(1) The department shall issue a license to a person to operate a school of cosmetology, at the premises specified in the license application, if all of the following requirements are met:

  (a) An application is submitted to the department by the owner or manager of the school.

  (b) The application includes the address of the premises of the school and, except as provided in subsection (7), a drawing or diagram of the premises that shows that the premises are fully partitioned from any other activity, business, or dwelling. The drawing or diagram must also indicate the location of required equipment and facilities.

  (c) The applicant has filed a cash or surety bond of $10,000.00 with the department, in favor of the people of this state for the use and benefit of students, and conditioned on the faithful performance and satisfaction of the contractual rights of students.

  (d) Provisions have been made for the daily supervision of the school by a licensed cosmetology instructor who has at least 3 years’ experience in all services of cosmetology that are taught in the school.

  (e) The school and its premises have successfully passed an inspection by the department conducted for the purpose of determining whether the school and premises meet the standards set forth in this article and rules promulgated by the director.

  (2) A school of cosmetology shall meet all of the following requirements:

  (a) Subject to subsection (6), maintain a course of practical training and technical instruction, as outlined in the various curricula set forth in rules promulgated by the director, equal to the requirements for prelicensure training under this article. A school of cosmetology shall teach hair care services, skin care services, and manicuring services and may hold a limited license for the teaching of electrology. If the owner of a school of cosmetology holds a license that limits the school to only the teaching of electrology, the school shall teach only electrology and not any other cosmetology service.

  (b) Possess efficient apparatus and equipment prescribed in rules promulgated by the director that are sufficient for the ready and full teaching of each subject in the curriculum.

  (c) Employ or engage at least 1 licensed instructor, who is competent to provide instruction in each subject of its curriculum, for every 20 students.

  (d) Operate for teaching purposes only.

  (e) Allow instructors to practice on the public only to demonstrate techniques to students and to correct the work of students.

  (f) If a specialist demonstrator gives a classroom demonstration, ensure that a licensed instructor supervises the demonstration.

  (g) The premises of the school are completely separated by full partitions and doors from any other activity, business, or dwelling.

  (h) Display its license for the school of cosmetology and the license of each instructor who works in the school in a prominent place in the school that is visible to the public at all times.

  (i) Display a sign in the school that states that services are performed by students of the school.

  (j) At the time he or she enrolls in the school, provide to each student a financial contract that states the total cost and all charges involved in the complete course of study.

  (k) In any advertising materials distributed or published by the school that refer to the cost of tuition or related subjects, include the same financial information described in subdivision (j).

  (3) The owner of a school of cosmetology shall ensure that the school meets the requirements of subsection (2).

  (4) The department may issue a limited school of cosmetology license to the owner of a school that teaches only electrology. A school of cosmetology that is authorized to teach only electrology shall meet all of the requirements of this section, except that only an instructor who is authorized to perform electrology may provide the daily supervision of the school that is required under subsection (1)(d), and the curriculum offered and equipment and facilities required shall be only those required for the teaching of electrology.

  (5) An owner’s school of cosmetology license is considered void if there is a sale or other transfer of the school, a sale or other transfer of ownership, or a change in the location of the school. A person whose license is void under this subsection must submit a new license application and obtain a new license to continue to operate a school of cosmetology.

  (6) For the purposes of subsection (2)(a) and section 1207(d), if a student of a school of cosmetology is licensed as a barber under article 11, the school of cosmetology may allow the student to substitute hours of instruction completed at a state barber college for hours of instruction that are substantially similar in content to hours of instruction at the school of cosmetology. However, a school of cosmetology shall not allow a student to substitute more than 1,000 hours of substantially similar instruction from a state barber college for hours of instruction at the school of cosmetology under this subsection. The department by rule shall establish criteria for determining whether an hour of instruction at a state barber college is substantially similar to an hour of instruction at a school of cosmetology. As used in this subsection and subsection (7), “state barber college” means a barber college that is licensed under article 11.

  (7) A school of cosmetology and a state barber college may occupy the same building and share facilities.