Two fundamentally different models
Booth/chair rental: the service provider pays you a flat, recurring fee for the space and keeps their own service revenue entirely. You have less control over their pricing, hours, and client experience, but simpler, more predictable revenue as the business owner.
Commission: you set pricing and standards, and the service provider earns a percentage of the revenue they generate. You have more control and typically deeper involvement in the client experience, but your revenue varies with their production.
Which model fits which business goals
Booth rental tends to fit owners who want simpler, more passive management and are comfortable with less control over the day-to-day client experience. Commission fits owners who want more brand consistency and control, and are willing to take on more active management in exchange.
Some businesses run a hybrid model — commission staff for core services, with booth rental for specialists (a lash artist, a massage therapist) whose services complement but don't compete directly with the core business.
Legal and tax classification matters
Booth renters are generally independent contractors, not employees, with different tax and legal implications than commission-based staff, who are more commonly classified as employees. See our Employee vs. Independent Contractor overview — this distinction has real compliance implications, not just a business-preference question.
Don't structure a relationship as "booth rental" in name only while actually controlling that person's schedule, pricing, and client interactions the way you would an employee. Misclassification carries real legal and tax risk — the actual working relationship matters more than the label you give it.
Frequently asked questions
Can I switch from one model to the other later? Yes, though transitioning existing staff/renters requires clear communication and reasonable notice — this isn't a change to make abruptly.
Which model is more profitable? It depends heavily on your specific business, market, and how effectively you manage either model — neither is inherently more profitable in every situation.