Illinois franchisor bonds.
Quote on review.
The Illinois Attorney General can require a franchisor with thin finances to give financial assurance under 815 ILCS 705/15, and a surety bond on its Appendix E form is one option. It equals your initial franchise fee times the franchises you are authorized to sell. A surety specialist returns a quote, usually within one business day.
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How much does an Illinois franchisor bond cost?
It is underwritten: the premium is quoted from the bond amount and your financial picture, so there is no flat price to show.
Deficiency letter to filed bond.
The request usually arrives during registration review, and the registration cannot go effective until the assurance is in place. Here is the whole process:
Send us the registration detail
Apply online with the franchise type, the entity details, and the penal sum — your initial franchise fee multiplied by the number of franchises the Attorney General will authorize. Attach the Bureau’s request if you have it.
A surety specialist underwrites it
A specialist reviews the franchisor’s financial statements, the obligations you owe each franchisee before opening, and the size of the bond, then returns a quote. Larger penal sums can call for collateral or a personal indemnity.
Execute on Appendix E & file
Once you bind, we issue the bond on the Attorney General’s Appendix E form, signed by a surety authorized in Illinois, with the power of attorney attached — ready to submit to the Franchise Bureau with your registration.
What it is and who needs it.
Why the Attorney General asks for this bond
Illinois is a franchise registration state. Under 815 ILCS 705/10, no franchisor may offer or sell a franchise to an Illinois-domiciled franchisee, or for a business located in Illinois where the offer is made or accepted here, until it has registered with the Administrator — which the Act defines as the Illinois Attorney General. The Attorney General’s Franchise Bureau reviews each filing.
Part of that review is money. Under 14 Ill. Adm. Code 200.500, if the franchisor’s financial statements do not show adequate resources to perform its pre-opening obligations — or show that it will depend primarily on the initial franchise fees it collects — the Administrator will require the franchisor, at its option, to assure financial capability by one of five means: an escrow of funds, a guaranty of performance, a surety bond, a certificate of deposit, or deferral of the initial fees until the franchisee opens. Registration is then limited to the number of franchises the Administrator authorizes.
The bond is the option that keeps franchise fees flowing to the franchisor. It runs to the Attorney General, who states on the form that it intends to assign the bond to each franchise purchaser, and it guarantees three things: that the franchisor complies with the Act and its rules, pays damages caused by violations or misrepresentation — including failing to disclose its true financial condition — and fully completes its obligations to provide real estate, improvements, equipment, inventory, training and the other items included in the offering.
It is not insurance for the franchisor. If a franchisee recovers on the bond, the surety looks to you for repayment. That is why it is underwritten on the same financial statements that prompted the request, and why a franchisor with limited equity may be asked for collateral or an owner’s indemnity.
You need this bond if you are
Claims, renewal, filing, and what sets the price.
If a claim is made
A claim comes from the party the bond protects, the obligee named on the form, when the duty the bond guarantees is not met.
The surety investigates and pays a valid claim, up to the bond amount. You then repay the surety: a surety bond is a guarantee of your performance, not insurance for you.
Renewal and term
Term and renewal are set in the underwriter's quote.
Keep the bond in force for as long as the obligation behind it runs.
How to file it
Execute on Appendix E & file. Once you bind, we issue the bond on the Attorney General’s Appendix E form, signed by a surety authorized in Illinois, with the power of attorney attached — ready to submit to the Franchise Bureau with your registration.
What sets the price
This bond is underwritten: the premium is quoted from the bond amount and your financial picture, so there is no flat price to show.
One application, one underwriting review.
These are the actual underwriting fields — the franchise type, the entity, the owners, years in business and the penal sum. Submit once and a surety specialist reviews the file and returns a quote, typically within one business day. Free until your bond is issued.
Start the application →Common questions.
Other Illinois bonds.
Requirements checked on the carrier’s application, . Page updated .
Get bonded and clear your registration.
Send us your initial fee and the number of franchises you will offer, and a surety specialist sizes, underwrites and quotes the bond — typically within one business day. Free until issued.