing plans and promote those services.
The parties agree that any unresolved disputes about the terms or enforcement of this agreement shall be resolved
through arbitration. The non-prevailing party shall be responsible for paying all arbitration costs unless the arbitrator finds
partially for both parties, in which all the parties shall each be responsible for half the costs of arbitration.
This constitutes the entire agreement between the parties and replaces any and all prior verbal or written agreements.
Should any part of this agreement be considered unenforceable by a court of competent jurisdiction, the remainder of the
agreement remains in force. This agreement is governed by the laws of ___________________ (state).
Therapist signature _____________________________________________
Date ____________________
Business signature_____________________________________________
Date ____________________
Witness signature _____________________________________________
Date ____________________

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