The Saloon is a building available in Age of Empires III: The WarChiefs, that can be constructed from the Colonial Age and allows the recruitment of various outlaws and mercenaries. The Saloon is the only building where certain mercenary types can be hired. All mercenary units require large amounts of Coin to train.
In the Colonial Age, only outlaw units are available for training. With every Age up until the Industrial Age, one more mercenary unit becomes available. All European nations are able to ship the Dance Hall card in the Discovery Age, which upgrades the Saloon (increasing the health and decreasing population cost of outlaw units), and also enables the hiring of a fifth unit, the Ronin.
While the Mercenary units from the saloon are randomly generated as the map starts, Outlaw type of units only depend of the map you're playing on. Saloon units are same for all players except for Ronin, which is available only once the Dance Hall card is sent from a player's Home City.
The majority of mercenary units are based upon other mainstream military units, but have much higher attack and hitpoints and usually take more population space. For example the Scottish Highlander is an improved musketeer.
Outlaws cost little Coin but take up considerable population space. Mercenaries cost much more Coin but their population space is more on par with regular units.
See also, the monastery, which performs the same function for Asian civilizations.