California Franchise Investment Bond

A quick guide to one of the most important requirements for the registration of franchises in California!

What is a California Franchise Investment Bond?

If the Commissioner of Business Oversight of the State of California believes that the person applying for a registration of franchises doesn’t meet the financial requirement, the said person must furnish this bond.

The purpose of this bond is to ensure the compliance of the franchisor to the Franchise Investment Law as well as to the rules and regulation set forth by the Business Oversight of the State of California.

Any violation (fraudulent, prohibited, or unfair practices) that the applicant will make against the aforementioned laws, rules, and regulations will be covered by this bond.

This bond is required by Section 31113 of the Corporations Code and Section 310.113.5 of Title 10, California Administrative Code.

How much is a California Franchise Investment Bond?

The bond premium will range from 1% to 5% of the bond amount. The bond premium will depend on the franchisor’s credit score.

The bond amount will be determined by the Commissioner of Business Oversight of the State of California.

Get your FREE SURETY BOND QUOTE HERE in order to know your bond premium!

How can I get a California Franchise Investment Bond?

Here’s a step-by-step bonding process that we’ve made easier so that you can get your bond immediately:

APPLY FOR THIS BOND

If you are ready to do this now, you may APPLY HERE!
One of our expert surety bond agents will guide you through the entire process – from the time you have applied until the bond is issued to you.

UNDERWRITING

Next, you will be asked to submit a few important information that our underwriter requires in order to assess the following:

  • Your job or business history
  • Your credit score
  • Your financial strength

To avoid any delays, make sure that you have gathered the right information needed prior to submitting your application.

BOND ISSUANCE

After the indemnity agreement is signed, the bond will be issued and sent to you!

How does a California Franchise Investment Bond work?

This bond will serve as an enforceable agreement among three parties, namely:

Principal – franchisor

Obligee – State of California

Surety – surety bond provider

The Principal and the Surety will partner in assuring the performance of the former to the Obligee. The Principal is primarily responsible for the fulfillment of the obligations required by the Obligee. If the Principal fails to do any of the obligations or any provisions stated in the Franchise Investment Law and other relevant laws, rules, and regulations, the Obligee can file a bond claim.

The claim will first be verified by the Surety before it is settled. The Surety will investigate whether a violation has been made and if it’s covered by the bond. If it is, the Surety will pay the Obligee. Once the Surety has settled the claim, the Principal will reimburse the Surety for the payments made.

Need this bond ASAP? APPLY NOW!

California Franchise Investment Bond

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