[Untangling Issues] ④ Why Can't Hair Salons Merge?

Inspecting the hygiene level of a hair salon.
[Photo by Asia Economy DB]

[Asia Economy Reporter Kim Jong-hwa] # Mr. A, who had been running a hair salon for 10 years, agreed earlier this year to merge his salon with his close friend Mr. B’s salon of similar size nearby after their income decreased due to the economic downturn in Gyeonggi Province. However, while proceeding with the procedures to merge their businesses, Mr. A and Mr. B discovered that they could not combine their two hair salons into one joint operation. They knew an acquaintance who runs a nail shop inside a hair salon, and while it is permissible to operate a different business such as a nail shop within a hair salon, they were dismayed to learn that merging two hair salons, which are the same type of business, is illegal.

According to the current Enforcement Rules of the Public Hygiene Control Act, public hygiene businesses such as beauty services (general, nails, toenails, makeup, and theatrical makeup) are being improved to allow multiple beauty operators to operate together in the same space separated by lines and cords, and from next year, joint use of sterilization equipment will also be permitted.

However, for grooming businesses (generally hair salons and barbershops), unless the same business space is partitioned by dividers or curtains, different grooming or beauty operators cannot operate together, and sterilization equipment cannot be shared.

In other words, while it is allowed for different types of businesses such as hair salons and nail shops to share the same business space without separate partitions, if two hair salons want to merge and operate together, they must separate the business space with partitions or curtains and use the spaces separately, and even if they operate in the same area, sterilization equipment must be used individually.

During prosperous times, this was not an issue, but as the economy worsened and it became difficult to manage, people began to attempt to merge and jointly operate small businesses like hair salons, revealing this loophole in the law.

Mr. A expressed frustration, saying, "It makes no sense to allow different types of businesses to share a business space but not allow the same type of business to do so. Some say we can just cancel our business registrations and work together as employees, but anyone who says that clearly has never run a store. There is also a fairness issue with the law."

As of the end of last year, there are 17,135 registered and operating grooming businesses nationwide. Allowing two or more hair salons to jointly use one business space regardless of business type would reduce fixed costs such as monthly rent and facility usage fees.

Additionally, it would reduce costs such as separate sterilizer expenses (around 100,000 KRW) per business and startup costs averaging between 50 million to 120 million KRW. Reducing these various costs is expected to significantly lower the closure rate of self-employed beauty business owners.

A representative from the Small and Medium Business Ombudsman stated, "As long as each beauty operator complies with facility and equipment standards and fulfills their business obligations, there should be no problem with jointly using business spaces. Following the regulatory reform measures announced in April, beauty businesses are allowed to share operations separated by lines and cords until the first half of this year, and we are currently pushing for related legal amendments to allow joint use of equipment by the first half of next year."